Planning System After Independence In India
After India’s independence as a result of long-term colonial rule, an economy was inherited which had negative characteristics such as limited industrialization, low agricultural production, low per capita income and slow economic growth. Illiteracy, parochialism and social inequality were its other major elements.
After achieving independence, four goals of development were announced by the political leadership keeping in mind the circumstances and aspirations.
Reducing India’s dependence on imports and foreign aid
Capital formation and dissemination of resources
Eradicate social and regional disparities, and
Achieve adequate and minimum standard of living for the common people.
To achieve the above goals, the political leadership had options to adopt two ideologies – capitalist and communist based governance systems, but the inequality in the capitalist system and the autocracy of the communist regime prompted the Indian leadership to choose a third path. Under the influence of Jawaharlal Nehru, it was decided to adopt a new experiment of implementing economic planning in a democratic system, in which the objectives of development and equity were to be achieved in a peaceful manner.
Initial planning effort
The Congress formed the National Planning Committee in 1938, headed by Jawaharlal Nehru. Several reports prepared by the committee recommended public ownership of basic industries, coordination between large and small scale industries, elimination of the zamindari system by giving compensation, necessary inclusion of agriculture sector in planning and expansion of cooperative farming etc.
In 1944, eight big industrialists of India prepared a document of economic development called the Bombay Plan.
Acharya Shri Mannarayan claimed to provide basic amenities of life to the people in ten years through the ‘Gandhian Scheme’. MN Rai also proposed the ‘Janata Yojana’, which emphasized on government farming and nationalization of land. Jayaprakash Narayan’s ‘Sarvodaya Yojana‘ was also based on the Gandhian model of development.
Thus, through these various schemes of development, several forms of planning emerged in India, which provided the political leadership with abundant material for planning policy after independence.
The Planning Commission was established in 1950 by a resolution of the Union Cabinet. The commission was given the status of a consultative institution. The commission had to fulfill seven responsibilities –
- Assessing India’s physical, capital and human resources;
- Formulate plans for effective and balanced use of these resources;
- Determining national priorities of development, defining development conditions and making suggestions for distribution of resources;
- Determining the necessary conditions for successful implementation of the scheme;
- Ensuring the requisite governance for the implementation of each stage of the plan;
- Periodically evaluate the progress achieved by the plan implementation and recommend expected reforms in policies and parameters;
- To make recommendations regarding topics such as effective functioning of yourself, changing economic conditions, current problems etc.
- The final decision on the recommendations of the Planning Commission and the policies and plans prepared are taken by the National Development Council, which is chaired by the Prime Minister and the Chief Minister of all states is its member.
- Socio-economic objectives of planning Planning, Socio-Economic Objective
- Planning has various socioeconomic objectives, which have been described in various five-year plan formats. The objectives of planning based on a rough estimate are:
- Construction of basic industrial infrastructure;
- Increase and improvement in agricultural production;
- Growth and distribution of national wealth;
- Establishment of a self-reliant and spontaneous national economy;
- Eradication of poverty and unemployment
- Promotion of social justice;
- Cessation of diseases and illiteracy;
- Expansion of trade and commerce;
- Economic incentives to entrepreneurs for import substitution and export oriented production;
- Metamorphosis of Indian economy into modern, effective and competitive form.
The First Three, Five-Year Plans
First Five Year Plan (1951-56): In the first plan, along with all-round national development, immediate targets like refugee resettlement, food self-sufficiency, inflation control were selected. This scheme succeeded in achieving the goals.
Second Five Year Plan (1956-61): In this plan, the development and expansion of heavy and basic industries was given priority, which was an important step towards establishing a socialist economy.
Many of the goals of the second plan could not be achieved due to lack of capital, yet it achieved limited success.
Third Five-Year Plan (1961-66): In the Third Plan, giving priority to agriculture again, the goal of an autonomous and dependent economy was set. But due to Indo-China War (1962) and Indo-Pakistan War (1965), the priorities of the plan had to be limited to defense needs. The severe famine in 1965-66 completely thwarted the plan. Hence, during the Third Plan, the Indian planning system faced severe crises and disruptions.
In this way, the positive and negative aspects of the planning system became fully clear only during the tenure of Jawaharlal Nehru. While on one hand the planning system succeeded in the areas of production growth, industrialization expansion, infrastructure development, science and technological development, and the spread of education, on the other hand, poverty and unemployment eradication, reduction of income inequalities, full implementation of land reforms etc. It proved to be unsuccessful.
State controlled industrialization
At the time of independence, the industrialization zone of India had characteristics such as lack of infrastructure, low status of technological development, dependence on foreign capital, absence of domestic market, lack of capital industries and lack of capital formation. In this perspective, infrastructure, domestic demand and availability of specially qualified resources were accepted by the national leadership and entrepreneurs as essential conditions for the development and expansion of industrialization and it was considered impossible to fulfill these conditions without state support.
The proposals presented by the ‘National Planning Committee’ of 1938 and the Bombay Plan of 1944 acknowledged the need for a planning system and state control to speed up the process of industrialization.
To achieve the objectives of democratic socialism through industrialization, it was also necessary to maintain government ownership over industries. Due to the view of the private sector to make more profit, it could not be expected to have social welfare priorities. It was considered appropriate to curb money. The form of state control over industrialization can be seen in the early industrial policies of the government.
Industrial Policy of 1948
In this policy, under the mixed economy, the state announced the establishment of new productive units under its control in the coming years. The private and public sector had to work jointly. The private sector was to conduct its activities under the general industrial policy of the country. The public sector under the state was envisaged in areas such as energy, arms, railways, money generation etc. It was decided to establish basic industries in aircraft and shipbuilding, iron, coal, mineral oil and communication sectors. The public sector was recognized as an instrument of social change. In this policy, it was proposed to encourage small and cottage industries by the state. Production of specific items was reserved for these industries. Removing regional imbalances by establishing industries in backward areas was also considered as the responsibility of the state. Thus the Industrial Policy of 1948 attempted to implement the Directive Principles of Policy of the Constitution.
Industrial Policy of 1956
In the proposal of this policy, industries were divided into three classes –
The first category includes 17 industries such as arms production, nuclear power, heavy equipment, iron steel, coal, mineral oil, metallurgical industries, heavy power equipment, other important mineral air transport, railways, aeronautical telephones, power generation and distribution and tar and radio equipment. Was kept They were in full control of the state.
The second category included 12 industries such as other non-ferrous metals and aluminum, other mineral industries, iron alloys and steel, antibiotics and other pharmaceuticals, chemical industries, fertilizers, synthetic rubber, road transport and sea transportation, carbonization of coal and chemical waste. . State control was to increase in these industries and the state would establish new enterprises in them. The private sector was expected to assist the state in running these industries.
All the remaining industries were handed over to the private sector. But all the industries of this class also had to work under social objectives and governing laws.
It was clarified in this industrial policy that the private sector and the public sector are not mutually separate or antagonistic but mutually complementary. To address the apprehension of the private sector, adequate support was given by the state to support the development of the private sector through capital support, fiscal measures and communication and energy facilities. The policy ensured fair and non-discriminatory treatment towards both state, government and private entities. It also recommended the promotion of small and cottage industries, the elimination of territorial inequality and the expansion of labor facilities, which were impossible to fulfill without state control.
Industrialization under first three five year plans
Industrialization under the First Five Year Plan,
In the first plan, instead of direct industrialization efforts, emphasis was laid on basic infrastructure and development of agriculture and irrigation so that a smooth backdrop could be created for rapid industrialization to be done in future. The growth rate of various industries was satisfactory during the first plan period. During this period, Sindri Fertilizer Factory, Chittaranjan’s Rail Engine Manufacturing Factory, Integral Coach Factory, Penicillin Factory, Indian Telephone Industry etc. were established.
Industrialization under the Second Five-Year Plan, 1956-61
The goal of industrialization set in this plan period was inspired by the Industrial Policy of 1956. 27% of the total appropriation of the scheme was earmarked for the industry sector. Apart from steel factories at Rourkela, Bhilai and Durgapur, several manufacturing units were set up by the state in various industry sectors. This period saw the rapid expansion of the small entrepreneurial group, partially reducing the tendencies of capital monopoly.
Industrialization under the Third Five-Year Plan, 1961–66
In this plan, along with the expansion of industrial area, emphasis was laid on improving machine manufacturing production, technical skills and managerial efficiency. The public sector was given a central position during the Plan period. During the plan period, considerable progress was made in the fields of automobiles, diesel engines, power transformers, machine tools, etc.
1951 The Industries (Development and Regulation) Act, 1951
Through this act, the government was empowered to issue licenses for setting up medium and large industrial undertakings. The government also got the power to determine the quantity of production, import-export quota, wages, prices and salaries. These rights of the government were justified in terms of decentralization of industries and protection of consumers and workers. The government also attempted to control the activities of foreign trading houses and multinational corporations through various laws.
Thus, in the decade and a half after independence, according to the ideals of democratic socialism, the process of industrialization started in a mixed economy, in which the control of the state was considered an essential element. In the then new economy, it was impossible to develop the basic sectors only with the help of private and marketist economic powers, and the private sector itself could not be so capable or able to mobilize the resources required for social and economic restructuring. Investment of resources in agriculture, energy, transport and communication sector could be ensured only through state control. Without the development of these basic facilities, it would not have been possible to build a domestic market and social change. For all these reasons, the state was entrusted with the control of the industrialization process and in spite of some failures, the state efficiently played its role.
Agrarian Reforms, 1947–64
After independence, the biggest challenge before the political leadership was to rebuild and develop the social and economic of the country. Agriculture, with over 80 percent of India’s population dependent on agriculture, was found to be closely related to economic development. After independence, India inherited a backward agricultural system, the main characteristics of which were – various types of land ownership, centralization of land in a few hands, effectiveness of middlemen, existence of majority poor farmers, rural unemployment, low Agriculture, production, lack of technical facilities, social backwardness and discrimination, low rural living standards and illiteracy, conservatism, bigotry and casteism in rural areas etc.
Improving rural life and agriculture after independence topped the priority list of leadership. At the time, there were three ideologies related to agricultural reform –
Nationalization of land was considered mandatory by the Indian communist party.
Under Vinoba Bhave’s Bhoodan movement, a call was made to decide on the moral pressure of land reforms.
In 1949, the report of Congress Agricultural Reforms Committee emphasized land reform and cooperative farming under the federal democratic structure. The first two ideologies were rejected for lack of legal support and it was decided to initiate the process of agricultural reforms based on the policies of the Congress.
In the Awri session of 1955, the following objectives of reforms in agriculture were determined by the Congress under the socialist framework.
Eradication of effective semi-feudal social relations and economic institutions in rural India;
Distribution of land to real farmers;
Increase in capacity of progressive farmers through government community development schemes:
Increase in food production;
Ensuring the security of the tenancy period;
These objectives were to be achieved under parliamentary democracy and without damage to the right to property. The proposals of the Congress were soon approved by the Indian Parliament.
First stage 1948-52
In this phase, the government laid more emphasis on the abolition of the zamindari system so that middlemen could be eliminated and direct contact with the farmers could be made. The statutory definition of tenancy included small farmers as well as big landowners. According to the Agricultural Labor Inquiry Report (1951) “20 percent of the total agricultural households were landless. The percentage of farmers who got less than 2.5 acres of land was 38 and only 6 percent of the total cultivable land was their right. 59 percent of the farming families had more than 5 acres of land which was 16 percent of the total cultivable land. ”
At the time of independence, 57 percent of agricultural land owned by individual landlords was dominated by zamindars. The following difficulties were present when the government took steps to end the zamindari system-
Agriculture was the subject of the state list. Therefore, it was very difficult to implement any reform in this direction simultaneously all over India. There was variation in the geo-reform policies of different states.
Bringing agricultural and marginal farmers into direct contact with the state was a formidable problem.
Compensation in lieu of acquired land was also a problem. Zamindars used to declare the compensation question unconstitutional from the court on the basis of violation of fundamental rights. Land reforms could be implemented only by amending Article 31. Even after the abolition of the zamindari system, the zamindars were given the status of ‘land farmers’ and they were also given the facility to reclaim the land for private farming.
The tenants were given permanent right to plow the land but they could not sell the land. Only tenants who paid ten times the rent of a year could sell the land. Thus most of the peasants turned into Bhoomidhars and Sirdars, who paid the government directly. But the landlords still had a lot of land left in the form of suicides and did not allow their effective social and economic status to be completely eradicated by employing compensation received from the government in gainful occupations.
Second phase 1951-64
Several legal steps were taken in this phase under agricultural reforms. Several laws were enacted to protect tenancy period, fixation of rent rate, and to give tenants the opportunity to become owners by purchasing land. Many laws were also made in relation to the extent of agricultural land and distribution of agricultural land to the landless. A family victory was determined by the Planning Commission in the early years of the sixth decade, with an annual income of Rs. 1200. Be equal to. In the suggestion made by the Planning Commission, it was considered necessary to own 3 family holdings with a 5-member family. In the forms of the first three five-year plans, the following proposals were also available regarding improving the condition of tenants –
Land rent should not exceed 1/2 to 1/4 level of total production;
Ownership of land which is not likely to be reclaimed, should be handed over to the tenant;
Remote zamindari should be discouraged;
Individual agriculture should be encouraged.
The end of inequality and the need in rural areas were accepted in these five-year plans. The Land Ceiling Act came into force only in the 1950s but was implemented at different times in different states. The purpose of land demarcation was only partially successful as the landlords gave their surplus land to their relatives, friends and others. This benami transfer made land ceiling laws ineffective to a extent.
Under agricultural reforms, emphasis was also placed on increasing the productivity of land through heavy investment. In the first five-year plan, land consolidation was introduced systematically with the aim of preventing subdivision of land. By the end of 1957, 150 lakh acres of land had been consolidated. Along with land reforms, the Gram Panchayat system was implemented under the Directive Elements of the Constitution (Article 40), which was based on adult and mass suffrage. A social and psychological change began in rural life through the control of land resources at the village level by rural panchayats.
The government also made several efforts to increase agricultural production under agricultural reforms. In 1960, the Intensive Agriculture District Program was implemented in selected districts of some states. Its objective was to provide fertilizers, pesticides, good seeds and technical support to the farmers. Along with these facilities, proper arrangement of irrigation was also emphasized.
But most of these facilities were availed by rich farmers. Although the government succeeded in achieving an increase in production, the structural changes in the agricultural sector and efforts to bring socio-economic equality faced many hurdles.
In conclusion, during the period 1947-64, unprecedented efforts were made to implement agricultural reforms but they were insufficient to bring about a complete structural change in the agricultural sector, which was originally rooted in the then socio-economic structure.