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NCERT Class 12 Political Science Chapter 3 of Politics Planned

Development YouTube Lecture Handouts
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NCERT Class 12 Political Science Chapter 3: Politics of Planned Development

As the global demand for steel increases, Orissa, which has one of the largest reserves of untapped
iron ore in the country, is being seen as an important investment destination. The State government
hopes to cash in on this unprecedented demand for iron ore and has signed Memorandum of
Understanding (MoU) with both international and domestic steel makers. The government believes
that this would bring in necessary capital investment and provide a lot of employment
opportunities.

The tribal population fears that the setting up of industries would mean displacement from their
home and livelihood. The environmentalists fear that mining and industry would pollute the
environment. The central government feels that if the industry is not allowed it would set a bad
example and discourage investments in the country.

Planning Commission
That the citizens, men and women equally, have the right to an adequate means of livelihood;

That the ownership and control of the material resources of the community are so distributed as
best to subserve the common good; and

That the operation of the economic system does not result in the concentration of wealth and means
of production to the common detriment

Political Contestation
Weighing the interests of one social group against another, present generation against future
generations

In a democracy such major decisions should be taken or at least approved by the people
themselves. It is important to take advice from experts on mining, from environmentalists and from
economists.

Yet the final decision must be a political decision, taken by people՚s representatives who are in touch
with the feelings of the people

All decisions are taken together in light of economic development.

matter cannot be left to businessmen, industrialists and farmers themselves, that the government
should play a key role in this.

Most of these issues involved political judgement and required consultations among political parties
and approval of the public.

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Left often refers to those who are in favour of the poor, downtrodden sections and support
government policies for the benefit of these sections. The Right refers to those who believe that free
competition and market economy alone ensure progress and that the government should not
unnecessarily intervene in the economy

Ideas of Development
Development could not be left to private actors, that there was the need for the government to
develop a design or plan for development

Planning Commission

Development would mean different things for example, to an industrialist who is planning to set up
a steel plant, to an urban consumer of steel and to the Adivasi who lives in that region

It was believed that every country would go through the process of modernization as in the West,
which involved the breakdown of traditional social structures and the rise of capitalism and
liberalism. Modernization was also associated with the ideas of growth, material progress and
scientific rationality.

The liberal-capitalist model as in much of Europe and the US and the socialist model as in the USSR

Task of poverty alleviation and social and economic redistribution was being seen primarily as the
responsibility of the government

For others, the development of agriculture and in. particular alleviation of rural poverty was the
priority

Idea of planning as a process of rebuilding economy earned a good deal of public support in the
1940s and 1950s all over the world.

Great Depression, Reconstruction of Japan and Germany, and most of all the spectacular economic
growth against heavy odds in the Soviet Union in the 1930s and 1940s contributed to this
consensus

Bombay Plan - section of the big industrialists got together in 1944 and drafted a joint proposal for
setting up a planned economy in the country. Bombay Plan wanted the state to take major initiatives
in industrial and other economic investments. Thus, from left to right, planning for development was
the most obvious choice for the country after Independence. Soon after India became independent,
the Planning Commission came into being. The Prime Minister was its chairperson. It became the
most influential and central machinery for deciding what path and strategy India would adopt for its
development.

Early Initiatives
Five Year Plan - 1st in 1951;

2nd in 1956 &

3rd plan in 1961;

4th plan in 1966

Government of India prepares a document that has a plan for all its income and expenditure for the
next five years.

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budget of the central and all the State governments is divided into two parts: ‘non-plan’ budget that
is spent on routine items on a yearly basis and ‘plan’ budget that is spent on a five-year basis as per
the priorities fixed by the plan.

A five-year plan has the advantage of permitting the government to focus on the larger picture and
make long-term intervention in the economy.

After 4th 5 Year Plan -By this time, the novelty of planning had declined considerably, and moreover,
India was facing acute economic crisis. The government decided to take a plan holiday

1st Five Year Plan

Bring country out of poverty

Drafted by KN Raj – hasten it slowly for 1st 2 decades

Addressed agrarian sector including investment in dams and irrigation

Agricultural sector was hit hardest by Partition and needed urgent attention. Huge allocations were
made for large-scale projects like the Bhakhra Nangal Dam. The Plan identified the pattern of land
distribution in the country as the principal obstacle in the way of agricultural growth. It focused on
land reforms as the key to the country՚s development.

Raise level of national income – possible only if people save more than they spent

As the basic level of spending was very low in the 1950s, it could not be reduced any more. So, the
planners sought to push savings up.

Nevertheless, people՚s savings did rise in the first phase of the planned process until the end of the
Third Five Year Plan. But the rise was not as spectacular as was expected at the beginning of the
First Plan. Later, from the early 1960s till the early 1970s, the proportion of savings in the country
actually dropped consistently

2nd Five Year Plan

Rapid industrialization under P. C. Mahalanobis

Structural transformation

Socialist pattern of society

P. C. Mahalanobis (1893 - 1972) : Scientist and statistician of international repute; founder of Indian
Statistical Institute (1931) ; architect of the Second Plan; supporter of rapid industrialization and
active role of the public sector.

The government imposed substantial tariffs on imports in order to protect domestic industries. Such
protected environment helped both public and private sector industries to grow. As savings and
investment were growing in this period, a bulk of these industries like electricity, railways, steel,
machineries and communication could be developed in the public sector.

India was technologically backward, so it had to spend precious foreign exchange to buy technology
from the global market. That apart, as industry attracted more investment than agriculture, the
possibility of food shortage loomed large. The Indian planners found balancing industry and
agriculture really difficult. The Third Plan was not significantly different from the Second. Critics
pointed out that the plan strategies from this time around displayed an unmistakable “urban bias” .
There were also those who wanted focus on agriculture-related industries rather than heavy ones.
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Kerala Model: focus in this model on education, health, land reform, effective food distribution, and
poverty alleviation. Despite low per capita incomes, and a relatively weak industrial base, Kerala
achieved nearly total literacy, long life expectancy, low infant and female mortality, low birth rates
and high access to medical care. Between 1987 and 1991, the government launched the New
Democratic Initiative which involved campaigns

for development (including total literacy especially in science and environment) designed to involve
people directly in development activities through voluntary citizens՚ organisations. The State has
also taken initiative to involve people in making plans at the Panchayat, block and district level

Controversies
Agriculture or Industry

Public vs Private sector – Mixed

Many thought that the Second Plan lacked an agrarian strategy for development, and the emphasis
on industry caused agriculture and rural India to suffer. Gandhian economists like J. C. Kumarappa
proposed an alternative blueprint that put greater emphasis on rural industrialization.

Chaudhary Charan Singh, a Congress leader who later broke from the party to form Bharatiya Lok
Dal, forcefully articulated the case for keeping agriculture at the centre of planning for India. He said
that the planning was leading to creation of prosperity in urban and industrial section at the
expense of the farmers and rural population.

Others thought that without a drastic increase in industrial production, there could be no escape
from the cycle of poverty. They argued that Indian planning did have an agrarian strategy to boost
the production of foodgrains. The state made laws for land reforms and distribution of resources
among the poor in the villages. It also proposed programmes of community development and spent
large sums on irrigation projects.

The failure was not that of policy but its non-implementation, because the landowning classes had
lot of social and political power.

Indian did not accept the capitalist model of development in which development was left entirely to
the private sector, nor did it follow the socialist model in which private property was abolished and
all the production was controlled by the state.

Planners refused to provide the private sector with enough space and the stimulus to grow.

Enlarged public sector created enough hurdles for private capital in licenses and investment permits

The state intervened only in those areas where the private sector was not prepared to go. Thus, the
state helped the private sector to make profit. Also, instead of helping the poor, the state
intervention ended up creating new ‘middle class’ that enjoyed the privileges of high salaries
without much accountability.

Outcomes
Land reforms did not take place effectively in most parts of the country

Political power remained in the hands of the landowning classes

Big industrialists continued to benefit and thrive while poverty did not reduce much

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Those who benefited from unequal development soon became politically powerful and made it even
more difficult to move in the desired direction

Major projects: Bhakhra-Nangal and Hirakud for irrigation and power generation. Steel, oil,
manufacturing, defence became important for this period. Infrastructure for transport and
communication was improved substantially. Of late, some of these mega projects have come in for a lot
of criticism. Yet much of the later economic growth, including that by the private sector, may not have
been possible in the absence of these foundations.

Land Reforms
Abolition of the colonial system of zamindari - not only released land from the clutches of a class that
had little interest in agriculture, it also reduced the capacity of the landlords to dominate politics.

Consolidation of Land Was Successful

laws were made to put an upper limit or ‘ceiling’ to how much agricultural land one person could
own, people with excess land managed to evade the law. Similarly, the tenants who worked on
someone else՚s land were given greater legal security against eviction, but this provision was rarely
implemented.

It was not easy to turn these well-meaning policies on agriculture into genuine and effective action.
This could happen only if the rural, landless poor were mobilised. But the landowners were very
powerful and wielded considerable political influence. Many proposals were not translated into law
or were only on papers.

Food Crisis
The agricultural situation went from bad to worse in the 1960s. Already, the rate of growth of food
grain production in the 1940s and 1950s was barely staying above rate of population growth.
Between 1965 and 1967, severe droughts occurred in many parts of the country.

It was in Bihar that the food-crisis was most acutely felt as the state faced a near-famine situation.
The food shortage was significant in all districts of Bihar, with 9 districts producing less than half of
their normal output. Five of these districts, in fact, produced less than one-third of what they
produced normally. Food deprivation subsequently led to acute and widespread malnutrition. It was
estimated that the calorie intake dropped from 2200 per capita per day to as low as 1200 in many
regions of the state.

For wheat and rice the prices in the state were twice or more than their prices in more prosperous
Punjab. The government had “zoning” policies that prohibited trade of food across states; this
reduced the availability of food in Bihar dramatically. In situations such as this, the poorest sections
of the society suffered the most. The food crisis had many consequences. The government had to
import wheat and had to accept foreign aid, mainly from the US. Now the first priority of the
planners was to somehow attain self-sufficiency in food.

✍ Mayank

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