Introduction
‘The more we thought about this planning business, the vaster it grew in its sweep and rage till it seemed to embrace almost every activity . . . . The fascination of this work grew upon me . . . .’ (Jawaharlal Nehru, Discovery of India, (London: Meridian Books, Reference Nehru1956, p. 402)
This essay seeks to unravel the chequered histories of developmental planning in post-colonial India. It argues that the Indian political leadership's romance with developmental planning lasted merely 10 years and that the attempts to institutionalise planning fizzled out within a decade of Independence. By the late 1950s the euphoria over planning had largely evaporated among Indian policy-making circles, even though the formal structures of planning continued. This was ironical given how central planning was to the discursive and institutional aspects of nation-building. ‘Planning’ and the ‘developmentalist’ impulse, were perhaps the most important raison d'etre of the new post-colonial state and high on the agenda of political leaders anxious to build legitimacy. Through planned development, the leadership intended to accomplish what they had critiqued the colonial state for not being able to do, i. e. to bring about the benefits of material progress through scientific means to be shared equitably among all citizens. Planning thus held high ground. As Partha Chatterjee points out, it also transplanted the power to assign national priorities from the politicians to the technocrats. The state could project itself as a technical, non-partisan and disinterested instrument working towards a modern, industrial society and engaged in exercising state power, insulated from the realm of politics.Footnote 1
It is well known that in the 1930s and '40s the idea of planning had captured the imagination of the Indian political leadership. An avid advocate of the ‘scientific outlook’, Jawaharlal Nehru in his presidential address to the Indian National Congress in 1936 brought institutional attention and urgency to the need to address India's economic problems.Footnote 2 Following this, in 1938, the Congress set up a ‘National Planning Committee’ to envision how independent India would be reconstructed.Footnote 3 The fascination with planning grew in the penultimate decade of India's anti-colonial struggle as the political leadership increasingly contemplated the future. The 1940s saw three major plan blueprints—the ‘Bombay Plan’, pioneered by several leading industrialists, visualised planning as an aid to capitalist development; the ‘People's Plan’ authored by M. N. Roy projected a Leftist vision; and the ‘Gandhian Plan,’ put forth by Shriman Narayan, visualized a self-sufficient village economy.Footnote 4 The 1940s was also a decade in which economic deprivation, food paucity and the ‘Great Bengal Famine’ (which claimed several million lives) intensified the awareness of the need for developmental planning. The war experience demonstrated what could be achieved if the state undertook the mobilization of resources; it engendered faith in governmental intervention in economic life.Footnote 5 The leadership perceived economic planning as the means to overcome deficiencies of the market-price system and enlist public support to realize national objectives.
The international context also promoted a favourable view of planning. Labour's 1945 victory in Britain, the passing of Employment Acts in the UK and the USA and the Beveridge Report on Full Employment in a Free Society (1945) reinforced the idea that state intervention was imperative for economic reconstruction.Footnote 6 The setting up of multi-lateral economic institutions such as the International Monetary Fund (IMF) and the World Bank, to lay down the rules of the post-war global economic architecture, also convinced India's new leaders that they needed to create institutions to plan the economy.
Thus, by the time India gained independence in 1947, ‘planning’ had become a buzzword. ‘Planning was in the air’, recalled Tarlok Singh, the longest serving member of the Planning Commission, sometimes called ‘India's Mr Planning’.Footnote 7 Such zeal led the political leadership to institutionalise the idea of planning, the most significant outcome of which was the setting up of the National Planning Commission (PC) by the Government of India in March 1950. To Jawaharlal Nehru, managing the economy through processes of developmental planning, represented a systematic attempt at national reconstruction, at uplifting large sections of the populace out of poverty, at boldly industrializing an agrarian society and, further, at ensuring that India occupied its place of pride as a front-ranking Asian nation. Indeed, he looked upon this endeavour in developmental planning as an ‘exciting pilgrimage’ and a ‘mighty adventure’ upon which the nation had embarked.Footnote 8
Yet, in retrospect, it was ironical that in less than a decade of the PC's formation, the euphoria about planning had largely evaporated from Indian policy-making circles. By the late 1950s, policy-makers and economists were raising concerns about the failure of the Indian planning experience. The signs accentuated and, by the mid-1960s, there was open talk of a crisis. In 1966, when economists Paul Streeton and Michael Lipton brought together academicians and policy practitioners at the University of Sussex for a conference to evaluate the outcomes of planning, they appropriately entitled the publication which resulted from the proceedings, The Crisis of Indian Planning.Footnote 9
This essay attempts to make sense of this paradoxical experience of the first decade of Indian planning. It looks at attempts to institutionalise the idea of planning through the setting up of the PC in 1950 and the overall experience of its functioning till the early 1960s.Footnote 10 The commonly held view of India's post-colonial economic experience is that it embarked on a seamless process of economic development through planning, which continued till 1991, when there was a paradigm shift. This conventional view holds that the Nehruvian era (1947–64) unfolded a ‘grand design’, inaugurating a policy framework resting upon public ownership of industry, state controls over key production sectors, a strategy of growth based on import substitution and a regulated foreign investment regime. The ‘Mahalanobis model’, launched during the Second Five-Year Plan (1956), provided vital ‘building blocks of the grand design’. It is also believed that this framework was influenced by the ‘Soviet-style command economy model’, emphasizing fostering of heavy industry, neglect of foreign trade and reliance on small-scale industry and agriculture for consumer goods production. The late 1950s and early 1960s are then seen as the ‘high water-mark of Indian planning, with the most complete and exacting dominance of the economy by the state-led planning process’.Footnote 11 The dominant view is that, after a brief interregnum, the ideology of self-reliance resurfaced with a vengeance and remained largely intact till the late 1980s, when a younger generation of leaders took the first hesitant steps towards ‘reforming’ the economy. Though there have been some revisions lately, this overall view of the post-colonial Indian economic experience continues to be influential.Footnote 12
This essay seeks to counter this view of India's post-colonial political economy by suggesting that the Indian experience was not a linear one, as has been depicted in the literature, but one marked by discontinuities as well as the continuous process of re-thinking and, not the least, by moments of real economic crisis. It shows that by the late 1950s, the idea of planning had passed its prime and the PC no longer held the sway in economic decision-making; power gradually shifted to the corridors of the Ministry of Finance. These 10 years were marked by debate and acrimonious contention: debate on the nature of the plans and contention on who would control the process of economic decision-making. There was growing contention between the PC, on the one hand and the Ministries of Finance and of Commerce and Industry, on the other. In this conflict of jurisdictions, erupted the foreign exchange crisis of 1956, which decisively shifted the balance of institutional power, after which the Ministry of Finance increasingly came to exercise its dominance. Although the formalities of planning continued, with the PC preparing its five-year plan documents, it was the financial planning executed by the Ministry of Finance that largely determined the outcomes. What remained of planning, thereafter, was not much more than budgeting for central and state expenditure, although the façade of the five-year plans was kept up.
Institutional Beginnings
Let us start by looking at the PC's origins. Although there existed widespread acceptance of the need for planning, there was no consensus over its objectives, its methodology, or its agency. Though personally convinced of the wisdom of planning, Nehru in his early years as prime minister was unable to unite various elements within his party and government on this issue. The political context was such that in his first three years as prime minister he had to share power in a duumvirate with his deputy Sardar Patel, a strong pro-capitalist right-winger. Though he was deeply committed to the idea, it is not surprising that the Indian Constitution, promulgated in 1950, did not provide for a planning body. Perhaps Nehru could sense that most members of the Congress party and the Constituent Assembly would be hostile to a statutory planning body and might even oppose the idea of a planned economy inherently committed to working towards a more egalitarian society. Nehru was probably also mindful that its inclusion in the Constitution could impose a statutory orthodoxy upon the working of such a body, thus hindering its operational flexibility.
Finally, after much effort by Nehru and acrimonious debate within Congress party circles, it was in January 1950, after having been in power for three years, that the Congress Working Committee adopted a resolution to create a National PC.Footnote 13 Its objectives were broadly to assess the country's resources, prioritise investment proposals and ‘formulate plans’ for the most effective use of resources for national reconstruction.Footnote 14 However, the Working Committee also set up a parallel body, the Congress Economic Planning Committee, under the chairmanship of veteran Congress leader G. B. Pant, to signpost the direction and draw up immediate and long-term economic plans.Footnote 15 The multiplicity of planning bodies mirrored the rift within party and cabinet.Footnote 16
Nehru took deep interest in the PC's composition. He called upon C.D. Deshmukh, member of the Indian Civil Service (ICS) with a natural science Tripos from Cambridge and a law degree from the Inner Temple as well as the first Indian governor of the Reserve Bank, to help organize the PC.Footnote 17 Gulzarilal Nanda, seasoned Congress politician, trade union organizer and member of the Congress’ Economic Program Committee was appointed Deputy Chairman.Footnote 18 Other members were V.T. Krishnamachari, lawyer and civil servant with long administrative experience as Dewan of Baroda and Vice-President of the Constituent Assembly in 1947,Footnote 19 G.L. Mehta, businessman with an interest in shipping and N.R. Pillai, former Ambassador to France; the latter was appointed Secretary-General. The main coordinator was Tarlok Singh, member of the ICS, alumnus of the London School of Economics, and Nehru's Deputy Secretary during the Interim Government, with a deep interest in rural development.Footnote 20 Members were appointed not so much for their economic expertise but for their socialist leanings and views on India's political future.
The only way for Nehru to ensure a degree of pre-eminence of the PC was to lend it the weight of his own authority by becoming its chairman. An astute political commentator noted that ‘the Prime Minister is not Chairman because of his grasp of economic affairs’ but ‘to ensure that the Commission's recommendations are presented to Government with the greatest possible weight behind them, to influence the speed of work and not its direction and to give his sponsorship’ to the PC.Footnote 21
Nehru's chairmanship catalysed an immediate increase in the PC's standing as the pre-eminent national economic policy-making body. To lend authority to its members, Nehru granted them the status of Ministers of State in the Council of Ministers in the Warrant of Precedence, with the Deputy Chairman ranking as a cabinet minister. Nehru made it clear that the PC had the ‘highest importance and status’ and was to be ‘a top-ranking body with a great deal of authority and prestige’.Footnote 22 Following the PC's inaugural meeting, he told state chief ministers that ‘we are building great hopes on this Commission’ and that it would be a ‘continuing commission which will help in building the new India’.Footnote 23 In no uncertain terms, he stated its importance: ‘No department of Government should refrain from giving the fullest co-operation to the Planning Commission. It can only do so if it does not believe in the basic policy of both the Congress and the Government. That is to say, it can only do so if it goes in a different direction from that of others. That surely is most undesirable . . . . There is no other choice and no other way . . . . the main directing agency for planning will be the Planning Commission at the Centre’.Footnote 24
Institutions and Jurisdictions
The PC soon began to play the role of the single most important arbiter on economic policy. Chief ministers were directed that all proposals with ‘economic or financial significance’ must be sent to the PC, which would deliberate on ‘any step which might have economic consequences’. This included all economic issues, ‘even matters which are entirely within your Government's competence’.Footnote 25 The PC was to examine all proposals for capital projects from the states. Nehru expected ‘fullest cooperation’ from the states and warned that any lack of support would be perceived as opposition to the central leadership.Footnote 26 He also tried to establish the convention that all important economic proposals from the central ministries should come before the PC.
Within months of its establishment, economic decision-making came to be centralized in Yojana Bhavan, the PC headquarters, located prominently on Parliament Street in New Delhi. As the PC's influence grew, its members became regular invitees to cabinet meetings, where important decisions on economic matters were discussed. They were frequently honoured at Congress Working Committee meetings. Nehru reported: ‘I feel the wisest thing that our Government has done during these three or four years has been the appointment of this Planning Commission’.Footnote 27 The PC came to dominate economic decisions and exercise influence over economic governance in states. The growing perception was that almost all important issues, other than defence and foreign affairs, would come before the PC.Footnote 28 So powerful did the PC become that its membership was regarded as a ticket to the cabinet itself. Within a few years of its formation, seven of the PC's 10 members were also cabinet members. Not surprisingly, ministers vied to be on the PC, not relinquishing office even when they received new appointments.
However, this domineering role was soon challenged. In 1951, when the First Five-Year Plan was formulated, several chief ministers like Morarji Desai in Bombay and K. Hanumanthaiyya in Mysore were ‘frankly resentful’ that the PC consulted them only nominally and that too at a very late stage. They complained of being taken into confidence only when ‘everything bar the shouting was over’.Footnote 29 Similar concerns were raised in the Parliament. To facilitate greater consultation between the PC and the states, C.D. Deshmukh recommended the formation of the National Development Council (NDC) in 1952. It comprised state chief ministers and PC members and was presided over by the Prime Minister.Footnote 30 However, the Council itself became the subject of much controversy since it often unilaterally resolved certain important issues, which otherwise state legislatures would have discussed.Footnote 31 Thus ironically, the Council's formation only increased the PC's influence, making it an intermediary between the centre and the states.
The PC's powers over the states increased because of the provision for central grants-in-aid, which the states were eligible to receive. It was the PC's task to allot these and it disbursed them on several grounds, either for specific projects, or as loans, or as schemes deemed to be ‘centrally sponsored’. Under the category of ‘economic and social services’, subjects that should have fallen under the states’ purview such as education, health, agriculture, social welfare, industrial housing, etc. came within the ambit of central planning. Through its powers to grant largesse to the states, the PC held onus for real resource budgeting, even as financial budgeting was left to the Ministry of Finance.Footnote 32 This gave the PC a privileged position; its meetings with chief ministers became occasions to lobby for funds for different projects.Footnote 33 The PC exploited these financial levers to consolidate its powers. Before plan discussions, it made public only a preliminary estimate of the centre's total contribution to state plans. With no clear ceiling on central assistance to individual states, some states got more than others, depending on their capacity of negotiation.Footnote 34
Even as the PC grew more influential, it got embroiled in jurisdictional conflicts vis-à-vis other administrative bodies, especially the Ministries of Finance and Commerce and Industry. One acrimonious conflict arose soon after the PC's formation over the issue of decontrol and raw cotton price policy. In early 1950, the Cabinet endorsed the move to implement price decontrol, a highly emotive issue within political circles since economic controls were introduced for the first time in 1942 during the War.Footnote 35 Imposed at a time when anti-colonial feelings were elevated, controls aroused much resentment. They were widely viewed as an ‘anathema disliked by producers . . . a bugbear to consumers’ and ‘hated by the average politician’ who saw in them an imposition by an alien government at a time when political repression was severe.Footnote 36 Gandhian antipathy to controls rendered the opposition even more vociferous. Thus, soon after the new leadership took over, it experimented with decontrols in late 1947, but without success.Footnote 37 When the demand for decontrol was raised again, it found many supporters within ruling political circles and the Ministries of Industry and Agriculture. However, the PC took a contrary view, to which Nehru lent his weight. More than once, he had to intervene to help the PC's view prevail.Footnote 38
Finance minister John Matthai was greatly upset at this, perceiving the PC's interference as undue appropriation of power.Footnote 39 Taking a stand on controls, he said that the PC was ‘interfering in governmental working’.Footnote 40 He objected to the PC members’ ever-growing influence, and their presence at cabinet meetings. Matthai confessed that it was near impossible to take a position contrary to the PC's, given its influential membership, and asserted that the PC, ‘as far as economic matters are concerned ceases in effect to be an advisory body’.Footnote 41 So perturbed was Matthai that he resigned over the issue, holding that the PC was emerging as a ‘parallel cabinet’ because of which ‘cabinet responsibility had definitely weakened’. Its increased influence, he warned, would ‘weaken’ the authority of the finance ministry and ‘gradually reduce the Cabinet to practically a registering body’. Nehru tried hard to persuade Matthai to withdraw his resignation. He assured him that ‘at no time has there been any question in the PC's mind or any other mind for that Commission to function as a parallel cabinet’.Footnote 42 However, a disgruntled Matthai did not relent. His resignation was ironical, given that it was he who had proudly announced the formation of the PC on the floor of the Parliament during the first budget session after Independence, and also in the light of his deep interest in planning since the days of the Bombay Plan of 1944.
The controversy over price controls dragged on for the next two years during 1951–52, highlighting the differences between the PC members and the ministries involved in economic affairs. Many important provincial Congress heavy-weights such as S.K. Patil, then president of the Bombay Provincial Congress Committee, were also growing restive with the PC's stand on decontrols.Footnote 43 Many a time, Nehru had to intervene to make peace. He also had to personally deny to the press that there were rifts between the PC and the ministries over this issue.Footnote 44 So controversial did the issue become that the ‘Chapter on Food Policy’ for the First Five-Year Plan could not be placed before the meeting of the PC Advisory Board in October 1952 when it met to discuss the plan. Rumours were rife that PC members were ready to hand in their resignations if they did not have their way on this issue.Footnote 45 Finally, the Parliament debated over the subject in November 1952 and implemented certain relaxations in control.Footnote 46
There are several such examples of what was perceived as the PC's overstepping of its jurisdiction and interfering in economic decision-making. In 1952, the PC took up the Common Production Program (CCP), formulated as part of the First Five-Year Plan to promote small-scale industries in the face of competition. It envisaged reservation of areas of production for small industries, non-expansion of capacity in large-scale industry, imposition of excise on products of large-scale industries and positive measures for the supply of raw materials, equipment and technical and financial assistance to protect small units, etc. Though under implementation, the programme had not been seriously launched.Footnote 47 In late 1952, the PC evinced interest in the CCP; Tarlok Singh took up the issue with the recently constituted All India Khadi and Village Industries Board (AIKVIB). Detailed discussions were held to draw up a proposal to implement the programme. In the meantime, the Ministry of Commerce and Industry was getting irked at being excluded from the discussions between the PC and the AIKVIB. Alleging that his officials had been kept in the dark, T.T. Krishnamachari, Minister of Commerce and Industry, intervened to stop the discussions.Footnote 48 Distancing his ministry from all initiatives, he personally informed the AIKVIB that he did ‘not know the connotation of the use of the phrase “Common Production Program” as intended by the Planning Commission’. ‘In any event,’ he told them, ‘as a responsible minister, I believe that it is not the duty of the Khadi and Village Industries Board to take upon themselves the question of determining the common production program for all industries’. Rather, it ‘would be best for them not to make the reference of this phase . . . as the basis to determine the position of the Khadi and Village industries board vis-à-vis the Commerce and Industry Ministry’. The commerce minister's ire at the PC's initiative effectively ended all talks between the PC and the AIKVIB.Footnote 49
Another contentious issue arose around the same time. The Ministry of Commerce and Industry accused the PC of encouraging private industrialists to directly report to it on plans and projects, thus encouraging industrialists to circumvent the ministry. Industrialists with grouses against the ministry would ‘seek protection under the umbrella of the Commission’ and have direct dealings with it without the ministry's knowledge. They alleged that many large private sector companies such as Dunlop, the famous cushion manufacturer, preferred to deal directly with the PC. A rather annoyed T.T. Krishnamachari once again had to take issue with the PC. He was forced to speak with influential PC members and ‘point out that this is not the proper method’. He also wrote formally to V.T. Krishnamachari, Deputy Chairman of the PC, demanding ‘a clarification whether the Planning Commission was a super-cabinet or a parallel government or an advisory body’.Footnote 50
By 1952, the press was beginning to report, speculate and comment extensively on the strained relations between the PC and the ministries. Nehru found himself repeatedly asserting that there was no difference between the PC and the ministries ‘in regard to basic principles’.Footnote 51 The rift between the PC and the commerce ministry led T.T. Krishnamachari to finally write in despair to the Prime Minister in December 1953: ‘It is up to you to decide the future relationship between the two bodies.’ He complained that the PC never played a helpful role: ‘So far the Planning Commission has had very little to do with industries and industrialization except in a very negative way. Their contribution so far is to bar quick progress in instances that had to go to them’.Footnote 52 Once again, Nehru found himself pacifying an irate minister. He assured Krishnamachari that the PC ‘is not only not a super-Cabinet but has no executive functions’. However, he did ask him to ‘remember that the Members of the Planning Commission have the status of Ministers’ and thus his ministry ‘should treat them with every respect’.Footnote 53 This did not, however, improve the minister's relations with the PC. There was open comment of ‘the fact that T.T.Krishnamachari privately regards members of the PC, “as so many ninnies”.’Footnote 54
The commerce ministry was not alone in crossing swords with the PC.Footnote 55 Perhaps the PC's relations with the finance ministry were the most discordant, the conflict arising from the issue of how much control was to be vested with the finance ministry. Some antagonism started early in the PC's life but a particularly acrimonious instance occurred in 1954 when discussions were held first in the PC and later in the cabinet about delays in execution of projects of the Five-Year Plans. These delays were attributed to the ‘administrative set up and the system of financial control’.Footnote 56 Nehru instituted an enquiry on investigation of financial rules and procedures and system of financial control, to be conducted by Asok Chanda, then Secretary in the production ministry and designate Auditor-General. Chanda put forward several suggestions to ‘accelerate the execution of projects and minimize the lapse of budgetary allotments’. Among these were recommendations on budgetary and financial procedures,Footnote 57 of which the former did not provoke much response but those on financial procedures caused much resentment within the finance ministry. Chanda suggested that while ‘overall financial control, with reference to financial policy and principles should continue to vest in the Finance Ministry, detailed scrutiny of proposals at expert level should vest in the administrative machinery’. There were two specific proposals in this regard. First, administrative ministries should have ‘internal financial advisers’ rather than financial advisers appointed from the Ministry of Finance, as was the norm. Appointing financial advisers from the finance ministry, he pointed out, caused disputes on petty matters and dissipated time and resources. ‘Excessive central control’, which also discouraged local planning according to Chanda, would change ‘with the administrative ministries taking charge themselves’.Footnote 58 Thus, financial advisers ‘would be subordinate to the spending authorities responsible for project execution'. The second suggestion was that the Centre should agree to finance projects based on a state's undertaking to carry them out, even if the state could not immediately promise a matching contribution. In Chanda's view, any ‘detailed scrutiny of States’ schemes should be discarded’ and the finance ministry needed to confine itself to a ‘broad administrative scrutiny’ and ‘a broad financial review’.Footnote 59
Not unexpectedly, the finance ministry was much annoyed at these suggestions. Finance minister C.D. Deshmukh perceived an attempt to wrest financial control from his ministry and objected strongly. He accused the PC of clandestinely discussing the need for an enquiry when he was overseas; he also accused the Prime Minister of instituting the Chanda enquiry in his absence. Here was, he alleged, an attempt to ‘place the Finance Ministry on the mat’. He countered the suggestion that scrutiny by the finance ministry should be done away with and the allegation that his ministry's involvement ‘degenerates into disputes’ as nothing but absurd. Rather, the ministry's involvement led to crucial savings. He claimed that steps had already been taken to accelerate financial scrutiny of expenditure a year earlier, with the Prime Minister's knowledge. The enquiry's objective, according to Deshmukh, was ‘not to promote a factual investigation of where the implementation of the Plan is being obstructed, but to carry out hasty reforms and reduce the Finance Ministry to impotence’.Footnote 60 He could not agree with its recommendations on financing of projects. In strong language, he retorted that the report ‘has come to me as a shock from an officer who is going to be appointed as the Comptroller and Auditor General’.Footnote 61 This was a concerted attempt to ‘reduce the Finance Ministry to impotence’. An exasperated Deshmukh saw this as just another incidence of the ‘never-ending putting-the-Finance Ministry-on-the-mat’ that he had been encountering.Footnote 62
Deshmukh viewed the attack on his ministry as serious enough to warrant his resignation from both his posts, as finance minister and member of the PC. Nehru endeavoured to placate his minister by suggesting that the cabinet discuss the matter, but a disgruntled Deshmukh disagreed claiming that it ‘is bound to degenerate into a combined assault on the Finance Ministry’.Footnote 63 As he told the Prime Minister frankly: ‘To put the matter in a nutshell, the universal tendency is to make the Finance Minister the beast of burden of all Governments, Central and Provincial. Now that he is at the end of his tether, he can no longer bear these burdens, without some snapping. I think it will be good for the soul of all of us if you and the Party bore your own financial responsibility’.Footnote 64 It took much persuasion and Nehru's personal assurance that ‘there is and can be no question of short-circuiting the Finance Minister’ for Deshmukh to relent and withdraw his resignation; the Chanda report was shelved.Footnote 65
Acrimonious relations between the PC and the finance ministry were common knowledge in top political and administrative circles. As defence minister V.K. Krishna Menon, a PC member and close confidante of Nehru, put it: ‘Successive finance ministers have been allergic to the Planning Commission and have treated it as something which should take orders from them . . . Each finance minister tried to make the Planning Commission an adjunct of himself . . . each of the finance ministers would have tried or would have preferred to do without it’.Footnote 66 The power balance between the finance ministry and the PC depended upon the political influence of the ministers. While ministers like Matthai and Deshmukh, essentially civil servants coopted into the cabinet by Nehru, could not exert much influence vis-à-vis the PC, others who had their own political backing like T.T. Krishnamachari and Morarji Desai could easily ignore the PC at most times.
The PC was getting into trouble not only with different ministries but also with financial bodies such as the Finance Commission because of its powers to disburse grants-in-aid to the states. Under the Constitution, every five years, a Finance Commission was to be appointed and mandated to set a formula of how much percentage of returns from union income and excise taxes was to go to the states.Footnote 67 Thus the Finance Commission gave statutory grants while the PC controlled disbursement of grants-in-aid. As it happened, the grants-in-aid always exceeded other grants. As we have noted, with the PC's formation, subjects that normally came under the states (education, health, agriculture, cooperatives, social welfare, industrial housing, etc.) shifted to the ambit of central planning under the category of ‘economic and social services’. Yojana Bhavan controlled grants for these. As disbursers of grants, the PC and the Finance Commission worked in overlapping ways and often covered similar ground. The Finance Commission's scope was, however, limited to a review of the revenue segment of the budget forecasts, while the PC looked at both capital and revenue requirements of states. There was thus an overlap in the scope of recommendations made in regard to specific items of a state's functions, which required central assistance. Problems arose because the PC's plans did not distinguish between revenue expenditure and capital expenditure, while the Finance Commission's main function was to make recommendations for the devolution of revenue resources. Further, the responsibilities were not clearly divided between the two. The PC's increasing powers and the fact that grants-in-aid always exceeded other grants led to the view that the PC was taking over the powers of the Finance Commission.Footnote 68
The First Finance Commission, which met in 1950, recommended financial assistance for both current and capital requirements of states. The Second Finance Commission, appointed in 1956, noted in frustration that its constitutional role could no longer be fulfilled, hindered as it was due to the operations of the PC; it noted that there was ‘a real need for effectively coordinating the work of the two bodies’.Footnote 69 It emphasised: ‘Some anomalies inevitably arise where the functions of the two commissions overlap. The former is a statutory body with limited functions, while the latter has to deal comprehensively with the finances of the Centre and the States in the widest sense of the term. So long as both these Commissions have to function, there appears to be a real need for effectively coordinating their work’.Footnote 70 Matters only got worse over the years; by the time the Third Finance Commission was appointed in 1961, its critique was even more forthright. It suggested that, given the overlap in their jurisdictions, the Finance Commission be dispensed with and replaced with the PC.Footnote 71
Visionaries and Realists
As the PC reached the dizzy heights of power within a few years of its establishment, an outsider called Prasanta Chandra Mahalanobis was quietly ascending within its corridors.Footnote 72 Mahalanobis, a physics graduate from Presidency College, Calcutta and a natural science Tripos from Cambridge, taught at Presidency College. Mahalanobis was deeply interested in statistics and hugely influenced by the ideas of nineteenth century physicists who emphasized the quantitative aspects of reasoning and the view that qualitative reasoning was nothing more than ‘poor quantitative reasoning’. The belief that ‘measurement is science’ prompted Mahalanobis to take up statistics. He moved comfortably in top social circles of Calcutta, growing especially close to the Nobel laureate Rabindranath Tagore.Footnote 73 In his years at Presidency College, he indulged his interest in statistics and built up a small statistical laboratory, which in 1931 formed the nucleus of the Indian Statistical Institute (ISI).
‘The Professor’, as Mahalanobis liked to refer to himself, had met Nehru at Tagore's residence but it was only in 1940 that he told him of his great interest in statistics. After dinner at Anand Bhavan, Mahalanobis and Nehru talked till ‘after two in the morning’.Footnote 74 The old Cambridge link also brought Mahalanobis close to C.D. Deshmukh. With the backing of Nehru and Deshmukh, Mahalanobis was appointed Honorary Statistical Adviser to the Government of India in 1949 and helped establish the Directorate of National Sample Survey. In 1951, the ISI was commissioned to look into two possibilities: (1) of solving the problem of unemployment in 10 years, and (2) of increasing national income at a reasonably rapid rate.Footnote 75 In the course of this work, Mahalanobis got interested in issues of planning and development, of which he did not know much till then. As he wrote to close confidante Pitambar Pant: ‘I had only very vague ideas of planning when I first came to Delhi. From January 1950, when I first started handling national income data, I began to learn’.Footnote 76 On the basis of these joint studies, he prepared a ‘draft plan frame’ in 1955.
With his lack of formal training in economics, Mahalanobis felt deeply complexed in propagating his ideas publicly in front of professional economists. ‘To be quite frank I am so ignorant about academic economics and my Indian colleagues are so cock-sure about their own infallibility that I had a little bit of a inferiority complex about economic matters’, he confessed.Footnote 77 However, he bolstered his confidence by travelling abroad frequently and developing contacts with leading Western economists. As he himself wrote:
One reason why I have been coming abroad so often is a partly conscious and partly sub-conscious urge to seek contacts, to discuss, to collect information and to equip myself for physical training. There is practically no literature on this subject. Economists in my own country are great experts in Western text- books (about which my own ignorance is profound) and they do not even see the problem as I see it—and we have no common language. I find that top economists in Europe . . . England . . . USA . . . have taken me quite seriously, and I have been learning much from them through personal discussions . . . My frequent visits to the West have given me not only a much greater breadth of vision but have also given me increasing self-confidence.Footnote 78
Soon, the ISI became the Mecca for economists and scientists from several Western countries, the Soviet Union and China. Among those who spent time there were leading economists of the period such as Simon Kuznets, Paul Baran, Joan Robinson, Jan Timbergen, Michael Kalecki, Nicholas Kaldor and R.M. Goodwin.Footnote 79 Mahalanobis knew he needed the support of influential Western economists to catalyse acceptance of his own ideas within Indian intellectual and policy-making circles. ‘Trained and experienced economists can help us a great deal in speaking in their own language to Indian economists (which we are unable to do) and also in carrying conviction to administrators and political leaders’, he told Pitambar Pant. Reporting his conversation with Joan Robinson, the distinguished Cambridge economist, he said: ‘I told her that her visit might be of very great help to us because her support may carry conviction that our approach to developmental planning is not foolish. She smiled and said—“Yes, I think that I would be able to knock some sense into the heads of the economists in your country”’.Footnote 80
Mahalanobis’ rise in the corridors of power in New Delhi was rapid. He was appointed de facto member of the PC (in his capacity of Statistical Advisor) and was later given de jure status as a Member from 1959. This quick rise was due to Nehru who called Mahalanobis ‘the presiding genius of statistics in India’.Footnote 81 For Nehru, Mahalanobis entered the scene at a time when he was growing increasingly disillusioned with the slow pace of economic progress. ‘How to provide for a number of more excellent and important schemes with the resources at their disposal? Arithmetic does not help and magic is not available,’ he wrote to Morarji Desai. By 1952, Nehru had begun to feel that the PC had become so engrossed with day-to-day matters that it had come to ‘a stage of something approaching mental disintegration’.Footnote 82 As this restiveness increased, Nehru began to think that the PC ‘lacks the scientific and technical outlook. The world elsewhere is run more and more by technical men, engineers, scientists, etc . . . I feel also that the Planning Commission tend to develop rather on the old Government of India lines’.Footnote 83
In 1955, Mahalanobis put forth his blueprint on the basis of the studies he had been charged with at the ISI in 1951. This came at just the time when Nehru was becoming determined to move away from his initial caution on economic affairs to a clear commitment to what he called a ‘socialist pattern of society’ which the Congress formally adopted as the goal of Indian development at its Avadhi session. With very little understanding of economics, Nehru's chief interest was only of achieving the broad goals of development and socialism, and notions of semi-automatic characteristics of planning and development appealed to him. As he put it:
Planning and development have become sort of mathematical problem which may be worked out scientifically . . . {Planning} for industrial development is generally accepted as a matter of mathematical formula . . . {Men} of science, planners, experts who approach our problems from purely a scientific point of view {rather than an ideological one} . . . agree, broadly, that given certain pre-conditions of development, industrialization and all that, certain exact conclusions follow almost as a matter of course.Footnote 84
According to Sunil Khilnani, in Mahalanobis ‘Nehru saw the utility of someone who could formulate political aims in the technical and scientific language of economic policy’.Footnote 85 Mahalanobis, on his part, knew that much depended on Nehru's support. ‘JN is the greatest asset we have at present,’ he wrote to Pitambar Pant in 1954, ‘and all I can do is to hope he will be big enough and wise enough to get the whole thing through in his own lifetime’.Footnote 86 While thoughts of New Delhi, with its economists and finance administrators disheartened Mahalanobis, Nehru appeared to him as the only hope.
In 1955 Mahalanobis’ plan was published in a celebrated paper titled ‘The Operational Research Approach to Planning in India’ published in Sankhya, the Indian Journal of Statistics, a journal he edited. The First Five-Year Plan, according to Mahalanobis, was a mere ‘anthology’; a future plan he declared ‘has to be a drama’.Footnote 87 In simple terms, his model advocated ‘large planning’ and justified investment in basic and heavy machine-building industry, investment in capital goods to produce capital goods, to maximize long-term growth and it envisaged a dominant role for the public sector and an autarchic approach to self-reliance.Footnote 88 Investment in ‘capital goods to produce capital goods’ was to be implemented through the state's centralized industrial investment planning.
‘The Professor’ took easily to the power that the Prime Minister invested in him. But the pace at which he rose led to considerable concerns within the PC and other bodies such as the finance ministry. To ease Mahalanobis into the corridors of power in a resistant capital, Nehru appointed I.G. Patel, a young economist recently recruited in the finance ministry, as a liaison person between Delhi and Calcutta.Footnote 89 However, his patronage by Nehru brought him to the forefront. Within the PC, Mahalanobis was rumoured to be leading ‘a parallel secretariat’ of those who agreed with him.
The Mahalanobis model did, however, hold considerable appeal for many. To begin with, there was a general feeling among policy-makers that something bigger was required compared to the first plan, which was seen as too modest. Its promotion of domestic production of heavy industry goods appealed to many because of its ‘essentially patriotic and nationalistic flavour, which underlay much of economic thinking in India since the Bombay Plan’. ‘All notions of catching up with the West and developing a diversified industrial structure had an almost primordial appeal’, recalls I.G. Patel. ‘We swallowed easily notions such as the Big Bush and “anything you can do, I can do better”’.Footnote 90
Yet, much doubt and scepticism about the model were also expressed. Gulzarilal Nanda, then Minister of Planning, while agreeing on the need for rapid industrialization, warned that the financial resources envisaged in the plan were not available and would limit the extent to which these objectives could be realized.Footnote 91 Tarlok Singh, longest serving official of the PC, doubted the plan's industrial emphasis and preferred a smaller plan with greater weight to agriculture.Footnote 92 J.J. Anjaria, former student of C.N. Vakil, Chief of the Economic Commission of the PC and Chief Economic Adviser to the Government of India at the time, was critical of the plan and tried his ‘best to dampen the socialist fervour by concocting the expression “a socialistic pattern of society”.’ ‘Insiders could see that his interventions were ‘almost a classic case of damming by faint praise’.Footnote 93 There was also much sniping from the wings in pronouncements of ministers of finance and commerce and industry who subtly critiqued the Plan. As the Economic Weekly dryly commented: ‘During the last five years, the Planning Commission has steadily lost authority. Now it is on the brink of losing the Second Five-Year Plan. Recent pronouncements of the ministers of finance and of commerce and industry have reduced the blueprints to nonsense. This has happened even before the final drafts have seen the light of day. In a sense, the Second Plan will be still born’.Footnote 94
Faced with a PC that resisted Mahalanobis ‘crashing into their world’, Nehru appointed a panel of economists in January 1955 ‘to advise the PC on problems connected with the preparation of the Second Five-Year Plan.’ Chaired by C.D. Deshmukh, the panel of 21 economists was divided on the merits of the plan. Many, especially the Bombay economists, disagreed fundamentally with its assumptions. Doubts were raised on a number of grounds: that it would increase savings and investment requirements beyond feasibility, the danger of inflation and balance of payments deficits arising from a shortage of consumer goods, and that it was a closed economy model that ignored the possibility the external sector offered and the possibility of obtaining capital goods more efficiently by importing them.Footnote 95 P.R. Brahmanand, the only theorist on the panel with expertise in the development implications of theoretical models, was deeply critical. His case was that the plan would not promote employment or consumption but would place the economy ‘in the groove of a tunnel whose implications would be revealed only through the passage of time’. However, then merely a junior lecturer in the University of Bombay, Brahmanand felt side-lined.Footnote 96 Vakil opposed its emphasis on heavy industry and in 1956 he, along with Brahmanand, provided an alternative to the plan in their book Planning in an Expanding Economy.Footnote 97 However, Vakil did not want the differences amongst the economists to be publicized and opposed suggestions to write a note of dissent. The panel prepared a paper on basic considerations of the plan. Though they did not openly express dissent, they did clarify to the Chair that given their differences on the plan, the paper must not be regarded as ‘approval of the Mahalanobis model by all members of the panel’. The only economist on the panel to publicly take a stand against the model was B.R. Shenoy, professor of economics, University of Gujarat. In his note of dissent, Shenoy opposed the size of the plan, deficit planning as a way of raising real resources as being dangerously inflationary and further taxation of lower income groups.Footnote 98 Shenoy distrusted the plan's heavy dependence on the government to push economic growth. He questioned the complete lack of attention to agriculture and warned that the attempt to maintain high investment rates through deficit financing would inevitably lead to a serious balance of payments problem.
Deshmukh, who chaired the panel, was himself sceptical about the inflationary effect that the shift to heavy industry would create. Under the pretext of disagreement over the States Reorganization Committee's decision on Maharashtra, he resigned from his posts as finance minister and member of the PC.Footnote 99 Friends with Mahalanobis from his days in Cambridge, he had gone along with his ideas till now but he was much less opposed to the market and he did not ‘cherish implementing’ such a plan.Footnote 100 Within the PC, K.C. Neogy wrote a minute of dissent, drawing attention to deficit financing which he felt might occur on an excessive scale.Footnote 101 There were others who opposed the plan such as the socialist leaders Jaiprakash Narain, M.R. Masani and the economist Hannan Ezekiel.Footnote 102 These dissenting voices were however silenced. The Bombay economists were henceforth exiled from economic policy discussions. As Brahmanand later recalled: ‘The period from the mid-1950s to the late 1960s was a nightmarish period for economists like me who had attacked the Mahalanobis model. Professor Vakil, myself and Shenoy were blacked out of all official meetings connected with planning. Anyone who attacked the Mahalanobis strategy was condemned as an anti-nationalist or worse, as a CIA agent.’ In the end, Mahalanobis’ great influence with Nehru ensured that his plan was adopted as the official Second Five-Year Plan.
Crisis of 1956–7 and Its Fallout
The plan period began in April 1956 although the formal plan document came later. As it happened, the Mahalanobis plan came to be overshadowed by a foreign exchange crisis. By July 1956, insiders in the government were aware that a foreign exchange crisis was brewing. The large sterling balances, which had accumulated in London during the Second World War and paid for imports in the early years after Independence, had all been used up. India's competitiveness as an exporter of raw materials and its share of world markets declined in the late 1950s, just as the prices of essential imports (food, steel, iron and capital equipment) increased. Sensing the mood, the Economic Weekly noted in August 1956:
Planners and economists in New Delhi are in a grim mood. The buoyancy generated by the Second Five-Year Plan has disappeared. Hope in the government's ability to bungle through somehow is now tinged with misgivings; ominous signs, too clear to be ignored are gathering on the horizon. Prices are rising, shortage of shipping and surface transport is getting acute, costs of projects are rising; internal resources remain inadequate and a foreign exchange crisis is in prospect.Footnote 103
As the year unfolded, the situation only worsened. In June 1957, in a secret note to the cabinet, the Ministry of Finance reported that foreign exchange reserves had fallen between March 1956 and May 1957 by a total of Rs 350 crore. In May 1957 alone, the decline was of Rs 10 crore per week and the total foreign assets of the Reserve Bank of India stood at Rs 457 crore. Officials feared that they would need to ‘draw upon the stand by credit from the IMF of Rs 35 crore in the next week or two’. The ministry submitted a forecast to the Prime Minister that the balance of payments deficit during the second half of 1957 would be Rs 220 crore even after stringent cuts in the import programme.Footnote 104 By the second half of 1957, even more alarming figures were put forth. In October 1957, India's reserves stood at Rs 328 crore, dangerously close to the statutory minimum.Footnote 105 Soon there were fears of a collapse of India's international standing.Footnote 106 T.T. Krishnamachari, now the finance minister, warned the Prime Minister that the foreign exchange situation was ‘pretty alarming’ and the economy would grind to a halt if immediate steps were not taken. The nation faced its gravest economic crisis since Independence. Urgent steps were taken to avoid a collapse. Krishnamachari, with his band of trusted civil servants such as I.G. Patel, B.K. Nehru and L.K. Jha, attended the annual meeting of the World Bank and the IMF in 1957 and visited many European capitals to raise credit. Alongside, G.D. Birla led the industrialists’ mission to Washington, DC.Footnote 107
A direct consequence of the foreign exchange crisis was the derailing of the Mahalanobis plan. As a rescue package of policy measures was put together, the finance ministry appropriated for itself the role of saviour. The crisis provided an opportunity for an attack upon the work of the PC. In a secret note to the Prime Minister, the finance ministry laid the blame squarely on the PC, saying that ‘the foreign exchange crisis is a result of the Plan itself’. The note claimed that ‘estimates of deficits as calculated by the Planning Commission were underestimates from the beginning’ because it had not ‘fully worked out’ foreign exchange costs of projects and because no allowance had been made for defence on the ground that defence lay outside the plan. Further, it was alleged that, though a large gap was built into the plan, the PC had given ‘inadequate thought’ to raising foreign exchange resources. The foreign exchange gap had been calculated independently by the PC ‘without any consultation with the External Finance Division of the Ministry of Finance’, the administrative department in charge of foreign exchange. Rather, the note claimed, the finance ministry had pointed out as early as 1955 that the plan that was being contemplated was ‘already too large for the foreign exchange resources of the country’. But this had not been heeded by the PC. Rather, ‘no directions were issued by the Planning Commission to reduce licensing in 1955 and 1956 to conserve resources for the financing of the Plan’. The ministry took credit for being the first to ‘issue warnings from time to time’ and bringing the position to the notice of the Prime Minister.Footnote 108 Krishnamachari personally complained to Nehru that the finance ministry had been kept in the dark about the financing aspects of the plan.Footnote 109 Ministry officials claimed having warned important PC personnel even before the crisis unfolded that such a problem was bound to emerge given the requirements of the plan. B.K. Nehru, one key finance ministry official, recalled personally warning Pitambar Pant, one of the grand pundits of the PC, at the time of its formulation that their ‘was no money in the kitty’; the plans were ‘absurd’; their ‘computer print outs’ were unrealistic and that the PC must ‘come down to reality’.Footnote 110
As the depth of the crisis became public, the PC became an easy target of attack from a number of quarters, even at public forums. N.V. Gadgil, Bombay economist and long-time critic of the PC, declared that it had ‘failed in almost every respect’. He alleged that it had failed to put together meaningful plans or watch their progress and had led to adoption of wrong and inappropriate policies.Footnote 111 In both the press and the Parliament, it was subjected to widespread criticism.Footnote 112 In a parliamentary debate in September 1958, member after member laid the blame for the foreign exchange crisis on the PC. Hiren Mukherjee, the influential leader of the Communist Party, said his party had warned the PC as early as in July 1955 of the problems it would soon face.Footnote 113 Member of Parliament Mohammad Imam went so far as to allege that the ‘Planning Commission has set up a trap and asked the government to walk into it’.Footnote 114 Plans were formulated ‘without any scrutiny, without any basis’. The PC was blamed for being detached from reality, for being non-consultative and short-sighted, for its ‘pigmy and unscientific methods’ and for not following advice provided by ministries and bodies such as the Finance Commission.Footnote 115 Member of Parliament Assar from Ratnagiri moved a resolution demanding the reconstitution of the PC.Footnote 116 A number of parliamentarians called for the resignation of its members which would, they claimed, be ‘the greatest service’ it could render to the country. The mood of the discussion is encapsulated in the declaration of parliamentarian Naushir Bharaucha: ‘The Planning Commission is moving in a rut. It has acquired a one track mind. It moves about round and round in maddening circles’.Footnote 117
Although the PC took the brunt of the blame for the economic crisis, insiders knew that the real culprit was the import liberalization introduced with the Export Import Policy of April 1956 by the Ministry of Commerce, then headed by none other than T.T. Krishnamachari. They knew well that, in fact, it was not the plan that led to the crisis. Although some of the projects had begun to be implemented when the plan period began (especially steel and fertilizer), there had not been enough investment in the plan projects to have resulted in a crisis so soon. Rather, it was the liberalization of imports that began before the plan itself that led to the foreign exchange crunch. Allegations were now hurled between C.D. Deshmukh, former finance minister, and Krishnamachari and civil servants such as B.K. Nehru on where the blame lay. Insiders knew it was the export import policy that had led to unrestricted and ‘abrupt liberalization’ and the foreign exchange crisis.Footnote 118 The policy had been launched by Krishnamachari, then Minister of Commerce and Industry, with a view to speeding up growth.Footnote 119 While this was well known unofficially, the reasons which were put forth in public were, as we have seen, quite different.
A direct outcome of the crisis was the shift in the centre of power from the PC to the Ministry of Finance. The PC emerged as the scapegoat and was ultimately forced to accept blame. In a ‘White Paper on Foreign Exchange Reserves’, published in March 1958, it declared after a ‘thorough appraisal’ that the crisis was ‘chiefly attributable to the attempt to carry out the Second Five-Year Plan’, the heavy demands for defence and ‘injudicious spending’ on delegations and equipment for pretentious buildings and excessive import of consumer goods. The PC agreed that there was a large foreign exchange gap and not much thought had been given on how to raise finances and frame policies to bridge the gap.Footnote 120
In such a situation, the crisis became an opportunity for the finance ministry to assert itself. It was decided that in view of the crisis the plan would be restricted to a minimum ‘core’. The task of defining the ‘core’ fell to finance ministry officials led by B. K. Nehru, even though the prime minister had wanted the PC to deal with this. B. K. Nehru later confessed that he spent a fortnight engaged in ‘the most cruel infanticide’ in which development projects worth an estimated $630 million dollars were shelved.Footnote 121 The finance ministry was also entrusted with the task of preparing a foreign exchange budget for the watered down plan. Interestingly, foreign exchange budgeting was again entrusted to civil servants within the Ministry of Finance and not to the Economic Division.Footnote 122
Summing Up
This experience of the 1956–57 foreign exchange crisis and the manner in which it was handled marked a decisive shift in institutional arrangements of power. The locus of decision-making shifted away from the PC to the Ministry of Finance. The experience also ended all the ‘glamour of planning’ and there were few grandiose schemes thereafter. Mahalanobis himself lost all interest soon after submitting his famous model. Much to the astonishment of his colleagues at the ISI, he withdrew from all active involvement with planning. He fell out with Nehru thereafter because of differences over the working of the PC.Footnote 123 Mahalanobis’ disciple Pitambar Pant now spoke of basic needs and income distribution and the objectives of employment and better distribution of income became paramount once again.Footnote 124 The grand Mahalanobis plan was never seriously implemented. The changed priorities were apparent when Mahalanobis himself chaired a committee on the distribution of income. As I.G. Patel recalls: ‘Truth to tell, the enthusiasm for planning and bold plans which abated then never really caught a second breath in India.’ What remained of planning despite the continuing five-year plans, was little more than budgeting for central and state expenditures.
By the time the Third Five-Year Plan was formulated, the finance ministry was in full control. The fate of planning rested in the ministry's corridors and the credit it could raise. Finance minister Morarji Desai cautioned the Prime Minister to set realistic targets and not be driven by political expediency in raising plan estimates. He made clear that resources must be calculated on the basis of facts, rather than speculation. As he recalled: ‘I said that the Finance Ministry could not adopt the methods of the stock and share brokers association’.Footnote 125 Officials in the finance ministry were asked by senior members of the PC including Deputy Chairman ‘would we or would we not be able to have a Third Plan or were we simply building castles in the air’.Footnote 126
The PC of course continued to function and the façade of planning was kept up with input-output models, perspective planning, optimisation, etc. It continued to be involved in the distribution of financial resources between the centre and the states, something which the Finance Commission could well have done. Five-year plans continued to be produced in the decades that followed but the heyday of the ‘mighty adventure’ of planning had passed. As events unfolded in the 1960s, the war with China and the demise of Nehru, followed by the Shastri interregnum, created a context in which planning was accorded a lower priority. Shastri was himself sceptical of all centralized planning and within months of assuming office appointed a National Planning Council widely seen as a rival to the PC.Footnote 127 In 1966, the work of the PC came under the scrutiny of the Administrative Reforms Commission. The Ministry of Finance and the Ministry of Commerce and Industry continued its struggles with the PC. Later, Krishnamachari likened the PC to the meddlesome and opinionated Jeeves, the P.G. Wodehouse character, ever ready with solutions to set everything right.Footnote 128
To sum up, this essay has argued that planning as an idea and as a process could not be strongly institutionalised and in this experience, the decade of the 1950s was formative. Further, over time there occurred a blurring of the distinction between developmental planning as embodied in the planning process and general policies of economic management pursued by the government. Further, the experience of the 1950s showed that planning meant different things to different people. Protagonists of very different orientations and ideological leanings appropriated planning to the language they used to refer to development. No strong consensus emerged in the 1950s and even later in the 1960s over the nature, direction and scope of planning and individual ideas, influences and political exigencies were decisive. This may help us rethink some of our perceptions about India's experiences with developmental planning in the twentieth century.
Acknowledgements
I would like to thank Anthony Low for his critical comments and his support and Kaushik Basu and G. Balachandran for their encouragement.
