'A Mighty Adventure': Institutionalising the Idea of Planning in Post-Colonial India, 1947- 60 Author(s): Medha Kudaisya Source: Modern Asian Studies, Vol. 43, No. 4 (Jul., 2009), pp. 939-978 Published by: Cambridge University Press Stable URL: http://www.jstor.org/stable/40284916 Accessed: 11-09-2016 13:51 UTC JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://about.jstor.org/terms Cambridge University Press is collaborating with JSTOR to digitize, preserve and extend access to Modern Asian Studies This content downloaded from 115.184.41.220 on Sun, 11 Sep 2016 13:51:40 UTC All use subject to http://about.jstor.org/terms Modern Asian Studies 43, 4 (2009) pp. 939-978. © 2008 Cambridge University Press doi: 10.101 7/S0026749X07003460 First published online 9 October 2008 CA Mighty Adventure': Institutionalising the Idea of Planning in Post-colonial India, 1 9 4 7- 60 MEDHA KUDAISYA National University of Singapore Email: [email protected] Abstract This essay examines the Indias' political leadership's romantic engagement with the idea of developmental planning in post-colonial India between 1947 and i960. It looks at the experience of planning in India between 1947 and i960. It explores some of the early ideas about developmental planning and the setting up of the Planning Commission in March 1950. Although there was widespread acceptance of the need for planning there was little consensus on the kind of planning that was required, or how it should be carried out. This essay examines attempts, which were made to institutionalise the planning idea. It looks at the heady ascent of the Planning Commission as the pre-eminent economic decision- making body in Independent India and the debates and contentions that took place in the early years of its formation. It argues that the 1956 foreign exchange crisis marked a climactic moment for planning. Thereafter, as far as economic decision-making was concerned, the locus of power shifted from the Planning Commission to other governmental agencies and the developmental planning process itself came to be over-shadowed by pragmatic economic management pursued by official agencies. Thus, in overall terms, developmental planning failed to establish strong institutional foundations in independent India and, in all this, the experience of the 1950s was formative. Introduction 'The more we thought about this planning business, the vaster it grew in its sweep and rage till it seemed to embrace almost every activity upon me 1956, p. 402) This essay seeks to unravel the chequered histories of developmental planning in post-colonial India. It argues that the Indian political leadership's romance with developmental planning lasted merely 10 939 This content downloaded from 115.184.41.220 on Sun, 11 Sep 2016 13:51:40 UTC All use subject to http://about.jstor.org/terms 94O MEDHA KUDAISYA years and that the attempts to institutionalise planning fizzled out within a decade of Independence. By the late 1950s the euphoria over planning had largely evaporated among Indian policy-making circles, even though the formal structures of planning continued. This was ironical given how central planning was to the discursive and institutional aspects of nation-building. 'Planning' and the 'developmentalist' impulse, were perhaps the most important raison d'etre of the new post-colonial state and high on the agenda of political leaders anxious to build legitimacy. Through planned development, the leadership intended to accomplish what they had critiqued the colonial state for not being able to do, i. e. to bring about the benefits of material progress through scientific means to be shared equitably among all citizens. Planning thus held high ground. As Partha Chatterjee points out, it also transplanted the power to assign national priorities from the politicians to the technocrats. The state could project itself as a technical, non-partisan and disinterested instrument working towards a modern, industrial society and engaged in exercising state power, insulated from the realm of politics.1 It is well known that in the 1930s and '40s the idea of planning had captured the imagination of the Indian political leadership. An avid advocate of the 'scientific outlook', Jawaharlal Nehru in his presidential address to the Indian National Congress in 1936 brought institutional attention and urgency to the need to address India's economic problems.2 Following this, in 1938, the Congress set up a 'National Planning Committee' to envision how independent India would be reconstructed.3 The fascination with planning grew 1 1 Partha Chatterjee, The Nation and Its Fragments: Colonial and Post-colonial Histories (Princeton: Princeton University Press, 1999), pp. 200-205. Also see Gyan Prakash, Another Reason: Science and the Imagination of Modern India (Delhi: Oxford University Press, 2000), Chapter 6. 1 The Presidential Address' in S. Gopal (éd.) Jawaharlal Nehru Selected Works, vol. 7 (First Series) (Delhi: Orient Longman, 1975), pp. 170-195. 3 This important body included Nehru, Sir Visweswaryya, Purshotamdas Thakurdas, A.D. Shroff, Ambalal Sarabhai, K.T. Shah and physicist Meghnad Saha. As Nehru put it, 'Hard-headed Big Business was there, as well as people who are called idealistic and doctrinaire and socialists and near-Communists'. On the National Planning Committee, seej. Nehru, Discovery of India (London: Meridian Books, 1965) p. 401. Also see Jagdish N Sinha, 'Technology for national reconstruction: The National Planning Committee, 1938-49' in Roy MacLeod and Deepak Kumar, (ed), Technology and the Raj: Western Technology and Technical Transfers to India ijoo-1947 (Delhi: Sage Publications, 1995), pp. 250-264 and Prabhat Patnaik, 'Some Indian Debates on Planning' in Terence J Byres, The Indian Economy: Major Debates Since Independence (Delhi: Oxford University Press, 1998), pp. 159-192. This content downloaded from 115.184.41.220 on Sun, 11 Sep 2016 13:51:40 UTC All use subject to http://about.jstor.org/terms PLANNING IN POST-COLONIAL INDIA 941 in the penultimate decade of India's anti-colonial struggle as the political leadership increasingly contemplated the future. The 1940s saw three major plan blueprints - the 'Bombay Plan', pioneered by several leading industrialists, visualised planning as an aid to capitalist development; the 'People's Plan' authored by M. N. Roy projected a Leftist vision; and the 'Gandhian Plan,' put forth by Shriman Narayan, visualized a self-sufficient village economy.4 The 1940s was also a decade in which economic deprivation, food paucity and the 'Great Bengal Famine' (which claimed several million lives) intensified the awareness of the need for developmental planning. The war exper- ience demonstrated what could be achieved if the state undertook the mobilization of resources; it engendered faith in governmental intervention in economic life.5 The leadership perceived economic planning as the means to overcome deficiencies of the market-price system and enlist public support to realize national objectives. The international context also promoted a favourable view of planning. Labour's 1 945 victory in Britain, the passing of Employment Acts in the UK and the USA and the Beveridge Report on Full Employment in a Free Society (1945) reinforced the idea that state intervention was imperative for economic reconstruction.6 The setting up of multi-lateral economic institutions such as the International Monetary Fund (IMF) and the World Bank, to lay down the rules of the post-war global economic architecture, also convinced India's new leaders that they needed to create institutions to plan the economy. Thus, by the time India gained independence in 1 947, 'planning' had become a buzzword. 'Planning was in the air', recalled Tarlok Singh, the longest serving member of the Planning Commission, sometimes called 'India's Mr Planning'.7 Such zeal led the political leadership to 4 For a general background to ideas of development, see B. Zachariah, Developing India: An Intellectual and Social History (Delhi: Oxford University Press, 2005). On the ideas of big business, see Medha Kudaisya, The Life and Times of G D Birla (Delhi: Oxford University Press, 2003). 5 In 1944, the Government of India set up the Department of Planning and Development to look into post-war economic reconstruction. Provincial governments also began to prepare post-war 'development' schemes. In 1946, the Interim Government, headed by Nehru, appointed a high-powered Advisory Board on Planning, which recommended the establishment of a planning body. b As I.G. Patel, economist and civil servant who played an important role from the 1950s till the 1980s in various capacities within the Government of India, recalls: 'It was not Soviet Communism but American Liberalism and British Labour which were the foundation stones of our views on economic policy.' I.G. Patel, Glimpses of Indian Economic Policy: An Insider's View (Delhi: Oxford University Press, 2002), p. 17. 7 Interview with the late Mr Tarlok Singh, New Dehi, November 2005. This content downloaded from 115.184.41.220 on Sun, 11 Sep 2016 13:51:40 UTC All use subject to http://about.jstor.org/terms 942 MEDHA KUDAISYA institutionalise the idea of planning, the most significant outcome of which was the setting up of the National Planning Commission (PC) by the Government of India in March 1950. To Jawaharlal Nehru, managing the economy through processes of developmental planning, represented a systematic attempt at national reconstruction, at uplifting large sections of the populace out of poverty, at boldly industrializing an agrarian society and, further, at ensuring that India occupied its place of pride as a front-ranking Asian nation.