<h5 id="political-contestation">Political contestation</h5> <ul> <li>The text discusses the concept of political contestation, emphasizing that major decisions, such as those involving economic development, should be made by people’s representatives who are in touch with the feelings of the people, even though expert advice is important.</li> <li>The text also briefly describes the 2006 demonstration by Orissa villagers against the proposed POSCO-India steel plant, which was prevented by the police.</li> <li>In the context of political ideologies, the text explains that the terms ‘Left’ and ‘Right’ characterize a group or party’s position regarding social change and economic redistribution.</li> <li>The Left often refers to those who support government policies for the benefit of the poor and downtrodden sections, while the Right believes that free competition and market economy alone ensure progress.</li> <li>The text mentions that in the 1960s, there was disagreement among political parties in India on the role of the government in ensuring growth with justice, leading to political contestation that continues to this day.</li> </ul> <p>======</p> <h5 id="ideas-of-development">Ideas of development</h5> <ul> <li>The concept of development can have different meanings for different sections of people.</li> <li>In the first decade after Independence, development was commonly associated with modernization, which involved the breakdown of traditional social structures and the rise of capitalism and liberalism.</li> <li>Modernization was also linked with ideas of growth, material progress, and scientific rationality, leading to categorization of countries as developed, developing, or underdeveloped.</li> <li>At the time of Independence, India had two models of modern development to consider: the liberal-capitalist model and the socialist model. There was a broad consensus that economic concerns of the government would need to focus on poverty alleviation and social and economic redistribution.</li> <li>The nationalist leaders were clear that the economic priorities of the government of free India would be different from the commercial functions of the colonial government, with debates focusing on industrialization versus development of agriculture and rural poverty alleviation.</li> </ul> <p>======</p> <h5 id="planning">Planning</h5> <ul> <li> <p>The Planning Commission, established in 1950, was not a constitutional body but a government resolution. It had an advisory role, and its recommendations were effective only when approved by the Union Cabinet.</p> </li> <li> <p>The Commission’s objectives, as defined in its establishing resolution, were to promote social justice and economic welfare by securing citizens’ right to an adequate means of livelihood, distributing community resources for the common good, and preventing the concentration of wealth and means of production.</p> </li> <li> <p>The Planning Commission was replaced by NITI Aayog (National Institution for Transforming India) in 2015, with a focus on fostering cooperative federalism and enabling a more broad-based, inclusive development strategy.</p> </li> <li> <p>The concept of planning as a tool for economic rebuilding gained widespread support in the 1940s and 1950s, driven by experiences of the Great Depression, inter-war reconstruction in Japan and Germany, and the Soviet Union’s rapid economic growth.</p> </li> <li> <p>Contrary to common assumptions, a section of big industrialists drafted the Bombay Plan in 1944, advocating for a planned economy with significant state involvement in industrial and economic investments, making planning a widely accepted development strategy post-independence.</p> </li> </ul> <p>======</p> <h5 id="the-early-initiatives">The Early Initiatives</h5> <ul> <li>The Planning Commission of India, similar to that of the USSR, introduced five-year plans (FYP) for India’s economic development.</li> <li>The budget of the central and state governments is divided into ’non-plan’ and ‘plan’ budget. Non-plan budget is spent on routine items annually, while plan budget is spent on a five-year basis according to the plan’s priorities.</li> <li>Five-year plans allow the government to focus on long-term interventions in the economy and the larger picture.</li> <li>The First Five Year Plan document, released in December 1951, generated excitement and extensive discussions among various sections of society.</li> <li>The novelty of planning had declined by the time the Fourth Plan was due to start in 1966, and India decided to take a ‘plan holiday’ due to an economic crisis. Despite criticisms, the foundation of India’s economic development was firmly in place.</li> </ul> <p>======</p> <h5 id="the-first-five-year-plan">The First Five Year Plan</h5> <ul> <li>The First Five Year Plan (1951-1956) aimed to improve the Indian economy and move it away from poverty.</li> <li>The Plan focused on the agrarian sector, with significant investments in dams and irrigation, due to the sector’s severe impact from Partition.</li> <li>Land reforms were identified as key to agricultural growth and the country’s development.</li> <li>Planners aimed to increase national income by encouraging savings, as the basic level of spending was low in the 1950s.</li> <li>People’s savings did rise during the initial phase of planned economic process, but not as significantly as expected. The savings proportion dropped consistently from the early 1960s to the early 1970s.</li> </ul> <p>======</p> <h5 id="rapid-industrialisation">Rapid Industrialisation</h5> <ul> <li>The Second Five-Year Plan (FYP), drafted by a team under P.C. Mahalanobis, focused on rapid industrialization and a socialist pattern of society.</li> <li>The government imposed tariffs on imports to protect domestic industries, allowing both public and private sectors to grow.</li> <li>India’s development was significantly influenced by the emphasis on industrialization, with sectors like electricity, railways, steel, and communication growing in the public sector.</li> <li>The plan faced challenges, including technological backwardness and the potential for food shortages due to increased investment in industry over agriculture.</li> <li>Critics of later plans, including the Third FYP, noted an urban bias, prioritization of industry over agriculture, and a focus on heavy industries rather than agriculture-related ones.</li> </ul> <p>======</p>