Political Science and

International Relations
Planning and Economic Development

Arvind Singh Rajpurohit

ArvindaPSIR
PLANNING & ECONOMIC REFORMS
• Nehruvian & Gandhian Perspective
• Role of Planning in Public sector
• Green Revolution
• Land Reforms
• Agrarian Relation
• Liberalisation and Economic Reforms
PYQs
1. How does NITI Aayog as a ‘policy think tank with a shared vision’ visualize the reorganization of planning
in India? Justify your answer. (2023, 200W, 15M)
2. What explains India’s modest improvements in social development outcomes even as the rate of growth
has accelerated since the initiation of economic reforms? (2021, 200W, 15M)
3. ‘Liberalisation of Indian Economy has not been accompanied with adequate reforms’. Comment. (2020,
200W, 15M)
4. What has been the political fallout of the Green Revolution in India? Explain. (2019, 200W, 15M)
5. Comment on: In the post-liberalization era, Indian politics is moving from ascriptive politics to
developmental politics. (2017, 150W, 10M)
6. What do you understand by Green Revolution? Do you think that a Second Green Revolution is needed to
adequately address the agrarian challenges in contemporary India? Examine. (2017, 200W, 15M)
7. Critically examine the politics of Economic growth in India. (2016, 250W, 20M)
8. Land reforms have failed in the eradication of rural poverty. Comment. (2016, 250W, 20M)
9. In the light of neo-economic policies adopted since 1991, examine the relevance of the term ‘socialist' in
the Preamble of the Indian Constitution. (2015, 250W, 20M)

ArvindaPSIR
PYQs
10. Compare the Nehruvian and Gandhian models of development. (2015, 200W, 15M)
11. Comment on: Gandhian perspective of development and its contemporary relevance.
(2013, 150W, 10M)
12. Critically examine Green Revolution as a strategy for sustainable agriculture
development. (2012)
13. Comment on: Economic liberalisation and uneven development among Indian States.
(2010)
14. Do you think that post-1991 reforms in India mark a significant shift from the
Nehruvian model of economic development? Justify your answer. (2010)
15. Comment on: Nehru’s View on socialism. (2007)
16. Comment on: Decentralized Planning. (2006)
17. Comment on: New Economic Policy (1991). (2002)
18. Comment on: Impact of disinvestment and privatization on planning in India. (2001)

ArvindaPSIR
 Gandhian Approach to Development
• Gandhi was not an economist in conventional sense, nor he
had given any systematic views on the model of development
to be adopted by India.
• We get the blueprint of Gandhian idea of development in his
book "Hind Swaraj".
• He was critical of the Western model of development and
believed that if others also adopt same model, atleast 9 more
Earth will be needed.
• The fundamental Idea governing Gandhian approach to
development was the Principle of Non-violence and Swaraj.
Non-violence even towards nature and minimization of needs.
• The key pillars of Gandhian approach to economic growth :
1. emphasis on ‘plain living’ which helps in cutting down your wants
and being self-reliant
2. small scale and locally oriented production to give employment to
everyone and promoting Sarvodaya
3. trusteeship principle
4. Sarvodaya : Welfare of all
5. Decentralization and self reliance
Gandhian approach towards the way of life can be
understood on the basis of his concept of 7 sins.
• 7 sins of Gandhi
1. Wealth without work
2. Pleasure without conscience
3. Knowledge without character
4. Commerce without morality
5. Science without humanity
6. Worship without sacrifice
7. Politics without ethics
• At the time of Independence, Gandhians
like- J.N. Aggarwal, Sriman Narayan have
proposed Gandhian plan.
The key ideas of Gandhian Plan were
1. Focus on rural employment through agricultural development (address hunger and unemployment) and
cottage industries ( Khadi - for supplementary income, and address requirement of clothing)
2. Political and economic power should be decentralized to local governance bodies like Gram Panchayats,
aligning with Gandhi's vision of Gram Swaraj (village self-rule).
3. Vision of self-sufficient villages where local communities produce what they need
4. Emphasis on a simple, sustainable lifestyle using local resources, aligning with Gandhian values of truth
and non-violence.
5. Emphasis on cooperative farming and community-owned production units, ensuring equitable
distribution of resources and benefits.
6. Focus on education, healthcare, and sanitation as essential components of human development in rural
areas, promoting holistic development.
7. Development should include a moral dimension, fostering self-discipline, non-violence, and spiritual
progress alongside economic growth.

• Thus the focus of Gandhian plan was to fulfill the basic necessities as a priority
 Gandhi on Industrialisation
• There is often a misunderstanding that Gandhi was completely against machines
and industrialization
• Gandhi was not against machines or technology in principle. He acknowledged
their importance in reducing human drudgery and improving the quality of life.
What Gandhi opposed was the blind imitation of Western industrial models,
which he believed prioritized profit over people and exploited resources without
consideration for social and environmental consequences.
His concerns were-
1. Machines should not pitted against human being.
2. Mechanization results into accumulation of wealth and increases
exploitation.
• Thus Gandhian approach was to make Indian villages a self sufficient entities.
• He was for the revival of village Republic as he believed that India lives in
villages. Without revival of villages the goal of Swaraj remains incomplete.
• Gandhian approach was not adopted by Government in independent India.
• We can see the consequences of the neglect of Gandhian approach. Economic
model which we have adopted to Catch-up with Western countries has been
unsustainable and full of conflict with nature. The developmental model has
resulted into imbalanced growth and widening of the gap between India and
Bharat.
Nehruvian Model
• Nehru was also not an economist. Nehru
was modernist. He was impressed by the
achievements of USSR. He wanted to make
India a modern and scientific society. He
described his philosophy as progressive
socialism and wanted India to be a society
based on socialistic pattern.
• Nehru's real approach towards the
development strategy can be understood
from second five year plan which was based
on Nehru-Mahalanobis Model.
Features-
1. Investment in heavy industries
➢ Why?
a. It will promote capital formation
b. It will make India independent of the foreign import of the essential goods.
c. India can exercise more autonomy in other areas and protect itself from bargaining by western countries.
2. Public Sector Dominance: The model envisioned a dominant role for the public sector in key
industries, especially in the heavy industries, infrastructure, and energy sectors. Public sector
will not only address the concentration of wealth, it will also be providing employment.
3. Nehru introduced centralised planning. Despite the fact that centralised planning goes against
the spirit of federalism.
4. Capital Goods Over Consumer Goods:Nehruvian model neglected consumer industries.
Indians were to make sacrifices in short term for a better life in long-term.
5. Import Substitution: The model supported import substitution, encouraging domestic
production of goods that were previously imported, particularly in industries like steel,
engineering, and chemicals.
6. Nehru was not against agrarian reforms but he believed that industrialisation will create more
demand for agricultural goods and industrialization will provide fertilizers, equipments for
promotion of agriculture.
7. Nehru knew that his model will create shortages of the basic commodities hence he
introduced physical control on rationing and administered pricing.
Criticism
1. In order to avoid income disparities, Nehruvian model had put state in the commanding heights of
Economy and kept Private sector weak to check accumulation of wealth.
2. The model was criticized for neglecting the agricultural sector, which led to slower growth in agriculture,
food shortages, and an imbalance between rural and urban development.
3. The focus on heavy industry led to excessive capital investment in large-scale industries, while consumer
goods production and job creation in the informal sector lagged behind.
4. Neruvian policies could not address the structural weaknesses of Indian Economy. Rationing had resulted
into black marketing. Public sector were not working on economic logic it was producing poor quality
goods at a higher price.
5. Nehruvian model was import substitution and export promotion. However India could not produce such
manufactured goods which can be exported.
6. Nehruvian model resulted into India becoming "License Permit Quota Raj" which ultimately made India
an inspector Raj or overdeveloped state.
7. Successors of Nehru have not made correction despite understanding the weaknesses. They rather
continued with more populist policies like- "Garibi Hatao". Garibi Hatao remained rhetoric in pre Reform
period. As good as 45% of Indian population was living below the poverty line.

ArvindaPSIR
 Planning and Public Sector
• Planning is a feature of socialist countries. The idea of planning is
to determine the priorities and to go for the best possible use of
resources.
• The objective of planning was higher growth and balanced
development.
• Planning has resulted into state achieving the commanding
heights in the economy. PSUs and other public sector were the
major service provider.
• Public sector with the exception of few PSUs started showing the
weaknesses of the model. It developed certain structural
problems like- overmanning, low work ethics, low capacity
utilisation, excessive expenditure, fiscal deficit, absence of
rational pricing policy and negative rate of return.
• Above policies became unsustainable. India came under the
financial crisis.
• Country was left with the foreign exchange which could pay the
bill of imports only for a week. The credit of India was in question
(sovereign debt crisis). Ultimately India was forced to change.
• According to Vimal Jalan former RBI Governor, PSUs were like old
family silver where family had to spend more to keep shine in the
silver.
 Liberalisation of Indian Economy
• India was known as "Caged Tiger". It was predicted that if cage is
broken then India will run at the speed of free tiger.
• It showed the potential of Indian economy which has been caged
by populist policies. It is unfortunate that India took so long to
make structural adjustment.
• India waited for crisis to happen. One of the major situational
factor which had accelerated the crisis was Gulf War and
disintegration of USSR.
• According to Amartya Sen- contrary to the prediction the spirit of
tiger was not as it should have been.
• There is a lack of consensus among scholars as to whether
external factor or internal factors led to the change in the
Economic policy. There is also a debate on the consequences of
new model.
• According to Vimal Jalan it is good that at present there is no
debate over the desirability of reform. Now all major parties agree
that there is no alternative.
 Current State of Liberalisation
• According to Economic Survey 2016-17 there ▪ Contrary to the opinion that there is over bloated
expenditure by government in India, the
has been a remarkable transition from closed expenditure is not more than what is normal for
economy to open and thriving economy. the country in accordance to the level of
development of the country.
• Progress is not only qualitative, it is 5. Foreign Direct Investment (FDI) and Foreign
measurable. Portfolio Investment (FPI):
• Survey has evaluated liberalisation on the ▪ FDI and FPI inflows have increased significantly
due to deregulation, reduced restrictions, and
basis of 4 standard measures. improved ease of doing business.
1. Openness to the Trade- 6. Service Sector Boom:
▪ In comparison to the size, India is trading with • The service sector, particularly information
International Economy, more than expected. technology (IT), business process outsourcing
2. Openness to Foreign Capital- (BPO), and financial services, has become the
backbone of the Indian economy. It contributes
▪ Despite capital controls, the net inflow of foreign more than 50% of India’s GDP
capital is as normal as any other emerging 7. Recent reforms continue to push liberalisation
economy. India has received FDI at annual rate of
$75b which is not short of what China was forward. Notable initiatives include the Goods
receiving at the height of economic boom in mid and Services Tax (GST), which has unified the
2000. market, Insolvency and Bankruptcy Code
3. Extent of PSUs- (IBC), and labour reforms.
▪ Contrary to the myth that India has large PSU,
India has significantly rolled back on public sector
including in sectors like Civil aviation, telecom
and financial services.
4. Government Expenditure-
• To sum up India is a normal emerging market pursuing the standard
Asian Path of Development. Since 1980 there is 4.5% per capita
increase in income.
• According to survey achievement is remarkable as it has been
achieved under extremely Competitive Democratic System.
• It is achieved even in a situation when government policy making is
severely constrained (Supreme Court Activism).
• However survey mentions about ineffective redistribution, welfare
schemes suffer from considerable miscalculations.
Impacts of Liberalisation-
• According to Montek Singh Ahluwalia - in his article "Economic
Reforms A Retrospective View"
• Reforms have done well in some areas and have neglected some
areas.
1. Reforms and poverty alleviation- The percentage of the population living
below poverty line in 1983 was 44.5 % and the absolute number of Poor
was 323 million.
2. In 1993-94 immediately after Reform, there was marginal increase in
number of poor below poverty line which became 43.5% and in terms of
number 404 million.
3. Between 1993-94 to 2004-05 - Based on Tendulkar Committee estimates.
▪ Poverty declined from 45.3% to 37.2%. In terms of number there was an addition. It
became 407 million.
4. Between 2004-05 to 2011-12 - There is a faster decline from 37.2% to
21.9% (based on Tendulkar Committee)For the first time even absolute
number declined from 407 million in 2004-05 to 269 million in 2011-12.
• Even 269 million is huge number and employment opportunities and
the situation of people just above whatever employment has been created
poverty line is also not qualitatively very is of Bad quality.
different. We do not have good record • Indian Economy has moved into Middle-
in delivering basic services like- Income Status. India is bound to face
Education, Health, Sanitation, Clean challenges of getting stuck in "Middle
drinking water. Income Trap" if we do not design our
• If we want to reduce poverty to the reforms carefully.
truly marginal level, we require 8% rate • Montek Singh Ahluwalia suggested that
of growth of economy for next 20 years 1. First tackle corruption
• With unskilled population and 2. End Red tappism
unhealthy population, we cannot 3. Invest in Human Capital
achieve the target. 4. Reform factor Market
• The another failure of Reform is that it 5. Increasing jobs
has not resulted into growth of 6. Rehabilitate state capacity.
 Views of Amartya Sen
• Uncaging the tiger has not resulted into tiger like spirit.
• The question is not overall growth but overall growth pattern. It has not
resulted into corresponding transformation in the living standard.
• Progress on social indication have gone down in comparison to pre-reform
period.
• There is stagnation in agriculture.
• The growth of jump in service sector has not resulted into the benefits at
the ground level because people lacks skills.
• There is also increasing poverty in so called BIMARU States. The problem
of Hunger exists amongst plenty.
• He appreciates China as China have invested in basic human capabilities
and has been in a position to take the benefits of Globalisation.
• Bimal Jalan : There is no doubt that we can release creative energy,
accelerated growth and productivity but India's record in social indication
is among the bottom Countries. It would be grave mistake if we do not go
for critical reform.
Land Reforms
• Purpose- Eradication of Rural poverty and
Hunger.
• Philosophy of Land Reforms-
➢Based on Socialist Idea of the Redistributive
Justice
• History of Land Reforms
➢There was a huge participation of Peasants in
National Movement and Land Reforms was
one of the promises of Congress.
➢According to Daniel Tanner India is the most
interesting case study of Land Reforms
considering the largest Land Reform legislation
and extremely huge number of Poors and
Hunger.
• What does Land Reform indicate in India?
➢In case of India, Land Reforms mean institutional reforms aiming at
addressing the concentration of wealth and giving land to landless.
• Constitutional provision-
1. Directive principles article 39 b & c makes it a constitutional obligation of
Indian State to address the concentration of wealth and economic
resources.
2. 44th Amendment Act has repealed Right to Property
3. 9th schedule introduced by 1st Amendment Act contains large number of
land Reform legislation.
Types of Land Reforms-
1. Zamindari abolition-
➢ This is the only successful aspect of Land Reform.
➢ However success is formal because most of the Zamindar got heavy compensation, they
became tenants and brought land under self cultivation.
➢ They heavily invested the capital in Rural Industries like Rice Mill.
2. Tenancy Reform
➢ Tenancy reforms introduced to regulate rent, provide security of tenure and confer ownership
to tenants. Tenancy reforms are also comparatively successful.
➢ The most successful effort has been in Kerala and Operation Barga in West Bengal. Tenancy
Reform benefited intermediate caste.
3. Land Ceiling
➢ Land Ceiling was very crucial for land distribution but land ceiling became one of the most
weakest aspects.
➢ Laws with loophole came into existence.
➢ People protected their land by dividing joint family, Benami transfer and even gave formal
divorce to the wife to protect land.
4. Distribution of Surplus Land
➢ Distribution of surplus land was the most important aspect of land Reform to
address poverty.
➢ One of the vision of land Reform was land to Tillers.
➢ However there is very limited distribution that has taken place
➢ Even government uptill now has not been able to distribute whatever they have
the acquired.
5. Consolidation of Land holding and establishment of Co-operative
➢ It was the next logical step. Even cooperative movement has been a failure.
➢ Whatever cooperative movement has come into existence have been restricted to
some areas. for eg. in Maharashtra it is not cooperative but Joint Stock Company
of Rich farmer.
• Since 1990s the type of developmental model India has adopted, has
adversely impacted even the interest of rich farmers.
• Agriculture has been worst affected by Liberalisation. Agricultural growth
has stagnated. Rural areas are suffering from the problem of Hunger and
malnutrition even when procured grain is getting rotten in Warehouses.
Causes of the failure
1. Lack of political will
2. The presence of dominant caste in congress
3. Lack of Organised Peasant Movement in the country.
4. Lack of Land records
5. Corruption
Views of scholars-
• Gunnar Myrdal calls India a Soft • Francis Frankel, the accommodative
State and that is a reason that even politics pursued by Indian state has
person like Nehru failed to achieve jeopardised the radical agenda.
success in Land Reform. • Sudipto Kaviraj and Pranab Bardhan
• Atul Kohli- state in India lacks both believe that State in India
political and organisational capacity expresses the interest of Bourgeoisie
to confront the power of Propertied classes. There has been
Class. He gives the example of Kerala unenthusiastic implementation
and West Bengal where land because of disproportionate
Reforms could be successful because influence of Propertied classes.
of the ideology of Political Party and • We can also apply the concept of
because the base of Communist over developed state given by
Party among poor. On the other Hamza Alavi in Indian context.
hand despite rhetoric Congress
continued to be the Party of
Dominant Class.
Suggestions-
1. The Importance of land Reform and any redistributive strategy have lost the
imagination. In contemporary times it appears an outdated approach. Hence
there is responsibility of intellectual class to bring the agenda of land reforms
in public sphere and matter of public reasoning.
2. It is the responsibility of civil society to organise peasants and landless
labourers to create pressure on government.
3. Government of India should start taking the issue seriously because failure of
Land Reforms, failure to address Rural Poverty and Hunger has resulted into
the Left Wing Extremism.
4. There is a need to strengthen legal machinery, address loopholes, maintain
land records, utilise NGOs for identification of beneficiaries.
5. Government must constitute Lok Adalat to dispose of the old disputes.
6. Prevent agricultural land transferred for not agricultural uses.
 GREEN REVOLUTION
• Purpose-
➢To make India self sufficient in the production of
food grains.
• Philosophy-
➢A production Centered approach based on the
philosophy of capitalism.
➢It resulted into the use of high yielding variety seeds,
fertilizers, pesticides, implements.
➢Thus it is capital intensive. It also caused intensive
use of land.
• Green revolution started in 1961 as Intensive
Agricultural Development Programme (IADP).
Initially 14 district were selected on
experimental basis and later on extended to
114 district in the form of Intensive Agricultural
Area Programme in 1965.
Outcomes-
• It made India self sufficient in food grain production.
• Since then there is a substantial increase in output, it is treated as a
Revolution.
• Agricultural grew at the rate of 3-5% per annum which was an encouraging
rate of growth considering colonial period.
• According to V.K.R.V. Rao, the gains of Green Revolution came at the
substantial Social and Political cost. It has increased the gap between Rich
and Poor. It has increased Rural indebtedness because small and marginal
farmer had to borrow to purchase implements and seeds.
• It has reversed the process of land reform. Small and marginal farmer
actually lost the land.
• According to economists like GS Bhalla and GK Chadha, Green Revolution
has increased the Agricultural Wages and total income by 4 times and has
strengthened the bargaining power of workers.
• On the other hand economist like Hansara, SS Grewal suggest that there
was no increase in the real wages, there was inflation in the rate of food
grains. There has been decline in living standards. Mechanization displaced
labour. It also resulted into the migrant labour. It started creating social
unrest. It destroyed traditional dependence between a farmer and
labourers.
• Rudolph and Rudolph- They have analysed the political effect of Green
revolution as it gave rise to Bullock capitalist, strengthened the role of
caste in Indian politics.
• Other scholars like T.K. Oommen, Utsa Patnaik, Pranab Bardhan, all focus
on the poor distributive aspect giving rise to frustration and unrest.
• Vandana Shiva in her book "Violence of Green Revolution" published in
1993 mentions about the negative impact on society as well as on nature.
• According to former President K R Narayanan, if we will neglect the task of
land reform, it will give rise to counter-revolution which has already started
in rural areas. Green Revolution should not end up giving rise to Red
Revolution.
Analyse the Political Economy of Growth and
Distributive Justice in India
1. India is a welfare state
2. Directive principles directs states to implement welfare of people
(Specially Article 39 b & c)
3. Indian state adopted the role of developmental state under Pt.
Nehru.
4. However India's achievement with respect to eradication of Poverty
and Human Development indicators has not been encouraging.
There is a lack of regional balance and inclusive growth.
5. Political scholars have analysed the politics of economic growth in
India.
Some of the prominent views can be
expressed as
a. Hamza Alavi - has suggested that postcolonial States negotiate on behalf of the
propertied classes.
i. Foreign Bourgeoisie
ii. Indigenous Bourgeoisie
iii. The Feudal Class
b. Gunnar Myrdal emphasize on poor capacity of India, call India as a Soft State.
c. Atul Kohli mentions the problem of the crisis of governability faced by Indian
state. Crisis of governability is a result of lack of stable alliances, poor capacity
and poor policies.
d. Francis Frankel suggest that Indian state peruses accommodative politics which
jeopardized its radical agenda.
e. Sudipto Kaviraj suggest that Indian state serves the interest of the Bourgeoisie
class.
Conclusion-
• Thus above analysis highlight the class character of Indian state and
lack of will and capacity.
• Rudolph & Rudolph calls Indian state as "Polymorphosis" like Hindu
God hence it keeps on balancing different sections of the society.