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Contributions of Jawaharlal Nehru to Indian Economy

The following points highlight the top twenty-five contributions of Jawaharlal Nehru to Indian economy. Some of the contributions are: 1. National Philosophy of India 2. National Unity 3. Parliamentary Democracy 4. Industrialisation 5. Socialism 6. Scientific Temper 7. Secularism 8. Non-Alignment 9. The Nehru Strategy 10. Industrial Development and Others.

Contribution # 1. National Philosophy of India:

For Jawaharlal Nehru, every State needed a ‘National Philosophy or ‘national ideology’ to hold it together and give it coherence and sense of direction and purpose. In his view the need for such a philosophy was particularly great in a new country like India whose people were divided on religious, ethnic, linguistic and other grounds, economically undeveloped, socially static and politically inexperienced.

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As such they desperately needed a shared public philosophy to unit them and provide them with a set of clearly defined ‘goals’ or ‘objectives’. As India’s first Prime Minister he thought it one of his most important task to develop such a national philosophy.

Like most nationalist leaders Nehru was convinced that India had become deeply degenerate and required radical restructuring. Its regeneration consisted in modernising itself along the lines of modern European societies, which too had, for centuries, remained degenerate and turned the corner in the nineteenth century by comprehensively reorganizing themselves along the lines required by the modern industrial civilisation. For Nehru ‘modernisation’ was India’s national philosophy and involved seven ‘national goals’, namely, national unity, parliamentary democracy, industrialisation, socialism, development of the scientific temper, secularism and non-alignment.

Contribution # 2. National Unity:

For Nehru national unity or what he sometimes called national integration was the sine qua non of national independence. ‘We must give topmost priority to the development of a sense of unity in India because these are critical days’.

Over the centuries India had fallen prey to foreign rule because of such factors as the lack of a strong central government underpinned by a nationwide structure of authority, narrow regional loyalties, divisions among its people sometimes so deep that they did not mind inviting outside help to settle old scores, and the absence of pubic spirit and patriotism.

Unless India put these right, it was doomed. Nehru thought that the Constitution of India had taken care of some of them and for the first time in its history given it a strong state, reconciling the regional aspirations for autonomy with the need for a central government strong enough to hold them all together and protect them against external threats.

Contribution # 3. Parliamentary Democracy:

Parliamentary democracy was the second ‘national goal’ for Nehru. He was convinced that India needed a democratic form of government not only because the latter respected the Individual and was inherently desirable, but also because a diverse, vast and divided country could not be held together and governed in any other way.

He also thought that it, especially the national and state elections, had the great advantage of drawing the masses into the conduct of public affairs and giving them a stake in the new polity. Nehru knew that parliamentary democracy depend for its success on a strong and united opposition, and that India not only had none but was unlikely to have one for some time.

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Since he was convinced that it was the only appropriate form of government for India, he explored ways of compensating for the absence of opposition. He regularly consulted and briefed opposition leaders, and unsuccessfully tried to involve them in supervising the work of government departments.

He urged his party to think of itself in national terms, encouraged vigorous internal debates and even welcomed dissent. On many occasions he internalised the opposition and himself acted as the leader of opposition, publicly criticising his colleagues and even himself and acknowledging his mistakes….

He also encouraged the press to play the appositional role and chided chief ministers who tried to penalize over critical journalists. None of these came anywhere near filling the role of a strong opposition party but they did humanize the exercise of power and introduce a moderate degree of check on its abuse.

Contribution # 4. Industrialisation:

Industrialisation was the third component of the national ideology. Though Nehru was persuaded that India needed to encourage cottage and small-scale industries to ease the problems of poverty and unemployment, he saw them as a temporary expedient only necessary until the country became fully industrialised.

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Unlike Gandhi he was convinced that India could not permanently eliminate poverty and satisfy the legitimate aspirations of its people without large-scale industrialisation. More importantly the modern world was industrialised, and a country that failed to keep pace with it remained weak and vulnerable to foreign domination.

For Nehru industry, not agriculture, was the lever of economic development. He thought that industry-led growth transformed the economy far more quickly and effectively than agriculture-led growth. For Nehru agriculture was a primitive and culturally inferior activity.

It was tied to land, parasitic upon the forces of nature, made man a plaything of nature and encouraged ‘fatalistic’ and ‘obscurantism’ ways of thought. It also fragmented the country, confined man’s vision to the narrow limits of his village, and was a breeding ground of ignorance, traditionalism, passivity, narrow- mindedness and superstition.

As such it lacked the power and energy to haul the country out of its ‘traditional grooves’ and ‘propel’ it along the path of modern ways of life and thought. As Nehru repeatedly argued, villages had been responsible for India’s degeneration and changing their ‘antiquated’ ideas and habits was the ‘very basic problem’ of independent India. He did not therefore think much of agriculture as an activity and of the peasantry as a social class.

Contribution # 5. Socialism:

For Nehru socialism was both a ‘scientific method of social analysis and a normative doctrine describing a ‘desirable’ society. Like Marx, by whom he was once deeply influenced, he found it difficult to integrate the two and ran into all kinds of difficulties.

For Nehru the ‘socialist method’ explained phenomena no other method could. The British had colonised India not in a fit of absent-mindedness, nor to ‘civilize’ its people, but to procure cheap raw material and a captive market for their goods.

Nehru remained a socialist all his adult life and entertained the same broad view of it. For him socialism was not just an economic doctrine, nor just a form of social organisation, but a ‘new civilisation’ based on a radically transformed ‘humanity’. It was classless, democratic, provided the material and moral conditions necessary for the fullest development of the human potential, and encouraged co­operative and non-acquisitive impulses.

Production was planned, organised on co-operative lines, and directed towards the satisfaction of human needs rather than accumulation of profit, and the basic freedoms and rights of citizens were fully guaranteed.

It was striking that unlike Marx and other socialists, Nehru did not define man as a producing being, or place much emphasis on popular participation, egalitarianism, gradual withering away of the state class struggle and new forms of communal living. His socialism was basically aesthetic and liberal, concentrating on the individual rather than the community and stressing self-expression, individuality, social justice and human creativity.

Contribution # 6. Scientific Temper:

The fifth national goal consisted in the cultivation of the ‘scientific temper’, ‘culture’ or ‘approach to life’. By this Nehru meant not so much the development of science and technology, which was but a part and product of it, as fostering rational and empirical ways of thought and life. For nearly a millennium India had remained in ‘deep slumber’ and come to grief because it had become dogmatic, mystical, speculative, uncritical, inward-looking and addicted to undisciplined fantasy.

If it was to turn the corner and become a strong and vibrant society like Europe, it had to learn to think and behave scientifically. Nehru’s view of scientific thinking was fairly conventional. It involved checking and relying on facts alone, taking nothing on ‘blind trust’ or faith, changing beliefs in the light of new evidence, being precise and exact, relying on the method of trial and error, ceaselessly searching for truth, keeping an open mind, and in general developing the ‘hard discipline of the mind’ characteristic of the ‘modern age’.

Such an approach applied to beliefs as much as to social practices. Nehru advocated economic planning on the ground that it was the only scientific way of running the economy.

Contribution # 7. Secularism:

Nehru vigorously pleaded for a secular state, but his view of secularism was complex and vague. He distinguished between the spiritual and ideological-cum-institutional dimensions of religion. He was intensely hostile to the latter but deeply sympathetic to the former, especially during the pre-independence days and the last years of his Prime Minister-ship.

Though he frequently talked about spirituality, he never clearly defined the term. Sometimes he equated it with morality. On other occasions he used it to refer to concern with the nature and destiny of man and the meaning and purpose of life; to be spiritual was to be sensitive to these important and ‘irrepressible’ questions. On yet other occasions Nehru gave the term substantive content and took it to mean a broadly advaita metaphysic, spirituality consisted in recognising the presence of a creative force or vital energy at work in all living beings and appreciating the unity of life.

Contribution # 8. Non-Alignment:

International affairs were Nehru’s favorite area of interest. During the independence struggle he constantly drew his countrymen’s attention to their vital importance, and was the principal architect of many an important Congress resolutions on international subjects. During his period in office as prime minister he remained his own foreign minister.

Nehru insisted that India should follow an independent foreign policy, He justified this on three grounds.

First, it was a necessary expression and an indispensable means of preserving Indian independence.

Second, it was the only common ground on which Indians of different ideological persuasions could be united.

Third India could not mediate between the superpowers, mobilise world opinion on important issues, retain a fresh and pragmatic perspective on world affairs, open up and reconstitute the rigid international system on a broader basis, and speak for the third world if it aligned itself to one of the power blocs.

Thanks to Nehru’s foreign policy, India acquired high political visibility and played a creative international role. It mediated and contributed towards a better understanding between the two superpowers and between the metropolitan countries and their ex-colonies.

It brought the countries of the third world together, helped forge common bonds between them, and made them a moderately effective world force. India also linked up with the progressive elements in the west and helped create a powerful world opinion in favour of peaceful co-existence and the economic development and territorial integrity of the new nations.

Contribution # 9. The Nehru Strategy:

The principal components of the Nehru Strategy of building modern India were the institution and strengthening of the planning process, establishment of the public sector in Industry, laying the base of modern agriculture by the overthrow of the feudal system, creation of a modern scientific and technological base and attainment of economic independence by systematic development of heavy and basic industries and maximum development of our natural and human resources.

Within the framework of mixed economy, the public sector was to be built up to attain the commanding heights of the economy’. The concept of mixed economy itself was, and remains valid for mobilising all productive classes including the national bourgeoisie for promoting sustained and rapid economic growth.

In the rural areas, while the concept of private ownership of land was an indispensable element for ushering in modernisation of agriculture, a co-operative sector was promoted along with the community development organisations to assist the process of social transformation.

Politically the strategy implied an alliance of all productive classes, including owners of property. Hence the broad anti-imperialist alliance forged by Gandhiji was continued. This continuity imparted a great deal of strength to the process of modernisation in the initial stages.

Contribution # 10. Industrial Development: Policy and Relation:

India must be industrialised as rapidly as possible. And industrialisation includes, of course, all kinds of industry—major, middling, small, village and cottage. However, rapid our industrialisation may be, it cannot possibly absorb more than a small part of the population of this country in the next ten, twenty or even thirty years. Hundreds of millions will remain who have to be employed chiefly in agriculture.

These people must, in addition, be given employment in smaller industries like cottage industries and so on. Hence, the importance to agriculture and food and matters pertaining to agriculture. If agricultural foundation is not strong then the industry will not have a strong basis either. Certain basic and key industries have been given due consideration. The essential basis for development of industry is power-electric power. The progress made by a country can be judged by the electric power it has.

There is much discussion about the public sector and the private sector. He attached great importance to the public sector. The pattern of society that he look forward to is a socialist pattern of society that he looks forward to is a socialist pattern of society which is classless, casteless.

As the socialist pattern grows, there is bound to be more and more nationalized industry, but what is important is not that there should be an attempt to nationalize everything, but higher production and employment. In a country like India, where money, trained personnel and experience are lacking, we have to take advantage of such experience, training and money as we have. We want to make this business of building up India a co-operative enterprise of all the people.

Some people might talk about private enterprise and laissez faire, but practically nobody now believes in laissez faire. There is regulation and control all-over the world in regard to industry and imports and exports. Everywhere, even in the most highly developed countries of the capitalist economy, the State functions in a way which possibly a socialist fifty years ago did not dream of.

Contribution # 11. Industrial Relations:

This business of strikes and lock-outs should be faced. Apart from the wastage involved, this conflict is illogical and wrong. The only other way is to find mutual agreement, or if there is no mutual agreement, to bring in some third party in the shape of conciliator, arbitrator or tribunal.

Contribution # 12. The Poverty Barrier:

India is struggling to get out of the morass of poverty, and to reach the stage of what is called “the take-off into sustained economic growth”. It wants to cross the barrier of poverty and reach the stage where growth becomes relatively spontaneous. The under-developed country is on this side of the barrier.

There are certain cumulative processes at work which in a developed country, tend to encourage its growth further and further and which, in an under-developed country, pull it back all the time. The poor becomes poorer. Poverty becomes is own curse. It repeats itself. Planning is essentially a process whereby we stop those cumulative forces at work which make the poor poorer, and start a new series cumulative forces which make them get over that difficulty.

Defence:

Defence does not consist in people going about marching up and down the road with guns and other weapons. Defence consists today in a country being industrially prepared for producing the goods and equipment of defence.

You cannot have a factory producing tanks in the absence of other industrial development in the country. A factory producing aircraft can be created only, if there is large supply of technically trained people. Therefore, the immediate object should be, both from the point of view of economic development and that of defence, to build up industry, heavy industry in particular.

Socialism:

All individuals in India should have equal opportunities of growth, from birth upwards, and equal opportunities for work according to their capacity. The process of bringing socialism to India, especially in the democratic way, will inevitably take time.

Public Sector:

It is interesting to see other countries where there are public enterprises; there they have arrived at the conclusion that they must give freedom to the man in charge. Of course, if there is a major loss, if the whole thing goes to pieces, then the man in charge will suffer. But the point is that he is given responsibility. Every person who has advised us, whether he is an American like Dr. Appleby or a great Russian leader like Mr. Mikoyan, has told, us: ‘Do not interfere with your enterprises give your executive responsibility. Do not interfere”.

Population Control:

Some kind of limitation of the rapidly growing population becomes an urgent matter. It was for this reason that India was driven to consider this question of family planning as a part of national planning. If educational standards in the country go up, the problem becomes simpler. If the general living and economic conditions improve, it becomes simpler again. This fact should be appreciated because then the movement of family planning becomes a part of the larger movement for raising the standard of living of the people.

Price Control:

It goes without saying that it is of utmost importance that prices should be under control. But a price policy is not separated from fiscal or monetary or commercial policy, and it might well involve controls. In certain essential articles, if necessary, it may involve all kinds of approaches including controls.

Deficit Financing:

Finance is important but not so important as people think. What is really important is drawing up the physical needs of the people and then working to produce things which will fulfill such needs. If you are producing wealth, it does not matter very much if you have some deficit financing because you are actually putting money back through goods and services. Therefore, it does not matter how you manipulate your currency so long as your production is also keeping pace with it. Of course there is the fear of inflation. We must avoid it.

Contribution # 13. Importance of Technicians:

Scientific and technical personal should be introduced not only in the technical processes but in administration also. The administrator is an able man and does a good deal but his thinking is on different lines from that of a technical man. There should be a greater inclusion of the technical and scientific type of thinking in administration. It is good to mix the pure administrator with the technical man and the scientific man.

After all, all problems today are problems of science and technology. An able administrator or an able politician, just as an enable lawyer, can grasp the broad outlines of a problem, but it is another thing to have grown up with all the processes. Therefore, the scientists and technicians should be associated more and more with administration and planning.

Contribution # 14. Women’s Progress:

A social revolution includes everyone, but it especially pertains to women. If the women do not change or progress, social life remains more or less static. And one of the most interesting and far- reaching changes which are coming over India today is the change among the women of India. It has occurred to a great extent in regard to women in cities and towns and has begun even in the rural parts of our country. Once it spread adequately in the villages, this social revolution will bring tremendous results.

Contribution # 15. Rural Development:

Over 80 per cent of our people live in villages. India is poor because the villagers of India are poor. India will be rich if the villages of India are rich. Therefore, the basic problem of India is to remove the poverty from the Indian villages. Firstly, each village should have a semi-autonomous panchayat. It should have a co-operative. It should have a school.

The co-operatives have in the past been chiefly societies for credit purposes. But the co-operative should perform many other services. While the panchayat will represent the administrative aspect of village life, the co-operative will represent the economic side of village life.

Contribution # 16. Land Reforms:

A proper land policy is essential for the progress of agriculture. We have gone some way towards achieving this by putting an end to the zamindari and jagirdari systems in many states. We must complete this task, eliminate all intermediaries and fix a limit for the size of holdings. We hope that the next step will be co-operative farming which will take advantage of the latest agricultural techniques.

Contribution # 17. Employment:

Every modern economic theory today bases itself, unlike the previous ones, on full employment in the country. We cannot produce employment by legislation. Our economic approach must be such that we can reach the stage of full employment within a measurable period of time. Every one of our steps must be aimed at that.

Contribution # 18. Education:

According to Nehru: “Right education must be all round development of the human being, harmonizing of our internal conflicts and a capacity to co-operate with others.” Nehru attached great importance to the practical aspect of education. Examination oriented education was never favoured by Nehru, He attached more importance to real education; and by that he do not mean examinations and the like.

In his opinion proper intellectual training is essential to do anything efficiently; but far more important is the background of this training—the habits, ideals, ideas, objective the internal harmony, the capacity for co-operation, the strength to be true to what one considers to be right, the absence of fear. Real education, according to Nehru, aims at, “internal freedom and fearlessness. Time and again he reiterated that education divorced from life can never be of any use. “After-all education is meant to fit you for life, that is to say, not only your narrow spheres but you will have later on understand the big problems of life”.

Of late a lot of fuss has been made about value oriented education. However, only a vague idea is conveyed through this phrase. It is interesting to note that Nehru was fairly free from doubts as to the value education aimed at. There is not a great difference between his and Gandhi’s conception. Both insist the individual virtues to be inculcated, however, the former gives no less importance to the social aspect. He hates an education system that reduces a human being to a bookworm or an island by himself. The greatest value on can expect from academic training is the feeling of co-operation and equality.

Nehru always warned as against inaction and indolence. ‘Aram Haram Hai’ was his ever- echoing watchword. In his opinion, the greatest feat of education would be to make people shrug their lethargy off and work ceaselessly for the welfare of society. Dignity of labour was considered by him much greater than higher intellectual pursuits.

Contribution # 19. Nationalism:

Nehru’s nationalism was free from all bigotry and narrow-mindedness. He had evolved so healthy an outlook that it was impossible for him to confine his interests to his own nation. Humanity, love and justice were the values he was all for. However, he was like any other nationalist against the British rule in India. He could never get condescend to the unjust laws and administration of the British. His love for India was deeply romantic and emotional.

At the same time he was seriously concerned about the well-being of the Nation. And to this cause he was fully dedicated. All sufferings and troubles he sustained for this very cause. Naturally his ideals of education is closely associated with nationalism.

Nationalistic education he thought, must come from the national genius. To Nehru, devotion to learning was meaningless in the absence of devotion to the nation. The immediate and recognisable unit of society is nation and therefore nation and society are synonymous.

Though the first job of a student is to train himself for future, his indifference to politics is undesirable. ‘The pressure of political circumstances’ and ‘the stranglehold of economic conditions’ deny the opportunity of education to vast masses of people. A national awareness, as such, was necessary in order to create a favourable atmosphere for proper education. But it does not mean only politicians are the builders of India’s destiny.

The academic including students and teachers also have an important rather seminal role to play in the reconstruction of the nation. Politicians and states men may strive for political and economic changes but they can’t play the part of foundation layers. ‘The real basis’ of that society must be laid in the teachings of our schools and colleges.

Art and culture, though not so important as science and technology, are very essential for the general refinement of a people’s attitude and ways of life. Nehru never undermined the value of art. In his opinion art and culture are necessary to make a complete man or a woman. They give a grace of life and broaden view-span.

However, too much concentration on the artistic side does not let us keep with the fast progressing world. We cannot go on living and relieving our past. Nehru’s progressive thoughts, though deeply influenced by the industrial world of the west, were not very different from those of Gandhiji.

The latter believed in small scale technology with a special weight on individual effort, while Nehru insisted on socialistic pattern of industrialism, this is the reason that Nehru put art and culture in the second place.

Nehru’s views on women’s education are reflected specially in his letters to his daughter. He was directly related to this problem. Though he never imposed his ideas on her, he expressed frankly what he thought and meant by education for women.

He disliked the education which prepared a girl to play a part in the drawing room and nowhere else. Women had an equal role to play in the making of the nation. He treats women on par with men in every walk of life.

Contribution # 20. Non-Violence:

Gandhiji’s abhorrence for violence was shared by Nehru even if he did not accept nonviolence as a creed. Gandhiji told Fischer, “I am a social revolutionist. Violence is bred by inequality, non­violence by equality”. Nehru took a historical view of violence.

He told the Lok Sabha in 1954, “Where upheavals occur they are products of history, and violence, defeat and civil war govern the subsequent events. Some Hon members seem to think that in order to have progress they must destroy. They think that by increasing the conflict and bitterness they can have a clean slate to write upon. No country has ever had a clean slate to write upon, not even after the biggest of revolutions. No one should deliberately destroy something which is worthwhile in order to build something which may be good in certain circumstances”.

His objection to communism was its emphasis on violence. “Communism charges the capitalist structure of society with violence and class-conflict. I think this is essentially correct. The question is how to get rid of inequality and have a classless society with equal opportunities for all. Can this be achieved through methods of violence, or is it possible to bring about changes through peaceful methods? Communism has definitely allied itself to the approach of violence. Even if it does not indulge normally in violence, its language is of violence, its thought is violent”. He repeatedly said, “We want to do away with classes, but by the method of winning over people. I admit class struggle, but I do not want to aggravate it. I do not want to be obsessed with it. I want to get rid of it as far as possible without aggravating it”.

Contribution # 21. Mixed Economy:

It was precisely to avoid a violent eruption of class struggle in the country that Jawaharlal Nehru opted for a mixed economy. He repeatedly pointed out that acquisitive society and the “free enterprise system” had outlived their relevance and were controlled and restrained even in the countries in which they first came up.

He emphasised that the “strongest urge today is for social justice and equality”, and unless the state responded to it “it might well become a police state”. But he also saw that fully controlled economies led to authoritarianism and totalitarianism which he regarded as irrational growths. He was faced with another dilemma.

From the historical point of view he saw that the ‘shell’ of the Indian system was capitalistic while its ‘essence’ remained feudal; in this context the slow pace of growth that would take place without the state taking on certain economic responsibilities would lead to “monopolies and aggregations of economic power”.

At the same time, he realised, as he told the Lok Sabha once, “the price paid for rapid industrialisation has been terrific in some socialist countries. I am certain no country with any kind of parliamentary democracy can possibly pay it”. He wanted India to be a parliamentary democracy for various reasons, but he knew that “if there is economic inequality in the country all the political democracy and all the adult suffrage in the world cannot bring about real democracy”.

At one stage he was even prepared for adjustments in the political system to meet the demands of the task of building a non-acquisitive and egalitarian society, but he emphasised that “political democracy will only justify itself if ultimately succeeded in producing these results”—by ‘these’ he meant economic advance in a manner that social tensions (including class war) were reduced and finally defused.

Mixed economy was his answer to the problem of planning economic advance in a democratic set-up. Besides, he believed that “change is essential, but continuity is also essential. The future has to be built on the foundations laid in the past and the present. To deny the past and break with it completely is to uproot ourselves and, sapless, dry up”. Mixed economy was to be his instrument of change without a break with continuity.

Transition from feudalism had not been accomplished anywhere without a break caused by industrial revolution which had taken place in western countries before they took to democracy and in socialist countries in conditions in which civil liberties were not available to their citizens.

It was an uncharted path that he took, and he made it clear that, for India, planning was to be a method of trial and error; he had no ready-made model before him but he was sure that India would learn from the mistakes of others. But mixed economy was not an end in itself.

As early as 1948 when he was not even sure of how to describe it (“call it what you like—mixed economy or something else”), he was clear that it was to be a “transitional stage of economy”. He also felt that the transition was not to be smooth. “I rather doubt myself whether it is possible without a conflict or repeated conflicts to bring about these changes because people who are used to possessing certain interests or certain ideas do not easily accept new ideas, and nobody likes to give up what he has, at least no groups like it; individuals sometimes do”. His doubts were not unjustified; during the years since he spoke, the conflicts which, he thought, would arise did come to the fore resulting in distortion in the path he sought to pursue.

Contribution # 22. Planning:

The leadership of Jawaharlal Nehru as the Chairman of the National Planning Committee (NPC) set up in 1938 gave a great impetus to thinking on planning in the country. While articulating the concept of planning Nehru was no doubt impressed by Russian experiment. But he had all the realisation of difficulties associated with such kind of experiment.

He had a very deep understanding of the world history as can be seen from his Glimpses of World History. But his concept of planning never claimed to have its origin in doctrinaire philosophy of history. What he understood by a planned economy was a regime where things could be made to happen through foresight, goodwill and co­operation. In contrast, in market economy things just happen.

Though Nehru was impressed by the experiment of Russian Revolution, when it came to the selection of suitable option for development of independent India, he preferred “Mixed economy” model. His concept of planning envisaged that people’s participation should be ensured at every stage.

The things which are going to affect the people, may be decided and moulded by them in perfectly democratic way. That is, his concept of planning was democratic planning. In the articulation of the concept of planning in India, he strongly favoured democratic framework which ensures that things are decided in a co-operative manner, seeking the willingness of all concerned. Nehru tried to keep away the element of ‘coercion’ in the concept of planning.

Nehru’s contribution in the articulation of the concept of planning has been best summarised by Dr. P.C. Mahalnobis as follows:

“Under the leadership of Nehru, India made big advances. He initiated thinking on planning in India. Through his speeches and through planning committees and the Planning Commission, he has exercised a profound educative influence and made India conscious of the need for national planning, Through the Congress Party and the Government, he has made planning an instrument of national policy on the biggest scale outside the communist countries, and has persuaded India to accept socialism as her goal. He has brought to Indian planning a full appreciation of the scientific revolution which is transforming the world, a sensitive awareness of human values and cultural traditions, an inherent sense of democracy and an international outlook”.

The Planning Commission of India is the brainchild of Jawaharlal Nehru. Nehru exercised a tremendous political will in the formation of Planning Commission which was to chalk out the course of planned development not only for Central Government but also for State Governments. This was more so in the light of quasi federal structure of Indian Constitution.

When Nehru inducted Dr. P.C. Mahalnobis into the Planning Commission, he wanted to ensure that planning process in India should be scientific, based on facts and figures. He had the foresight in realising that adequate and accurate statistics formed the basis of planning. The National Sample Survey started in 1950 is a testimony to this.

Contribution # 23. Perspective Planning:

(1) We are to build up, by democratic means, a rapidly expanding and technologically progressive economy;

(2) we are to establish a social order based on social justice and offering equal opportunity to every citizen. These objectives have to be kept in view all the time. Therefore, it is necessary to have not only a Five Year Plan, but a plan with longer perspective.

When it came to the question of ‘Planning from below’, Nehru envisaged the machinery of Panchayat Raj Institution, i.e. three tier system of democratic decentralisation. These Panchayati Raj Institutions or local-self-governments were entrusted with the responsibility of chalking out suitable plans at the block level and initiation of Community Development projects. Nehru’s idea of planning was sufficiently flexible to accommodate any change suitable to local needs.

When he was convinced that adequate degree of powers must be vested with local institutions, he showed political courage to create that type of machinery. His attempt was to create necessary framework to carry out the experiment of planning in India.

He was open to any suggestions since he wanted that planning should not be merely blueprint but a way of life of people. He wanted that institutional framework for carrying out planning which will ensure adequate degree of involvement of people for whose welfare plans are being prepared.

Contribution # 24. Institutional Reforms:

At the time of implementation of the second Five Year Plan, Nehru strongly felt that the objectives of planning will not be fulfilled unless institutional reforms are introduced with political courage. The decision to introduce these institutional reforms was certainly with some political cost which he readily accepted.

At this stage in the country’s development, he felt concerned at slow progress in carrying out co-operative farming and in implementing the programme for land reforms. On both these issues, there had been considerable discussion at the highest level and Nehru threw his decisive weight on the side of co-operative farming and agrarian reforms.

The second plan had envisaged such essential steps being taken as would provide sound foundations for co-operative farming so that over a period of ten years or so, a substantial proportion of agricultural lands could be cultivated on co­operative lines. Similar proposals were made in the plan to adopt common approach for land reforms to be accepted and pursued by each state as a part of National plan. These institutional reforms were accepted by various States only because of Nehru’s political will and stature.

It may be noted that the contribution of Nehru lies in the fact that he not only popularized the concept of planning but created appropriate institutional structure within which working relations between the Centre and the States were directed and regulated.

He created a machinery like Planning Commission and body like National Development Council which could translate has vision into reality. It was not only he aspect of deep commitment and scientific outlook which made planning a successful experiment, but it was more his political will which could give planning a concrete expression in Indian context.

While evaluating Nehru’s contribution to Indian planning many a time, we blame Nehru for the failures of planning. In our vein of criticism, we produce the statistics of families below the poverty line. But it may be borne in mind that Nehru provided us scientific methods of planning and necessary tools for achieving our goals. If these tools are not successful, the fault lies with us and not with Jawaharlal Nehru.

Contribution # 25. Use of Foreign Capital:

Nehru believed that for financing our plans foreign capital was essential and could benefit India in its industrial growth as it had benefitted America. After the new Industrial Policy Resolution of 1948, then Prime Minister Nehru announced on 6th April 1949, “Indian capital needs to be supplemented by foreign capital not only because our material savings will not be enough for the rapid development of the country on the scale we wish, but also because in many cases scientific, technical and industrial knowledge and capital equipment can better be secured along with foreign capital”.

The position was also cleared by the Prime Minister as regards the remittance of profits and the repatriation of capital and it was pointed out that in case of nationalisation fair and equitable compensation would be paid. Dr. P.S. Loknathan, former Director General, National Council of Applied Economic Research, while delivering the Jawahar Lal Nehru Memorial Lectures organised by the University of Rajasthan on the “Economic Philosophy of Nehru” in Feb. 1968 said the late Prime Minister Nehru discovered in the wake of the Chinese aggression that ‘there is a price to be paid for foreign aid and capital”. Dr. Loknathan pointed out that Nehru’s attitude to the entry of foreign private Capital into India was essentially ‘pragmatic’.

Nehru after independence had gained confidence in the ability of independent India to utilise foreign capital without fear of being dominated politically or economically. Whether the confidence was justified or not is debatable but this cannot be disputed that no one besides Nehru could have obtained so much foreign capital without losing the country’s independent policies.

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