Socio-Cultural Constraints of Development

Socio-Cultural Constraints of Development

To this day a correct Hindu who has

dined with a European will disinfect

himself ...byuse of cow manure. No

correct Hindu will bypass a urinating

cow without putting his hand into the

stream and wetting forehead, gar­

ments, etc. with it as does the Catholic

with holy water.

—Weber ([1921] 1958, 28)

These two fascinating sentences could be parsed and deconstructed with endless delight, but here they serve merely to begin our rendezvous with Max Weber. Weber’s study of re­ligion in India is much less fre­quently read or mentioned than his classic treatise connecting the ap­pearance of the Protestant denomi­nations with the early economic ad­vancement of Great Britain, the Low Countries, and the other regions of Europe that led off the Commercial Revolution. The linking variables were a strong work ethic, frugality, and the belief that economic success exhibited that one was in line to be “called” to heaven for doing God’s work. Weber thought this conjunc­tion of traits harmonized with an in­dividualistic, rational, cause-and­effect outlook. As translated, The Re­ligion of India runs to around 350 pages, only a tiny fraction of which are devoted to explicit comments about the effects of the Hindu con­ventions of thought on economic be­havior. Weber dismissed South Asia’s other religious traditions as being offshoots of the Hindu stem or so suf­ficiently assimilated into the Hindu mode that no distinctions needed to be drawn. A peculiarity is his fre­quent reference to the “orgiastic” di­mension of Hindu worship, epito­mized in the Shiva lingam, and he appeared to believe that wild sexual license was a common part of the reli­gion’s rituals.

Time has not treated kindly Weber’s assessment of Hindu beliefs and practices and their influence on India’s material progress. However plausible and methodologically inno­vative was The Protestant Ethic,it is difficult to conceive that informed readers have ever found The Religion of India accurate and convincing. If we may assume that the translation accurately renders into English the tone as well as the content of Weber’s writing, then his withering disdain for everything he believed he had learned about the life of the peoples of the subcontinent is the volume’s most evident feature. The book reca­pitulates exhaustively India’s reli­gious writings and derivative dissec­tions by Western interpreters. Compared to the anthropological lit­erature that emerged after World War II, Weber’s depiction of India is a lifeless rendering of putative doc­trine, much of it drawn from arid Brahmanic perspectives. Weber is quite blunt that he is drawing conclu­sions from his textual examination of economic aims and behavior, not re­porting observed conduct.He writes,

We are now in a position to enquire into the effects of the caste system on the economy. These effects were essentially negative and must rather be inferred than inductively assessed. Hence we can but phrase a few generalizations. Our sole point is that this order by its nature is completely traditionalistic and anti-rational in its effects.(Weber [1921] 1958, 111)

In the most derisive contrast Weber draws between the Protestant and Hindu ethics, he writes,

In addition to the ritualistic and tradi­tional inner relation anchored through the caste order to the samsara and karma teaching..., there also appeared the reli­gious anthropolatry of the Hindu laity against the naturally strong, traditionalistic, charismatic clergy of the gurus. These hindered the rationaliza­tion of life conduct throughout. It is quite evident that no community dominated by inner powers of this sort could out of its own substance arrive at the “spirit of cap­italism.” (Weber [1921] 1958, 325)

Not content with this sweeping dep­recation, Weber proceeds to say that India is incapable of taking over capi­talism as an “artifact” as the Japa­nese did. He adds dismissively that should the “thin conquering strata” of the Europeans vanish, South Asia would relapse into “the old feudal robber romanticism of the Indian Middle Ages” (Weber [1921] 1958, 325).

Weber certainly overstated the rigidities implicit in the impact of the Hindu ethic on labor stratification, as embodied in the caste system and as reinforced by the Brahmanic doc­trines of pollution, karma, dharma, and samsara. Further, because of his reliance on scriptures rather than observation and field inquiry, he could not appreciate the many diverse forms of caste, belief, and worship across the whole range of the subcontinent’s villages and families. As Harold A. Gould and others have recognized, caste is a multifaceted phenomenon, with sacred, ritualistic, ethnic, and economic dimensions that may vary independently (Gould 1988). The interplay between caste and economic change in the modern world is complex: “Viewed in histori­cal perspective, one sees that the capacity of castes to employ their pri­mordial characteristics for ethnically integrated cooperative action in the modern economy and polity has itself provided the impetus for major modi­fications in the internal structure” (14-15).

The wide-gauge Weberian critique of South Asian religion and institu­tions has recent parallel partners. K. William Kapp’s Hindu Culture, Eco­nomic Development, and Economic Planning in India (1963) is represen­tative of post-independence pessi­mism. Although capital formation and skilled labor were critical vari­ables, Kapp remarks that “it can hardly be doubted” that Hindu cul­ture slowed economic growth, citing “non-secular and pre-technological institutions and values such as the hierarchically organized caste sys­tem, the limited or static levels of aspirations, moral aloofness, casteism and factionalism—to name only a few of the major barriers” (64-65). Kapp’s rendering of South Asian institutions and his assertion of their negative impact on develop­ment are in retrospect mechanical and deterministic and wholly fail to capture the dynamism set in train by the early years of planning.

Gunnar Myrdal undertook a mammoth survey of South Asia’s development prospects in the three-volume Asian Drama (1968). Seeking to balance economic and social analysis, Myrdal found reli­gion and social values to be obstruc­tive of developmental gains. The Asian Drama is pervaded by Ibsenesque gloom. Perhaps without fully realizing it, Myrdal was thrown off balance by the disorder and squa­lor of the subcontinent compared to the placidity and tidiness of Scandi­navia. His most remembered neolo­gism arose from his disappointment with the Indian version of democratic socialism and with the performances of the other governments of the sub­continent, which spurred him to label the region’s polities “soft states.” As did Weber and Kapp, Myrdal erred in permitting a stylized depiction of South Asian culture to dominate his assessment of the potential for strong economic performance whether arising from state-managed collective accomplishment or from spontaneous individual achievements.

Myrdal moved down the well-trod path of castigating Hinduism for its mystical, nonrational character. Only a change in values would suffice to permit institutional reform and economic modernization via state planning; inescapably, South Asians would have to absorb the following virtues: efficiency, diligence, orderli­ness, punctuality, frugality, scrupu­lous honesty, energetic enterprise, a willingness to take the long view (Myrdal 1968, 1:61-62), although each is “alien to the region” (1:73). Myrdal attacked the plethora of sacred cows (1:89), the South Asian fascination with astrology and horo­scopes, and laborers’ conformity to the backward-bending supply curve (3:1872). The Asian Drama was a strange and dated study when it appeared and is only more so from the contemporary vantage point.

Weber’s pessimism about South Asia’s potential for the pursuit of eco­nomic advantage rested on twin pil­lars. The first was the nonrational character of Hindu thought and its antimaterialist spirituality, and the second was the “social expression” of the Hindu ethic, especially in the form of the caste hierarchy. Let us set aside the motivational component for later treatment and examine here several formulations of the caste-as­rub proposition. Weber understood the layers of caste in the bookish terms that defined the four varnas: Brahmans, Kshatriyas, Vaisyas, and Sudras, or Priests, Warriors, Mer­chants, and Workers, the latter including farmers and craftspeople. A fifth stratum, the Untouchables, was made up of castes, such as the Leatherworkers, whose occupations brought them into contact with pol­luting materials, and tribals who were not fully assimilated into Hindu society. The broad conjecture that the hierarchical Hindu caste system must stultify social mobility and eco­nomic achievement has fueled an important component of the culture-economy squabble. To anticipate the conclusion to the ensuing review of the most interesting features of the caste-mobility discussions, what we will find is that a strict either-or posi­tion is not tenable. It turns out that a middle way, based on solid social sci­ence investigation, leads to the dis­covery of which aspects of caste mat­ter in South Asia’s economic affairs and where lie the main lines of connection.

From the 1950s on, anthropolo­gists, sociologists, and economists have conducted countless studies of castes in South Asia. Many have looked closely at the economic dimen­sions of the caste system. The result is a much clearer and sharper focus on culture-economy relationships, and, with allowance for lingering small differences of opinion, there now exists a consensus about the main patterns. On an illustrative basis, we can look at two clusters of well-known studies of the Indian case. The first concerns the relation­ship between the caste structure and the village economy; the second con­siders the continuing implications of caste for the modern labor force. The chief conclusion is that caste was and remains a highly influential force in shaping labor relations in India’s villages and urban workplaces, although, contrary to Weber or Kapp, the effects of caste do not weigh nega­tively in any direct way on aggregate measures of economic change and growth.

Although the notion of varna serves as a rough means of defining India’s social strata, the operational unit of the caste system is the jati.A jati is an endogamous grouping of families, so it follows that an infant is born with an indelible jati identity; and, logically, parents and elders must ensure that the boundaries of the jati are preserved, making arranged marriages a necessary complement. Jatis are known by occupational labels such as Washer-men, Barbers, Goldsmiths, Potters, Herdsmen, Distillers, or Priests. In the villages, configurations of these jatis constitute the division of labor, along with Peasants or Landowners (for example, Epstein 1962). William Wiser (1936) used the term “jajmani system” to summarize the networks of exchange, mostly in labor and kind, that linked the food-producing Peasant families with the artisan and service families. Much detailed work has shown that there has never been a strict one-to-one correspon­dence of jati occupation and village families’ actual work (for example, Leaf 1984). Many families may own land or have tenancy rights to small plots, and many families may provide farm labor, although most landless workers are from the lowest caste and Untouchable households. Despite these ambiguities and fluidities, the imprint of caste on the rural division of labor is undeniable and continues forcefully down to the present.

A jati’s rank in the social hierar­chy of the village derives from three vectors. The first is the degree to which the jati’s occupation is ritually demeaning or polluting. Washermen are polluted by their handling of soiled clothing and menstrual cloths.

Leatherworkers are polluted by deal­ing with dead animals and processing hides. Ironsmiths are not much stigmatized by their work. The second is the wealth in land held by the jati’s families and to a lesser extent its holdings of livestock or other assets. The third criterion is the jati’s political clout, which derives from its numbers, cohesion, and leadership. As David Mandelbaum (1970) has explained in full detail in his synthesis of the apposite literature, mobility in Indian society is feasible and avidly pursued, but it is a mobility of unified and successful jatis, not a mobility of individuals or isolated families. Fur­ther, Mandelbaum is explicit about the robust connection between the quest for social advancement and economic gains. He writes,“The drive for collective mobility is of surpass­ing concern to many villagers because they believe that greater power and material rewards are won by those who gain higher rank” (429).

Does jati mobility actually occur in concert with changes in subcastes’ relative economic positions, or is this only a theoretical potentiality? F. G. Bailey (1957) wrote one of the first and still one of the best accounts of jati mobility growing out of advan­tages presented by economic change. In an Orissan village, Bisipara, the status of families and jatis was revised by the degree to which they successfully responded to opportuni­ties presented by British rule and the spread of commerce. Bailey reports, “The biggest gains went to the Dis­tiller caste-groups, who profited from a monopoly arising out of caste-beliefs and Government support” (173). Today, Bailey’s example can be multiplied manyfold. Jatis in India continue to joust for social position, political heft, and economic gain. As important as rising is holding the lower jatis down. Not surprisingly, because material benefits are at stake, such conflict often becomes testy and violent. In urban areas, individual accomplishment outside of jati membership is now more feasi­ble, but it would be an error of the first order to think that personal achievement had displaced jati ascription and collective mobility. The bottom line is that although social mobility takes a different form in India from its form in the United States, material gain is both an instrument and a consequence of the pursuit of status.

Weber ([1921] 1958) remarks that subcastes acting “like quasi-trade unions, facilitate the legitimate defense of both internal and external interests” (33). Others have empha­sized the guild-like nature of the occupational quasi-monopolies enjoyed by jatis. Thomas Beidelman (1959) criticized Wiser’s sentiment that the jajmani system involved more or less persistent and agreeable terms of exchange among the landed, craft, and service subcastes, on the grounds that Wiser had underesti­mated the use of force to maintain a pattern of unequal transfers between the landed families and their retain­ers. The capacity of the service fami­lies to boycott the landed families was rarely converted into a winning hand in disputes over payments, and the latter usually emerged victori­ous.In fact,this was such a likely out­come that there were many fewer overt breaches of the order of life than one would expect, given the extremes of social and economic inequality that typically prevailed in a village. There can be scant doubt that the doctrines of dharma and karma acclimatized the lower orders to an acceptance of their lot in life, but Hinduism is hardly alone among religions in supporting social stability.

Neither Beidelman nor Wiser argued that the degree of occupa­tional monopoly sustained by the principles of caste and the jajmani system exercised a chronic restraint on economic change or growth. To the contrary, as with Bailey’s Distillers, they perceived that it was the quick­ness and effectiveness of jati reac­tions to changing commercial and employment opportunities that injected new dynamisms into the never ending pursuit of relative mobility. Indeed, we may go further and recognize that families and jatis in modern India go to great lengths to raise their schooling levels by send­ing able children upward in the edu­cational system. Jati networks are important avenues of job information and search. Regional caste associa­tions have been instrumental in founding many institutions of higher education, much as religious denomi­nations in the United States have sponsored colleges and universities. From the inside, in other words, a jati is perceived as an alliance that pro­vides resources and strength for its member families in competing with rivals.

In his comparative study of nations’ historical growth trajecto­ries,Mancur Olson (1982) reverted to a position very close to Weber’s. Olson used his theory of collective action to argue that village jatis acted as multigenerational “distrib­utive coalitions” in seeking to extract the greatest economic gains from their occupational monopolies (157). The struggle between subcastes to maintain or advance their positions and interests meant that fewer col­lective resources were available for private or public investment, so that India’s economic growth wavered for many centuries around zero. Although this précis oversimplifies Olson’s logic, his thesis depends cru­cially on, first, whether jatis were the strong labor unions he imagines and, second, whether they would and could successfully compete for pieces of the village economic pie. As has been depicted, the pairing of a jati’s occupational label and the types of work its member families actually performed has always been weaker than implied in strictly limned images. Further, most artisan groups in a given village were too small in number or too poorly organized to confront even moderately cohesive Peasant lineages. As intriguing as Olson’s postulate is, inter-jati eco­nomic rivalry was sufficiently lim­ited in scale that it should not be allo­cated much if any role in India’s long-term economic stasis. Moreover, most intra-village conflict takes the form of faction rivalry in which alliances of Peasant households with their client and laborer retain­ers vie with similar cross-jati assemblages.

One of the shibboleths of colonial thought was the conviction that non-European workers were indolent. Put more analytically, their conduct was expected to violate the norm of the upward-and right-ward-sloping supply curve of labor. Instead of offering more labor indi­vidually or collectively at higher wages, indigenous workers aimed at target incomes and worked less, the resulting function being a back-ward-bending supply curve of effort. Weber ([1921] 1958) says it nicely: “An increase in wage rate does not mean for them an incentive for more work or for a higher standard of liv­ing, but the reverse. They then take longer holidays because they can afford to do so,or their wives decorate themselves with ornaments” (14). From at least the middle of the nine­teenth century onward, the expan­sion of public works, government, banking, the railways, and manufac­turing enterprise has generated demands for workers. Obviously, many of the skills and occupations were new to South Asia. The key question is, Have attitudes toward labor effort and reward, or the caste system, blocked or skewed the provi­sion of workers into new occupations in a manner that has retarded eco­nomic growth and development?

There is general agreement that the recruitment of an Indian labor force into new tasks as the economy has changed over the past two centu­ries has not been a sluggish or costly process. One can point to a few cases, such as the early Assam tea estates, where solicitation of labor was diffi­cult except from the poorest areas of Bihar. Even in this instance, the iso­lation of the plantations, the high mortality rate in transit and in situ, and the onerous terms of contractual bondage are better explanations than any intrinsic unwillingness to move to superior work. The construc­tion of the Indian railways from the 1850s onward drew heavily on local workers, and the rail companies’ ever expanding numbers of operations personnel were overwhelmingly composed of Indians and Anglo-Indi­ans. The decennial Indian censuses (from 1871 onward) provide ample evidence of a changing labor force structure marching in step with the evolution of the Indian economy. Morris D. Morris (1965) wrote a benchmark study of the recruitment of labor into the Bombay cotton tex­tile industry, finding little friction in the creation of a committed, produc­tive workforce. Parenthetically, too, we may credit Morris (1967) with an effective rebuttal of Weber’s expres­sion of the Hindu ethic’s debilitating economic impacts. Morris’s insis­tence on explaining the pace and dis­tribution of economic development by primary reliance on conventional grounds, such as regional advan­tages, resource abundance, transpor­tation costs, and the allocation of credit, was a salutary remedy for overreaching and speculative theses of social determination.

Representative of modern studies, Marc Holmström’s (1984) scrutiny of the formal and informal sectors finds abundant contrivance and agility in reaping rewards from changing employment chances. This is not to say that there are no quirks or anom­alies in the Indian labor market. A very common presence is that of the sirdar or mukadum, a labor factor or intermediary. Often a leading figure in a village or jati, this middleman is responsible for recruiting migrant or permanent labor for a particular activity, such as sugarcane cutting or work in a factory or on a construction site in Mumbai or Delhi. The factor is responsible for the mobilization and transport of his recruits and may be involved in small loans against pay. He works through net­works in the caste or village and, on the one side, keeps his workers happy and, on the other, relieves the farmer or foreman of many responsi­bilities for managing workers and dealing with their commonplace human needs.

There is no evidence that Indian workers have been unresponsive to labor market signals, which is scarcely surprising in view of the sea­sonality of agrarian labor or the very low returns that prevail in many rural occupations. Traditional skills and a modicum of formal education sufficed until accessible modern edu­cational institutions were created after independence. Brahmans cleaved easily to posts in the British colonial regime, and many made the transition into the cadres of the post-independence civil services. The Indian army has absorbed and trained generations of sepoys, often drawing them from the same fami­lies and regions. At any point, though, when we align the caste structure of the modern labor force, we see a very strong tendency for rep­lication of the caste hierarchy. Brah­mans keep the books, Warrior and farmer castes enter the army, arti­sans are on the assembly lines, and Sweepers clean the shop floors and toilets.

Differential caste access to educa­tion and the absence, surprising in India’s liberal democracy, of any con­stitutional or binding legislative commitment to universal education and literacy have permitted the pro­jection of the traditional caste ladder onto the contemporary workforce. Given the aforementioned delinea­tion of the intensity of jati rivalry for social and economic positioning, it should not be astonishing that much of modern Indian politics revolves around populist candidates pledging to widen the access of lower caste groups to reserved school seats and public sector jobs and the counter­vailing hostility of the high castes to such public favoritism.India’s consti­tution contains lists, or schedules, of tribes and subcastes that are the des­ignated beneficiaries of affirmative action programs. In consequence, there is more competition at the national and state levels to join the public rosters of scheduled castes and scheduled tribes than there is to escape the designation.

In summary, religious values or attitudes have little or no impact on work habits or the work ethic in the Indian scene. The caste system does matter in significant fashion, not by inhibiting labor force availability so much as by imposing discriminatory barriers to jobs and educational openings. The sheer abundance, energy, and skills of India’s massive workforce ensure that labor demands are rather easily satisfied for the moment. There is a rub of cul­ture operating in India’s labor mar­kets, imposing high current political costs stemming from intrinsic unfairness. The failure to make full and nondiscriminatory use of all the nation’s workers’ innate industry and intelligence constitutes a poten­tial drag on the economy as it moves closer to full employment, but the play of majoritarian politics and the existing awareness of the political and economic risks of countenancing inequality in perpetuity will not let this happen. 

Seminar Topics for Studetns

Seminar Topics for MDA 4^th Yr Students for the Course Development Sociology

1.       R. Sathiya –Demographic Factors in Development

2.       N.Uma – Village Development in India – Micro & Macro Linkages

3.       S. Mohanalakshmi – Role of NGOs

4.       M. Chellammal – Relationship of Population with Development

5.       M. Sharmila – Village Development in India (Economic Development)

6.       A.Seetha- Role of Panchayat in Rural Development

7.       Uma. K – Development Planning and Socio - Cultural Context

8.       P. Thiyagu- Social Welfare Programmes for SC/ST

9.       Bala. P – Small Farmers and Marginal Farmers

10.   Aravinthan. S – Women and Children Development

11.   Ashok Jacob Mathew – Sustainable Development

12.   M. Kaliaperumal – Role of Sociologist I National Development

13.   T. Samiappan – Directed Social Change in India

14.   M. Daniel Easter Raj – Social Planning

15.   P. Diraviam – Imperatives of Sociology in Development Planning

16.   Anantha Krishnan – Indian Development Experience

17.   Vishnu – Micro Level Planning

18.   Naresh – CBOs Role in Development

19.   A.Simon – NGO Strategies and Intervention Models of Development

20.   Gandhimathi – Participatory Social Development – PLA & PRA

Development Strategy - Five Year Plans

Development Strategies

Five Year Plans

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.

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 solved by the same methods as have proved efficacious in countries like the United States of America, Japan and Canada and latterly with startling success in Soviet Russia…India cannot prosper except through rapid industrialisation… industrialisation has to be organised, planned and worked for…India may be an industrially developed country or it may be a market for manufactured goods from outside and not both.” Keynes had shown that the days of Laissez faire were over and that the State could play a positive role even in a capitalistic country through meaningful fiscal intervention, particularly on expenditure side. 

Towards the end of the War, respecting the sentiments of industry and other sections, the Government of India established a Department of Planning and Development in 1944. The Department stimulated the preparation of post-war reconstruction plans by different departments of the Central Government, provincial Governments and larger princely states. It also sought plans for development from industry and labour. Three plans were submitted to it for consideration, all in 1944: viz., Bombay Plan, People’s Plan and Gandhian Plan. Sectoral plans for education and health were also prepared by the Government of India.

Meaning of Economic Planning

Planning is resorted to by individuals, by organisations, by firms, by farmers, and by nations so that a well-thought out set of actions could be carried out in future for securing a particular objective or a set of objectives. Planning is the anti-thesis of purposeless drift. It is a deliberate choice of action. It is about consciously organising human activity.

Planning is a conscious design for shaping the socio-economic processes with a view to achieving an objective or a multiplicity of objectives; it is a path of action in terms of policy measures to be followed in future in pursuance of pre determined goals. It needs to be emphasised that goals have to be mutually consistent and proper planning should ensure that means and measures are also consistent. It has to be noted that means are autonomous in the sense they are selected by the planners. But there exists a fundamental restriction on selection of means, which is the requirement of mutual consistency.

Since uncoordinated market processes cannot be fully trusted to pursue the objectives the State sets out for its people, it was suggested in many quarters that economic planning should be resorted to by the State. Economic planning is thus concerned with pursuance of economic development, with economic well-being in mind, through all means at the hands of the State, including persuasive ones. We, in India, are, however, concerned with planning of economic and social development. Naturally goals and means of this planning are somewhat different.

Since the word ‘planning’ had acquired economic overtones by the time our country thought of planning, we stated in very clear terms, right in the beginning, that our planning would cover both economic and social spheres. Economic sphere refers to agriculture, industry, transportation, etc. while social sphere refers to education, health, shelter, etc. The nature of work in the economic sphere includes the development of irrigation, dams, mining, forestry, rail, roads, warehousing, etc. whereas the development of schools, colleges, universities, hospitals, dispensaries, health centres, family planning centres, broadcasting, etc. are included in the social sphere. You may see many works in economic sphere have something to do with the ‘social’ and vice versa. There may be sectors which may be as much social as economic.

Therefore, division of heads as social and economic is a proposition of convenience rather than a proposition of principle. Since we cover almost all activities which by choice we seek to develop, we call it comprehensive development planning.

We do spend a lot in modernising our armed forces, equipping law and order machinery, improving judicial system, and in bettering other state organs but we do so in the interest of running the system smoothly or we feel compelled to do so. We, therefore, do not call them either developmental activities or designate them as economic or social activities, though all of them are almost exclusively taken care of by the State.

While covering many social and economic activities, the State may choose just to advise and coordinate, encourage and discourage through indirect fiscal and financial mechanisms and through enacting laws. It may choose to produce and distribute all goods and services. India chose to use a (judicious) mix of direct and indirect means: enacting laws for distributing/ allocating agricultural and non-agricultural land to different sections of people or different activities; restricting, banning or proscribing certain activities; opening special financial institutions and manipulating interest rates and/or credit limits for different categories of activities; making fiscal provisions for taxing or subsidising certain activities in certain areas; undertaking production/distribution as a supplementary mechanism with a certain social objectives in view; and undertaking production and distribution of certain goods and services (natural monopolies). Engagement of direct production and distribution through a Ministry of Union or State Government or through an agency of the Government is considered an activity in public sector. We have seen that undertakings in public sector have assumed a significant proportion in total manufacturing, processing and financing activities. In fact, we gave a significant role to public sector and allowed it to have comman ding heights.

Five Year Plans

The Planning Commission was constituted on 15 March 1950 by a resolution of the Union Cabinet. The Commission was asked to prepare a blueprint of the First Five Year Plan at the earliest, so as to implement it in April 1951. The Commission submitted the Draft Outline, which was meant to arouse a lively debate in the country among different sections and interests with the belief that planning in a democratic state is a social rather than just a technical matter. It is significant that it was in this Draft Outline that the formation of the National Development Council was suggested, which was constituted by a resolution of the Cabinet on 6 August 1952.

It is, however, said that the First Plan stitched together projects, which were already on shelf of different departments of the Government of India. The final report, called First Five Year Plan, came only in December 1952 after 21 months since the formal beginning of the Plan.

Every five year plan is set in a perspective of a longer period. In fact, every five year plan document contains the plan for the quinquennium proper (medium-term plan) and a perspective plan, in which the plan proper is set. Though we have been facing a few crises, now and then, we had first three five year plans uninterrupted. Towards the end of the Third Five Year Plan, we faced a war with Pakistan in late 1965 and two consecutive bad years for agriculture 1965-66 and 1966-67 and foreign exchange crisis leading to devaluation of rupee. The Fourth Five Year Plan, prepared for 1966-1971, was therefore withdrawn after its launch. A view was taken that the Fourth Plan should be launched when normalcy returns back. The Fourth Five Year Plan was, then, prepared for 1969-74 and executed. In the interregnum, three Annual Plans were implemented. During the Fifth Plan period (1974-79), certain political developments took place: internal emergency was clamped, new elections took place, and newly constituted Janata Party won the elections. The new Government decided to cut the running (Fifth) Plan short by a year (1978-79). A new Five Year Plan 1978-83 was launched. However, political develop ments forced its abandonment in 1980 when the new Government, again the Congress, came in power. A new Sixth Five Year Plan was launched for 1980 -85. The year of 1978-79 is now included in the Fifth Plan, as was originally envisaged, and the year of 1979-80 is treated as an Annual Plan in most compilations including those by the Planning Commission. The Seventh Plan went uninterrupted. Again there were unstable political developments, short-life Governments, assassination of Rajiv Gandhi, and economic crisis related with precarious shortage of foreign exchange. The Eighth Five Year Plan was, therefore, launched after return of normalcy in 1992. Though the Governments changed midway, the plan was not abandoned or cut short. We are now through the Tenth Five Year Plan. The duration details of all plans, which were formulated, along with their perspective plans are provided in an appendix.

Main Objectives

Planning is a means, an effective means, to achieving something. It has to have certain objectives. State planning, in a democracy, cannot have any other objectives but the ones that are given in the Constitution. If an institution is made in-charge of the planning economic and social development of the country, it can at best delimit its scope and be more specific.

The purpose of planning is to accelerate the process of development and keep it on track. India suffered for long a slow growth, if not stagnation. So, we wanted high growth. Indian workforce is also affected by underemployment, if not open unemployment. So there is a need to increase the employment opportunities. We thought maximum production would create more opportunities — enough to absorb everybody. So, we wanted maximum production (growth) and full employment. The Indian society suffered from inequity/inequality. So, we opted for reduction in inequality of income and wealth. Perhaps, realising the contradictions inherent in simultaneously achieving all these objectives, the Report of the First Plan said, ‘None of these objectives can be pursued to the exclusion of others, a plan of development must place balanced emphasis on all of these’.

Objectives can be divided as long-term and medium-term/short-term. Long term objectives do not much differ from plan to plan but short-term objectives may differ quite a bit. Long-term objectives are couched in more general terms while short-term ones are more specific. All plans, for example, set a target of growth rate but some of them wrote it under the heading of objectives while others did not. Other plans mixed up long-term objectives with short term ones. Still others mixed up the objectives with instruments. The Second and Third Plans, in particular, dwelt a great deal on creation of socialistic pattern of society. Later plans did not distinguish between objectives, targets and instruments.

We can call, if we so wish, long-term objectives as the planning objectives and short-term ones as the objectives of a particular plan. Long-term plan objectives/ development objectives continue, for all fifty years:

1              To increase production to the maximum possible extent so as to achieve higher level of national and per capita income.

2              To achieve full employment.

3              To reduce inequalities of income and wealth and concentration of economic power.

These may be considered as main objectives. While some authors add to this list the objective of self-reliance or self-sufficiency in foodgrains, others include expansion of basic and heavy industries as an objective. Some assign to planning, the task of establishing socialistic pattern of society, free from exploitation. Still others point to the need of balanced regional development. Some consider that containing inflation and improving balance of payments deserves specific mention. There is truth in all these assertions; it is a matter of picking up significant ones according to one’s own judgement based on the particular plan document.

It may be mentioned in passing that, according to some, planning is about dismantling the existing structure and re assembling constituents in an altogether the different, new and desirable manner.

Main Features of Economic Policy

There is a lot of confusion in the use of words ‘policy’ and ‘strategy’ in writing. If one adheres to dictionary meanings, one would define ‘policy’ as a coordinated plan of action from a set of alternatives while strategy provides maximum support to the chosen policy. First major plank of the policy to be followed was that the country, though under planning, would pursue a policy of mixed economy. Mixed economy, as the term suggests, signifies the co-existence of public sector and private sector with respect to business enterprises--industrial, commercial and financial. Beyond co-existence, the understanding is that while public sector enterprises shall primarily be guided by public interest/good, private sector enterprises will not be solely guided by profit consideration. They shall not assume antagonistic posture but shall cooperate in the endeavour to boost the economic potential of the country.

During the first forty years we cannot claim to have followed one single policy; in fact, we find, it had been evolving. But there are some common features: expansion of public sector, industrialisa tion and import substitution, self-sufficiency in foodgrains, state control on financial resources, control on foreign capital, protection of small scale industries, regulation of large scale industry, curb on monopolistic practices, provision of public health measures and spread of education and literacy. However, the dominant features that deserve special mention may be listed as: interventionist state, centralised planning, expansion of public sector, development of heavy industries, emphasis on import substitution. We may note that the last three are all in the industrial area. Interventionist State: State will intervene in the market processes so that it secures adequate livelihood for the poor and brings down disparity among classes. It will make laws whereby intermediary interests in land are abolished and concentration of wealth is prevented. It will create institutions, which will promote agriculture, industry and trade. It will adopt fiscal policy, which would promote growth and social justice. It will have monetary policy to make adequate funds available to the industries, which are essential for the economy. It would not allow free flow of foreign capital investment and will direct its use, in case it allows foreign investment to come. Keeping different interests in mind it will determine the ownership, scale, and use of funds allocation of critical inputs, including foreign exchange, under its control.  

Centralised Planning: States will promote centralised planning so that interests of different regions and different sections are promoted. Sub-national plans would be dovetailed/integrated with the national plan. It had to be basically formulated at the level of the national Planning Commission. Even till date, while there are state level (provincial) planning commissions in existence, there are no independent State plans. Planning in our country is quite centralised. Expansion of Public Sector : Role of the State particularly in relation to the industries was debated in the thirties itself. While there was unanimity in the National Planning Committee that defence industries should be owned and controlled by the State, it was suggested in the case of other key industries even a control of the State would be sufficient. Much before we thought of formulating a plan, an Industrial Policy (Resolution, 1948) was already in place, which delimited the scope of public ownership of certain industries.

We may note that at the time of Independence, except the railways, there was nothing spectacular in economic sphere, which could be said to be in the public sector. Industrial Policy Resolution, 1956 clearly stated that ‘the State will progressively assume predominance and direct responsibility for setting up new industrial under takings and for developing transport facilities’. It was widely believed that the private sector would be interested in quick-yielding industries, which would give the owners large profits in a short time as well as industries which are less risky and have short gestation period. Moreover, the indigenous private sector did not have adequate capital either. In order to initiate and accelerate the process of development, large-scale investment was needed in basic and key industries and in infrastructure. Public sector was assigned to undertake this role. In short, the basic strategy was that the public sector assumes the responsibility of developing heavy and basic industries (steel, fuel and power, machine-building and chemical industries) and social and economic infrastructure (such as banks and other financial institutions, railways and airways, power, etc.) while the private sector is given the right to develop consumer goods industries and trade -almost the whole of internal trade and most of external trade, besides agriculture, livestock, plantation and fishing, etc. As public sector through its undertakings, belonging to the Union and the State Governments both, was supposed to give a lead to the private sector, it was supposed/ expected to have the position of commanding heights. Development of Heavy Industries : One may recall that almost all ‘plans’ formulated before Independence, with differing emphasis, had suggested that planned development of Indian economy should ensure that heavy engineering and machine-making industries, universal intermediaries like electricity, basic industries such as cement, heavy chemicals including fertilisers, metallurgy like iron and steel, aluminium and manganese, must be accorded a priority. It was understood that much of industrial development of India got hampered because of absence of basic and heavy industries. Since the formulation of the Second Plan began, it was increasingly suggested that we should cease to be exporters of primary produce and importers of machinery and should develop our own machine-making capability. Import Substitution : Under the policy, imported goods and machinery will have to be substituted with those produced within the country. We should indigenously produce both capital goods and consumer goods. If development of some of these industries require protection from foreign goods for some time, then we should provide it. It will save us from pressure for export on the one hand and unnecessary borrowing on the other.

Main Achievements and Failures

Even though all achievements could not be attributed to the strategies adopted nor could it be said that the strategies did not change mid-way, it is a good idea to recount what we achieved in the forty years since planning. In fact, to say that we achieved this and failed in that, is rather difficult. The position cannot be seen as only black or only white. We can at best, say that we achieved certain objectives, to some extent, while we could not achieve others fully. And we cannot attribute success or failure wholly to the policy of planning.

We refer, for this purpose, first to our long-term basic objectives of maximum production, full employment, reduction in inequality in income and wealth, and concentration of economic power. We, then, refer to some other areas too, which are more or less elaborations of these objectives. Maximum Production : During the first three decades of planning, we did not achieve a rate of growth beyond 3.5 per cent per annum on a long run basis and never met the targets set for a particular plan, which were normally more than 5 per cent per annum. It is difficult to assert that we did not fully exploit the potential or to say that our targets were realistic or reasonable. For example, for the First Plan we had set a very low target (1.8 per cent per annum) for rate of growth and achieved twice of it thanks to good monsoon (This growth owes to un planned quarters). During the Second Plan we did better on growth front than during the First Plan but we were unhappy as we could achieve only 4.0

4.2 per cent per annum while the original target being 5.0 per cent per annum. During the Third Plan period, we achieved only annual average growth rate of 2.4 per cent against the target of 5.0 per cent. Again, this is due to the wars with China in 1962 and with Pakistan in 1965 and the failure of monsoon in 1965-66. From the mid-seventies onwards, and definitely after 1979-80, one finds that the growth trajectory of the Indian economy got shifted from the path of 3.5 per cent per annum to the path of

5.5 per cent per annum.

On the whole, our rate of growth over the long stretch of 40 years was around 4 per cent per annum. Taking the rate of growth of population as 2 per cent per annum, our per capita income could be said to have risen by 2 per cent per annum. Thus, on an average, the people around 1990 were living twice better in comparison to their parents in their age in the wee hour of Independence.

Perhaps more important is to know what was it that grew at whatever rate it did? If people are hungry, we ought to know whether we grew enough food. In 1951, we had in net terms less than 50 million tonnes of foodgrains, including all cereals and pulses. Around the close of 1980s, we produced as much as 150 million tonnes. In 1951, we imported around 5 million tonnes to feed ourselves. Normally the situation was not that bad; our imports only improved food availability. While in early fifties, we had less than 400 grams of foodgrains per person, by 1990, thanks to the continued rise in domestic production over time, the per person availability rose to nearly 500 grams. This simply means that our production in foodgrains grew at much faster pace than our population.

However, we should remember that we faced very bad days in the mid-sixties when we had to import more than 10 million tonnes and we received food aid from other countries, chiefly the US. The US once threatened to monitor food-aid on monthly basis. This forced us to usher in green revolution in the late sixties, a term for use of high-yielding variety seeds, intensive irrigation, chemical fertilisers, pesticides, etc. Thanks to its success our imports of foodgrains have been nominal. We even exported, on net basis, though at nominal scale.

As far as other items of mass consumption are concerned, during these forty years under review, we improved our per capita consumption of many items such as edible oils and vanaspati, sugar, clothing, milk, eggs, fish and tea and of electricity. However, except foodgrains, we were behind our targets and are behind many other developing countries. We needed to improve further.

Production should be limited by one of the following factors: shortage of capacity or deficiency of demand. Unfortunately in many sectors we faced neither. Is it a failure of implementation or fault in design? Most people say

Full Employment : In our economy, with minor variations, between one-third to two-fifths of people are working. Majority of them are self-employed, though over time, their proportion has been declining even during this period--say from over 70 per cent to around 55 per cent. Most of them are farmers or cultivators but there are such people in urban areas working in informal sector. The rest of them are wage labourers. Some of them get regular salary and others are casually employed. Even among the regular salaried there may be workers on farms with low wages. They may be working in factory, shop or home. Many employers will be working shoulder to shoulder with their employees, numbering in one or two. While the proportion of those getting regular salary has also fallen somewhat, the proportion of casually employed has been swelling. The proportion of casually employed in late eighties was about 30 per cent. Most commentators do not take these developments kindly. Obviously, in their view, regular wages even if somewhat lower are better than casual wages even if they are high. Employment for full time at reasonable wages ensuring income sufficient for two-three persons dependent on the worker should be the minimum norm.

What should we expect when somebody claims that there exists a situation of full employment? All those who are aged between 15 – 60 are to be employed. If they are wage employed, they should get adequate wages and if they are self-employed, they should get remunerative prices for their products. ‘Willingness’, ‘adequate’ and ‘remunerative’ are very imprecise words. Willingness is associated with wage level on the one hand and availability of other support for living. Even compulsion to work may appear as willingness to work. Getting remunerative price will depend on what the products are and who the buyers are. In the case of widespread poverty, there is little probability that a majority of self-employed will get remunerative prices. Widely prevailing low productivity will not permit ‘adequate’ wages. The matter is a bit complicated.

Since the wages are found to be low, laws have to be made to ensure minimum wages. Most of the establishments and farms are so small that in some occasions these laws serve no better than harassment to both of them – employers and employees.

During the period under review, the absolute levels of employment did not grow at a rate higher than that of population, resulting in the same rate of growth of the unemployed.

The rate of unemployment, on a long run basis, continued to be the same with wide fluctuations over years, depending upon the peculiar circumstances. There was never a year when the level of economic activities in the economy demanded so much labour that we felt shortage, barring harvest seasons.

Data on comparable basis is available from 1972-73 only. The following findings deserve our attention:

(i) unemployment on usual status basis fluctuated between 1.6 per cent in 1972 73 and 3.9 per cent in 1977-78, being 2.5 per cent in 1983 and 3.7 per cent in 1987-88, (ii) unemployment reduced from over 8.0 per cent person-days in early seventies to 6.0 per cent person-days in late eighties, (iii) poverty in terms of absolute number continued to be around 32 crore from 1973-74 to 1987 88, (iv) poverty in terms of people below poverty line reduced from around 55 per cent in 1973-74 to 39 per cent in 1987 88, and (v) proportion of unemployed among the poor is less than the proportion of unemployed among the non-poor.

Supposing that the trends were similar in the fifties and sixties, we can infer that, despite fluctuations in employment/unemployment by usual status, per person per day employment and wages improved. As a result, poverty has declined to some extent. However, low unemployment rate among the poor shows that the poor cannot remain unemployed as there is no other way they can get their livelihood. There were not enough employment opportunities for all so that wages could rise adequately. Many people refer to such situation as jobless growth.

That our growth pattern did not create enough job opportunities is evident from the fact that the government had to run an umpteen number of programmes for creating supplementary self-employment opportunities or wage employment. Some of these programmes concentrated on small farmer/ manufacturer/trader so that they could employ themselves and earn their livelihood by producing things or providing service.

Reduction in Inequality : We wanted to reduce inequality in the distribution of income and consumption as well as concentration of wealth. It is believed that, in the initial stages of development, inequality tends to increase while the lot of everybody improves. We do not have practically any data on distribution of income over households. What we know is that the percentage of income tax payers has increased over the years and poverty, as percentage of people below poverty line, has reduced. By 1993-94, which is the year closest to the period under review, while the proportion of poor had reduced, their absolute number remained the same. In the case of income tax payers, both the proportion and the absolute number of income tax payers rose, though slightly. The size of the middle class has also risen both in proportion and number.

However, unless we show that income of top x percent has reduced from y₁ per cent to y₂ per cent during a long period of time, we cannot say much. In the case of total private consumption expenditure incurred by the households, it appears that the share of bottom 40 per cent in rural areas, for each of its deciles, has improved. On the other hand, the share of bottom 80 per cent in urban areas, for each of its deciles, has worsened in the case of total private consumption expenditure incurred by the households. Even then, the rural-urban disparity in consumption is on the rise.

So far as wealth is concerned, we know something about agricultural holdings. First, the intermediary interests have been abolished. Ceilings for ownership were fixed twice in all States (in mid-fifties and early seventies) for dry, one-crop irrigated and two-crop irrigated lands. Surplus land was declared and taken possession of and finally distributed to small farmers, evicted tenants or landless agricultural labourers. Of the total 14 crore hectares of net sown area, we find that in the forty years since 1951, after stringent ceiling laws formulated in 1972, not even 20 lakh hectares were found to be surplus and only a little more than 10 lakh hectares were distributed to about 44 lakh persons–on an average a little over one acre. However, time has resolved the issue to a great extent. In 1951, there were 72 million households of which 60 million were in the villages and 50 million might have had land. By 1991, there were 170 million households in the country of which, say 125 million, would have been in the villages with 100 million holders. Average holding size is just 1.4 hectare. Thus, over time increase in population leading to further fragmentation of holdings has hardly left 2 per cent holdings, which are in size bigger than 10 hectares. Those who possess such large land holdings are called large farmers. Of course, they possess almost 20 per cent total land.

Let us have a look at the concen tration of economic power in industrial (non-agricultural) sector, which we wanted to check while promoting industrial development. We know that there are government companies and there are private sector companies and in the latter case, public limited and private limited. Paid up capital used in government companies is found to be as much as in the non-government companies. Out of lakhs of companies (with 2.5 lakh registered factories), 1690 might be considered very big in 1991. Companies with less than Rs 100 crore, with average assets worth Rs 27 crore, accounted for 83.7 per cent with total assets about 30 per cent whereas companies with more than Rs1,000 crore, with average assets worth Rs 1,823 crore, accounted for less than 1 per cent and controlled assets worth 20 per cent.

 In 1965, it was found that 75 business houses controlled 1500 companies. Top twenty industrial houses in 1989-90 were: Tata, Birla, Reliance (which came up in the late seventies only), Thapar, JK, L&T, Modi, Bajaj, Mafatlal, M.A. Chidambaram, Hindustan Lever, United Brewaries, TVS Iyengar, ITC, Shri Ram, ACC, Oswal, Mahindra & Mahindra, Essar, Kirloskar. The first five controlled 60 per cent of the total assets of 20 industrial houses.

While allocation priorities were primarily responsible for this concentration, the industrial houses manipulated to secure things in their favour. Before 1969, when banks were nationalised, banking industry was controlled by these big houses. A Committee to inquire industrial licensing policy found that 56 per cent of total assistance from specialised financial institutions such as IFCI, ICICI and IDBI, 70 per cent of term-loan by the LIC and 62 per cent of term-loan by the SBI were secured by the big industrial houses. This is how the economic power got concentrated in a few hands in the industrial sector. They did not even employ more than 80 lakh persons.

Now, we discuss, in short, some of the other objectives, which were explicitly stated in later plans. Reduction in Poverty : To begin with, the idea was that mass poverty would be automatically removed with the strategy of growth along with

redistribution of wealth (like land), of income through fiscal instruments of taxation, and of consumption by intervention in market of essential commodities through price control and public distribution. Despite modest growth and operation of redistribution instruments, it was discovered that poverty was not declining to a significant extent. The Fifth Plan started with the removal of poverty as its prime objective, though a few supplementary programmes for poor sections of the society were launched during the Fourth Plan itself. Rigorous exercises were carried out. Controversy after controversy took place on methods of estimation of poverty. We find that poverty, as proportion of people below poverty line, did not reduce on a sustained basis till 1973-74 but reduced thereafter from 56 per cent to 36 per cent by 1993-94. Those who remained below the poverty line came closer to the poverty line. However, the absolute number of poor remained 32 crore.

Diversification of Economic Activities

Our industrial base, contributed by the public sector and supplemented by the private sector, got quite diversified by 1991 even though our growth rate was not considered very high. Many things, which we can produce, were not to be imported by necessity. Petroleum and petroleum products were being imported in order to conserve our own reserves. In any case we cannot do much in the area.

Many chemicals and fertilizers, which we had to import earlier, were being produced domestically. We are doing quite well in heavy engineering. In fact, there are technological feats to our credit, particularly in the areas where we were denied technology. Achievements : Many things have happened which do not get captured in what we have discussed above. You may recall that our life expectancy at birth has almost doubled and at other ages, considerably improved. Our infant mortality rate considerably reduced from 140 per thousand in the fifties to 80 per thousand by the close of eighties though it was yet very high in comparison to other countries. Our death rate came down to about 10 per thousand in 1991 from around 23 in 1951. By the way birth rate too reduced to 30 per thousand by 1991 as against 45 per thousand in 1950s.

Concluding Remarks

We learnt about the rationale for resorting to planning, and some thoughts on planning during pre-independence. We also tried to understand the generic meaning of planning and then the specific context of national planning by the State. We also learnt that we adopted comprehensive planning for ourselves, encompassing economic and social spheres. Then, we had a glimpse at history of our plans.

Next, we discussed the objectives and differentiated them between planning objectives and plan objectives. Planning objectives, which could be said to be long-term goals were delineated as growth, employment and reduction in inequality. Main features of economic policy were outlined as interventionist state, centralised planning, expansion of public sector, and import substitution.

Finally, we discussed achievements and failures of policy of planning as pursued in the forty years since 1951. We emphasised that we improved on all counts. Our achievements have been less than what we wanted to achieve. But our achievements were definitely commendable when we compared them with what had been happening before Independence. And, this owes a great deal to our policy of planning for social and economic development. But, we failed to some extent in reducing poverty and unemployment. We also failed in reducing concentration of wealth or economic power in a few hands and thus perpetuated as well.