CHAPTER

12 Politics of Planned Development

Introduction:
‘Development’ refers to the process of achieving the standard of living and the economic standard of industrial production.
Immediately after independence, the Government of India undertook the task of poverty alleviation, social and economic
redistribution and agricultural development. Due to the growing demand for iron internationally, Orissa's Reserve Iron-
Resource is an important investment destination to sign the Memorandum of Understanding (MoU) to bring in capital
investment and employment opportunities.

1. Politics of Planned Development

Political competition
In a democracy or a democratic country, the final decision must be a political one, taken by the people's representatives who are
in line with the sentiments of the people. Everyone agrees that post-independence India will prosper with social and economic
justice as well as economic development.
There are differences of opinion as to what role the government should play in ensuring economic growth with justice.

Development ideas
• Any discussion on development can lead to contradictions, contradictions and arguments.
• 'Development' means becoming more 'modern' and becoming like the industrialized nations of the modern West.
• Modernization is associated with the ideas of development, physical progress and scientific rationality.
Project
Despite the various
differences, there is a
consensus on one point:
development cannot be left
to the private sector.
Therefore, the government
should design or plan for
development. In 1944, the
Bada industrialists
formulated a joint proposal
for the establishment of a
planned economy in the country, known as the Bombay Plan. After India gained independence, the Planning Commission came
into existence with the Prime Minister as Chairman.

2. Initial initiative
The first draft of the Five-Year Plan, and then the original DO YOU KNOW?
plan document released in December 1951 created a
Planning: Systematic control of optimal utilization of resources and
sensation in the country. Planned enthusiasm peaked
minimizing time wastage.
with the introduction of the Second Five Year Plan in
Capitalist economy: An economy in which the private sector is
1956 and continued to some extent until the Third Five given priority over social welfare.
Year Plan in 1961. Socialist Economy: It aims to establish the public sector and a
The first Five Year Plan (1951-1956) focused mainly on society of equality.
agriculture, with investment in dams and irrigation. One Bombay Plan: A joint proposal by a group of big industrialists to
of the primary goals of planners is to raise the level of establish a planned economy in the country, formulated in 1944.
national income, which is only possible when people save
more money than they spend.

3. Rapid industrialization
The second five-year plan laid the groundwork for heavy industries. It was prepared by a team of economists and planners led
by PC Mahalanobis.

The main controversy

• The development strategy followed in the early years raised many important questions.

Agriculture vs industry

• After the first two plans, agricultural development did not take place adequately. Gandhian economist J.C. Kumarappa
proposed an alternative blueprint with greater emphasis on rural industrialization.
• Others felt that poverty could not be avoided without a massive increase in industrial production.
Public vs Private Sector
India has adopted a 'mixed economy' where both the
public and private sectors coexist. Critics have argued that
planners have refused to provide adequate space and
incentives for development for the private sector. The
increased public sector has led to powerful selfish
interests, which have created significant barriers to
private capital.

DO YOU KNOW?
Planning Commission: This is the 'Extra-Constitutional Body', which plans to establish the country in March 1950 under
the chairmanship of the Prime Minister.
Plan Budget: This is the amount spent on a five-year basis as per the priorities set out in the plan.
Mixed economy: An economy in which both the private and public sectors coexist.

4. Major results of the first Five Year Plan

The initial initiative for planned development is to better understand the goals of economic development of the country and the
well-being of all its citizens. Those who benefited from unequal development soon became politically powerful and it became
more and more difficult to move in the desired direction.

There were three main results.

1. Financial foundations
• The foundation for India's future economic development was laid during the first two plans. Mega dams like Bhakra-
Nangal and Hirakud were built for irrigation and power generation.
• Some public sector heavy industries - steel mills, oil refineries, manufacturing units, defense production, etc. were
started during this period.
• Infrastructure for transport and communication has been greatly improved.

2. Land reforms
• The zamindari immigration system was abolished.
• Attempts were made to bring together small plots of land.

3. The Green and White Revolution

• In the 1960s, the government provided high-yielding seeds,
fertilizers, pesticides, and improved irrigation at high subsidized
prices. It was called the Green Revolution.
• Wealthy farmers and large landowners are its main beneficiaries.
• Some areas like Punjab, Haryana and western Uttar Pradesh are
agriculturally developed while others are lagging behind.
• In 1970, Operation Flood, a rural development program, was
launched.
• Aiming to increase milk production, Operation Flood has set up milk
producers' cooperatives as a nationwide milk grid.
• It was called the White Revolution. Varghese Kurian is known as the
'Dairy Merchant of India'.

5. Later Development
After 1967 there were several new restrictions on the private industry. Fourteen private banks were nationalized. The Indian
economy grew slowly between 3 and 3.5% between 1950 and 1980. Incompetence, corruption, etc. have caused people to lose
faith in the country's economy, thereby diminishing the importance of the state in the Indian economy since the 1980s. The
Second Five Year Plan also emphasized massive industrialization in rural areas, which was criticized for creating prosperity in
urban and industrial classes for rural welfare. It was also argued at ground level that this was a policy other than a failure to
implement the politics of the feudal classes. During the planning period, the agricultural sector saw serious efforts on land
reforms to end the feudal system and strengthen the land. Due to some shortcomings, they were not largely successful, meaning
that people violated the laws with considerable political influence and some laws remained only on paper. Between 1965 and
1967, there was a severe drought in many parts of the country and a drought situation in Bihar. On the other hand, food prices
in Bihar have also gone up and due to government zoning policy, food trade in the states has been restricted, which has reduced
food availability in Bihar.

SUMMARY
‘Development’ refers to the process of achieving the standard of living and the economic standard of industrial production.
Immediately after independence, the Government of India undertook the task of poverty alleviation, social and economic
redistribution and agricultural development. Due to the growing demand for iron internationally, Orissa's Reserve Iron-
Resource is an important investment destination to sign the Memorandum of Understanding (MoU) to bring in capital
investment and employment opportunities. Some conflicts have arisen in Orissa as the tribal population is being displaced
from their homes and environmentalists are worried about environmental pollution. Planning is the systematic control of
deliberate activity to achieve national goals. India was inspired to plan by the USSR to provide the necessities of life i.e.
advanced education, medical care and technical skills. The 'Bombay Plan' was formulated in 1944 to enable states to take the
lead in industrial and other economic investments. The Planning Commission of India was established in 1950 as the 'Extra-
Constitutional Body', chaired by the Prime Minister, chaired by the Minister in charge and other members. This will help
reduce time wastage and increase per capita income. Prior to independence, planning was considered necessary by setting
up a National Planning Committee in the 1930s to collect data and set targets as well as select five-year plans and annual
budgets. The first Five Year Plan was drafted in 1951 by economist K.N. Roy Target. The Green Revolution focused on new
strategies of agricultural policy introduced by the government, namely better irrigation of high yielding varieties of seeds,
fertilizers and pesticides at high subsidized prices. The Green Revolution created favorable conditions for poor peasants to
influence the 'middle class peasants' politically. Gave. The 'White Revolution' in Gujarat was started by Varghese Kurien,
known as the Dairy Merchant of India. He started the Gujarat Cooperative Milk and Marketing Federation Limited, which
further launched 'Amul'. The Amul model has become a model particularly suited to rural development and poverty
alleviation. The Kerala model is designed to involve the people in panchayat, block and district level planning based on a
'decentralized plan' focusing on education, health, land reforms, effective food distribution and poverty alleviation programs.
 Questions For Practice
1. Who started the "Grand Innovation 9. Intended to reform local self- 17. Which of the following statements
Challenge"? government? about the Bombay Plan is incorrect?
(a) Nithi Aayog (a) Economic status (a) It is a blueprint of the economic
(b) Planning Commission (b) Social status future of India
(c) National Planning Committee (c) Economic and social status (b) It supported state ownership of
(d) Finance Commission the industry
(d) None of these
2. The full form of the NITI Aayog? (c) It was built by some prominent
(a) National Institute for Transfer 10. The Tripura State Planning Board industrialists
India has been established? (d) It strongly supported the
(b) National Institution for (a) 1972 (b) 1971 planning idea
Transforming India (c) 1978 (d) 1965
18. When was Bombay Plan
(c) National Indian Transforming 11. Almost the most literate state in established?
Institute (a) 1944
India?
(d) None of the above (b) 1945
(a) Tamil Nadu (b) Andhra
3. Number of part-time members in Pradesh (c) 1943
the Ethics Commission? (c) Kerala (d) Manipur (d) 1934
(a) 5
12. Who says that "planning is a way of 19. Related to the socialist development
(b) 101
model?
(c) not more than 2 managing and utilizing resources
(a) USA (b) Europe
(d) 2 for maximum benefit in the context
(c) USSR. (d) Pakistan.
4. A rolling plan refers to a plan? of defined social goals"?
(a) does not change its target each (a) K.T. Shaw 20. Which of the following is not a factor
year (b) Planning Commission of India contributing to development?
(b) changes its allocation each year (c) Dr. Rajinder Prasad (a) Abundance of National
(c) changes its allocation and (d) None of these Resources
target each year (b) The nature of the people
(d) only changes its target each 13. Where did the idea for the Five-Year (c) Frequent and free elections
year Plan in India come from?
(a) United States of America. (d) Technology level
5. Which of the following is not in the
(b) Japan. 21. Which of the following is not a factor
Indian plan?
(a) Development plan (c) United Soviet Socialist contributing to development?
(b) Index plan Republic. (a) Abundance of National
(c) Democratic planning (d) Australia. Resources
(d) Centralized planning. 14. What are the two models of (b) The nature of the people
6. Who among the following is the development? (c) Frequent and free elections
Chairman of the Nitish Aayog? (d) Technology level
(a) Capitalist and Socialist
(a) The President (b) Capitalism and Marxism 22. Planning is considered a major tool
(b) The Prime Minister (c) Capitalism and Gandhianism in India?
(c) Union Minister (d) None of the above (a) Political development
(d) Minister of Finance (b) Cultural development
15. Which of the following ideas is not (c) Social development
7. Who will appoint the Deputy
Chairman of the Nitish Aayog? part of the early stages of Indian (d) Socio-economic development
(a) The Prime Minister development policy?
23. Which state faced drought
(b) President (a) Plan
conditions in 1965-67?
(c) Chief Executive Officer (b) Simplification
(a) Tamil Nadu
(d) Union Minister (c) Cooperative farming (b) Andhra Pradesh.
8. Has the establishment of the NITI (d) Self-sufficiency (c) Bihar
Aayog been announced? 16. Odisha tribesmen are worried (d) Manipur.
(a) 15 August 2015 about their displacement due to 24. Where did the idea of the Five-Year
(b) 15 August 2014 extraction of which mineral? Plan in India come from?
(c) 26 January 2015
(a) Copper (b) Zinc (a) the United States of America
(d) 26 January 2014
(c) Uranium (d) Iron ore (b) Japan
 (c) United Soviet Socialist Republic (a) Tamil Nadu 36. What is the name of the document
(d) Australia (b) Andhra Pradesh on which the Government of India
25. How many schemes have been (c) Bihar has planned all its revenue and
completed in India so far? (d) Manipur expenditure?
(a) Twelve (b) Six 31. Related to the socialist development (a) Census Report
(c) Eight (d) Four model? (b) Statistical Summary
(a) U.S.A. (b) Europe (c) Budget
26. Which of the following is not a (d) Union addresses
contributing factor to development? (c) USSR. (d) Pakistan.
(a) Abundance of National 32. Odisha tribesmen are worried about 37. The Second Five-Year Plan has been
Resources their displacement due to extraction launched?
(b) The nature of the people of which mineral? (a) 1955. (b) 1956.
(c) Frequent and free elections (a) Copper (b) Zinc (c) 1957. (d) 1958.
(d) Technology level (c) Uranium (d) Iron ore 38. The main obstacle in the path of
27. Which of the following ideas is not 33. Almost the most literate state in agricultural development?
part of the early stages of Indian India? (a) Attitude of the people.
development policy? (a) Tamil Nadu (b) The position of the landlords.
(a) Plan (b) Andhra Pradesh. (c) Land distribution model.
(b) Simplification (c) Kerala (d) Farmers' Health.
(c) Cooperative farming (d) Manipur
39. Which of the following ideas is not
(d) Self-sufficiency 34. Where did the idea of the Five-Year part of the early stages of Indian
28. The Planning Commission in India Plan in India come from? development policy?
was established by? (a) United States of America. (a) Plan
(a) 1953 (b) 1957 (b) Japan (b) Simplification
(c) 1960 (d) 1950 (c) United Soviet Socialist (c) Cooperative farming
29. What is the name of the document Republic. (d) Self-sufficiency
on which the Government of India (d) Australia
40. Planning commission was?
has planned all its revenue and 35. What is the name of the (a) Extra-constitutional body
expenditure? decentralized planning model
(a) Census Report approved by the State of South
(b) Neither Constitutional body nor
(b) Statistical Summary India?
executive body
(c) Budget (a) Kerala Model
(c) Executive body
(d) Union addresses (b) Tamil Nadu Model
(d) None of the above
30. 10. Which state faced drought (c) Andhra Pradesh Model
during 1965-67? (d) Karnataka Model

Solutions
1. (a) 5. (d) 9. (c) 13. (c) 17. (a) 21. (b) 25. (a) 29. (c) 33. (c) 37 (b)
2. (b) 6. (b) 10. (c) 14. (a) 18. (a) 22. (d) 26. (b) 30. (c) 34. (c) 38. (c)
3. (c) 7 (a) 11. (c) 15. (b) 19. (c) 23. (c) 27 (b) 31. (c) 35. (a) 39. (b)
4. (c) 8. (b) 12. (b) 16. (d) 20. (b) 24. (c) 28. (d) 32. (d) 36. (c) 40. (a)