(Sample Material) UPSC IAS Mains GS Online Coaching : Paper 3 - "Indian Economy and Issues Relating to Planning"

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Subject: General Studies (Paper 3 - Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management)

Topic: Indian Economy and Issues Relating to Planning


The process of planning in India tried to include all the aspirations of nationalist movement as well as of the future generations. But this will be a highly general comment upon the objectives of planning in India. We need to delve into the specific and objective goals of planning in India to further our discussions. Some of the historic deliberations regarding planning will serve our purpose:

1.Reviewing the entire situation, in the light of the social philosophy evolved over decades, the Constituent Assembly came to the conclusion that to guide this ‘revolution of rising expectations’ into constructive channels, India should make determined efforts through carefully planned large-scale social and economic development and the application of modern scientific and technological improvements, to bring about a rapid and appreciable rise in the standard of living of the people, with the maximum measure of social justice attainable. On the whole it was a call for India becoming a Welfare state. This important deliberation does not only call for the necessity of planning for the country but it also outlines the broader objectives of planning, too.

2.There are three important features included by the Constitutional provisions which pertain to the objectives of planning in the country:”

(i) ‘Economic and social planning’ is a concurrent subject. Also, while framing the ‘Union’, ‘State’ and ‘Concurrent’ list, allocating subjects and other provisions, the Constitution vests power in the Union to ensure co-ordinated development in essential fields of activity while preserving the initiative and authority of the states in the spheres allotted to them.
(ii) The Constitution includes provisions for promoting co-operation on a voluntary basis between the Union and the states and among states and groups of states in investigation of matters of common interest, in legislative procedures and in administration, thus avoiding the rigidities inherent in federal constitutions (Articles 249, 252, 257, 258, 258-A, and 312). In other words, the objective is co-operative federalism.
(iii) The Constitution also sets out in broad outline the pattern of the welfare state envisaged and the fundamental principles on which it should rest. These are the major cornerstones of planning and its objectives enshrined in the Constitution that will breed enough Union- State tussle in coming decades and make it compulsive for the Government to resort to ‘reforms with a human face’ rhetoric. We can see the methodology of planning taking a U-turn in the era of the economic reforms since early 1990s.

3. The Government resolution announcing the setting up of the Planning Commission (March 1950) started with a reference to the constitutional provisions bearing on the Socio-economic objectives of the Constitution. The Fundamental Rights and the Directive Principles of the Constitution assure every citizen, among other things, adequate means of livelihood, opportunities for employment and a socioeconomic order based on justice and
equality. Thus, the basic objectives’ of planning were already given in the provisions of the Constitution of India. These were emphatically stated in the First Five-Year Plan (1951-56) itself, in the following words: “The urge to economic and social change under present conditions comes from the facts of poverty and of inequalities in income, wealth and opportunity. The elimination of poverty cannot obviously, be achieved merely by redistributing existing wealth. Nor can a programme aiming only at raising production remove existing inequalities. These two have to be considered together.

4.The above objectives of planning were emphasised in one form or the other in the coming times also. As the Second five-year Plan (1956-61) said: “The Plan has to carry forward the process initiated in the First Plan period. It must provide for a larger increase in production, in investment and in employment. Simultaneously, it must accelerate the institutional changes needed to make the economy more dynamic and more progressive in terms no less of social than of economic ends.”

5.The same objectives were repeated by the Sixth Five-Year Plan (1980-85) in the following words: “The basic task of economic planning in India is to bring about a structural transformation of the economy so as to achieve a high and sustained rate of growth, a progressive improvement in the standard of living of the masses leading to eradication of poverty and unemployment and providing a material base for a self-reliant economy.”

6.It will be highly needful to enquire about the objectives of planning in the era of the economic reforms initiated in the fiscal 1991- 92 as this new economic policy (NEP) made the experts and economists to conclude many questionable things about the objectives of planning in the country:

(i) There did had on the wage employments still, others based on self-employment.
(ii) The state is rolling back and the economy is becoming pro-private and sectorwise the social purpose of the planning will be lacking.
(iii) The objectives of planning nearly outlined hitherto have been blurred.
(iv) The promotion of foreign investment will induce the economy into the perils of neo-imperialism, etc.

But all the above-given doubts were cleared by the forthcoming plans in straightforward words. We may quote from the following Plans:

(i) “For the future economic development, the economy will be more dependent upon private participation and the nature of planning will become more indicative with the major objectives of planning remaining the same”. This was announced by the Government while launching the economic reforms (July 23, 1991) and commencing the Eighth five-year Plan (1992-97). “There was no change in the basic objectives of planning even though there was change in instruments of policy”—this was announced by the Government while announcing the new economic policy (1991).
(ii) While the Ninth Plan (1997-2002) was being launched it was announced, “The goals of planning in India, which were set by Panditji have not changed. The Ninth Plan does not attempt to reinvent the wheel. At the same time, the goals and targets this Plan attempts to achieve are based on the lessons of experience including the Eighth Plan. They address today’s problems and challenges and try to prepare the nation for tomorrow as well.”

Finally, a broad consensus looks evolving through the process of planning and crystallising on the six major objectives of planning in India which are as follows:

(i) Economic Growth: Sustained increase in the levels of production in the economy is among the foremost objectives of planning in India which continues till date and will be so in future, without any iota of doubt in it.

(ii) Poverty Alleviation: Poverty alleviation was the most important issue which polarised the members of the NPC as well as the Constituent Assembly that a highly emphatic decision in favour of a planned economy evolved even before independence. Several programmes have been launched in India directing the cause of poverty alleviation by all the Governments till date and the process continues even today with more seriousness.

(iii) Employment Generation: Providing employment to the poor has been the best tool of economics to alleviate poverty. Thus, this objective of planning in India comes naturally once it committed itself to alleviate poverty. Employment generation in India has been, therefore, part and parcel of the objective of poverty alleviation in India. General programmes and schemes have been launched by the Governments from time to time in this direction, some based on the wage employments still, others based on self-employment.

(iv) Controlling Economic Inequality: There were visible economic inequalities in India at the inter-personal as well as at the intra-personal levels. Economic planning as a tool of checking all kinds of economic disparities and inequalities was an accepted idea by the time India started planning. To fulfill this objective of planning the Governments have enacted highly innovative economic policies at times even inviting a tussle with regard to the Fundamental Rights Constitution. Though Indian Planning has socioeconomic objectives to fulfill, only economic planning was made a part of the planning process (technically speaking) and social planning (better called social engineering) was left to the political process. That is why reservation in government jobs and admissions in premier academic institutions, land reforms, promoting inter-caste marriages, etc. do not fall under the purview of the Planning Commission.

(v) Self-reliance: During the 1930s and 1940s, there was an ardent desire among the nationalists, capitalists and the NPC for making the economy self-reliant in every field of the economic sphere. Self-reliance was defined not as autarchy but as an effort to strike against a subordinate position in the world economy. As Jawaharlal Nehru asserted: self-reliance, “does not exclude international trade, which should be encouraged but with a view to avoid economic imperialism.’” India still strives for self-reliance in every field of economy as well as serving the realities of higher interdependence in the globalising world post- World Trade Organisation (WTO).

(vi) Modernisation: Modernising the traditional economy was set as a foremost objective of the planning. Specially, the agriculture sector of the economy needed an immediate inclusion of modern methods and techniques of farming dairying, etc. Similarly, in education too, India needs to go for inclusion of modern education system. India did not miss the chance of accepting the importance of modern science and technology. As the economy had selected industry as its prime moving force (PMF), it was essential to adopt the changing dimensions of science and technology.

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