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Ch-6 - CHAPTER 6 Development Strategies till 1991...

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C HAPTER 6 Development Strategies till 1991 Introduction Economies grow and develop of their own accord. Some philosophers thought that they should be allowed to function without much intervention. Market will decide their course. However, in all economies, the States have been finding it necessary to intervene for one reason or another, including, sometimes, in the interest of market. The manner, the extent and the pace differed in different economies, depending upon nature of the State, the level of development and ideological orientation of the people and the government they chose. Demonstration effect of development in other economies and thinking of multilateral/international agencies may have no less impact. When India got Independence and became a Republic, she chose to follow the path of ‘planning by social and economic development’, which meant that the State would play a proactive role in deciding the levels and methods of production, distribution, and consumption of economic and social activities while respecting institutions of private property and market. Our Constitution itself gave scope for the market to function; yet, asked the State to intervene in its functioning. It directed the State to frame its policies with a view to, among others, securing, 1. that the ownership and control of the material resources of the community are so distributed as to subserve the common good, and 2. that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. Admittedly, in our Constitution, there is no elaborate direction for institutions, which will carry out the activity of planning economic and social development, except that there exists an entry in the concurrent list of the seventh schedule, which reads as ‘economic and social planning’. Yet, within fifty days of promulgation of the Constitution, the Planning Commission was set up on 15 March 1950 by a resolution of the Cabinet. Jawaharlal Nehru was made its Chairman. Since then, we find that the Prime Minister is the ex-officio Chairman of the Planning Commission. It has a few Minister members and a few independent, normally full time, members.
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80 INDIAN ECONOMIC DEVELOPMENT History of Planning before Independence A little history of State planning may be in order. Political independence was considered important from the point of view of economic emancipation of the masses. We started making preparations after we were allowed to form the governments in provinces under Government of India Act, 1935. Before that, we had only three models: one in operation in the then USSR since 1928, another, a book, by engineer-statesman M. Visvesvaraya written in 1934, and the third, ideas promoted by an eminent economist, J.M. Keynes. Planning had shown immense success in industrialising the economy of Russia in ten years that had gone by. Proposing doubling of national income in ten years, Visvesvaraya wrote: “The Indian problem is fundamentally industrial and should be
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