Class 12 Political Science Notes Chapter 3 (Politics of planned development) – Political Science-II Book

Alright class, let's delve into Chapter 3: 'Politics of Planned Development'. This chapter is crucial for understanding the economic path India chose after Independence and the political debates surrounding it. Pay close attention, as these concepts frequently appear in government exams.

Chapter 3: Politics of Planned Development - Detailed Notes

1. Context: The Challenge of Development Post-Independence

• Inherited Economy: India inherited a backward, stagnant, and agricultural economy from the British, marked by low productivity, poverty, and inequality.
• Development Models: The newly independent leadership faced a choice between two dominant models:
  • Liberal-Capitalist Model: Followed by much of Europe and the US, emphasizing private ownership and market forces.
  • Socialist Model: Followed by the USSR, emphasizing state ownership, control, and planning.
• India's Choice - A 'Mixed Economy': India opted for a 'mixed economy', attempting to combine the best features of both models. It allowed for private property and enterprise but envisioned a significant role for the state in planning and directing the economy, especially in key sectors.
• Consensus on Development: There was a broad consensus among political parties and leaders that development couldn't be left entirely to private actors and that the state needed to play a central role through planning. The goal was economic growth combined with social and economic justice.

2. The Idea of Planning

• Inspiration: The idea of planned development gained global popularity post the Great Depression (1930s) and was notably successful in the Soviet Union's rapid industrialization.
• Bombay Plan (1944): Even before Independence, a section of leading industrialists drafted a joint proposal for setting up a planned economy in India, known as the Bombay Plan. This indicated that the idea of state intervention had support beyond just socialist thinkers.
• Planning Commission (Established March 1950):
  • Set up by a simple resolution of the Government of India (not a constitutional or statutory body initially).
  • Role: To formulate plans for the most effective and balanced utilization of the country's resources.
  • Chairperson: The Prime Minister.
  • It became the most influential body in shaping India's economy for decades.
• National Development Council (NDC - Established August 1952): Formed to ensure cooperation between the Planning Commission and the States. Included the PM, Union Cabinet Ministers, Chief Ministers of all States, and Members of the Planning Commission. Its role was to approve the Five Year Plans.

3. The Five Year Plans (FYPs)

• Concept: A centralized and integrated national economic program spanning five years, outlining objectives, resource allocation, and targets.
• First Five Year Plan (1951-1956):
  • Drafted by: Economist K.N. Raj.
  • Primary Focus: Agriculture, including investments in dams and irrigation (e.g., Bhakra-Nangal Dam). Addressed the urgent need for food security and controlling inflation post-partition disruptions.
  • Approach: Cautious, emphasizing patience and gradual development ("hasten slowly"). Focused on rebuilding the economy hit by partition.
  • Land Reforms: Initiated land reforms as a key element for agricultural development and equity, though implementation varied across states.
• Second Five Year Plan (1956-1961):
  • Drafted under the leadership of: P.C. Mahalanobis (founder of the Indian Statistical Institute). Often called the Mahalanobis Plan.
  • Primary Focus: Rapid Industrialisation, particularly heavy industries (steel, machinery, power) under public sector control. Based on the idea that industrial development was key to long-term growth.
  • Strategy: Import substitution – encouraging domestic production of goods previously imported. This required protecting domestic industries through tariffs.
  • Challenges: Required huge capital investment, technological know-how (often imported), and put pressure on foreign exchange reserves. Agriculture received relatively less priority, leading to food shortages later.

4. Key Controversies

• Agriculture vs. Industry:
  • Critics (like Gandhian economists J.C. Kumarappa) argued that the emphasis on heavy industry neglected agriculture and rural development, which employed the majority of the population.
  • Others argued that without a strong industrial base, agricultural growth itself would be limited and India would remain dependent.
  • The lack of sufficient investment in agriculture during the Second Plan contributed to a food crisis later.
• Public Sector vs. Private Sector:
  • The plans emphasized a leading role for the public sector, controlling strategic industries ('commanding heights' of the economy).
  • Critics argued this stifled private enterprise, led to inefficiency, corruption ('license permit raj'), and created state monopolies.
  • Supporters argued the private sector lacked the capital and willingness to invest in large, long-gestation infrastructure and heavy industry projects crucial for development, and state control was necessary for equity.

5. Major Outcomes

• Foundations of Economic Growth:
  • The early plans laid the foundation for India's future economic growth by building crucial infrastructure (dams, power plants, steel plants, communication networks).
  • Institutions for science and technology research were established.
• Land Reforms:
  • Aimed at abolishing the colonial zamindari system and distributing land to the tiller.
  • Success was partial and varied greatly across states due to legal loopholes, political resistance from landowners, and implementation issues.
  • Consolidation of land holdings was another aspect, often more successful.
• The Green Revolution (Mid-1960s onwards):
  • Context: Food shortages, dependence on US food aid (PL-480).
  • Strategy: Government offered high-yielding variety (HYV) seeds, fertilizers, pesticides, and assured irrigation at subsidized prices, primarily to farmers in better-off regions (Punjab, Haryana, Western UP).
  • Outcomes: Significant increase in food grain production (especially wheat), making India self-sufficient. However, it increased regional disparities and benefited larger farmers more than smaller ones. Led to concerns about environmental impact.
• The White Revolution (Operation Flood - started 1970):
  • Spearheaded by: Verghese Kurien (often called the 'Milkman of India').
  • Strategy: Creating a nationwide milk grid, linking milk producers throughout India with consumers in urban centres through dairy cooperatives (like AMUL in Gujarat).
  • Outcomes: Made India the world's largest milk producer, increased rural incomes, and empowered farmers, especially women.

6. Later Developments & Shift in Policy

• While the initial decades focused heavily on state-led planning, subsequent periods saw gradual shifts.
• The planning model faced criticism for inefficiency and slow growth rates ("Hindu rate of growth").
• Economic liberalization began tentatively in the 1980s and more decisively in 1991, reducing the direct role of the state and planning.
• NITI Aayog (Established January 1, 2015):
  • Replaced the Planning Commission.
  • Positioned as a 'Think Tank' for the government, focusing on cooperative federalism, providing strategic and technical advice, and fostering knowledge and innovation.
  • Does not have the power to allocate funds like the Planning Commission did. Reflects a shift away from centralized five-year planning.

Key Takeaways for Exams:

• Know the rationale behind adopting a planned, mixed economy model.
• Remember the establishment dates and chairpersons of the Planning Commission and NDC.
• Understand the core focus and key figures associated with the First and Second Five Year Plans (K.N. Raj, P.C. Mahalanobis).
• Be clear about the main debates: Agriculture vs. Industry, Public vs. Private.
• Know the key outcomes: Land Reforms (partial success), Green Revolution (regions, crops, consequences), White Revolution (Operation Flood, Kurien).
• Understand the transition from the Planning Commission to NITI Aayog and the difference in their roles.

Multiple Choice Questions (MCQs)

1. The Planning Commission of India was established in which year?
   a) 1947
   b) 1950
   c) 1951
   d) 1952

2. Who is considered the chief architect of the Second Five Year Plan, which focused on rapid industrialization?
   a) K.N. Raj
   b) Jawaharlal Nehru
   c) P.C. Mahalanobis
   d) J.C. Kumarappa

3. The First Five Year Plan (1951-1956) primarily focused on which sector?
   a) Heavy Industries
   b) Service Sector
   c) Agriculture and Irrigation
   d) Foreign Trade

4. The 'Bombay Plan' proposed in 1944 was drafted by:
   a) Leaders of the Communist Party
   b) A group of leading industrialists
   c) Gandhian economists
   d) Members of the Constituent Assembly

5. Which term describes the economic model adopted by India after Independence, combining elements of state control and private enterprise?
   a) Socialist Economy
   b) Capitalist Economy
   c) Mixed Economy
   d) Laissez-faire Economy

6. The Green Revolution strategy primarily involved the use of:
   a) Traditional farming techniques
   b) Organic fertilizers only
   c) High Yielding Variety (HYV) seeds, fertilizers, and irrigation
   d) Land redistribution programs

7. 'Operation Flood' is associated with the revolution in which sector?
   a) Food grain production
   b) Oilseed production
   c) Milk production
   d) Fish production

8. Which body replaced the Planning Commission in 2015 as the premier policy 'Think Tank' of the Government of India?
   a) National Development Council (NDC)
   b) Finance Commission
   c) NITI Aayog
   d) Ministry of Planning

9. A major criticism of the Second Five Year Plan was its:
   a) Overemphasis on agriculture leading to industrial stagnation
   b) Relative neglect of agriculture leading to food shortages
   c) Complete exclusion of the private sector
   d) Focus on small-scale village industries only

10. The strategy of 'Import Substitution' adopted during the early planning phase aimed to:
    a) Increase imports of essential goods
    b) Encourage domestic production of goods that were earlier imported
    c) Promote exports aggressively
    d) Reduce all forms of international trade

Answer Key:

1. b) 1950
2. c) P.C. Mahalanobis
3. c) Agriculture and Irrigation
4. b) A group of leading industrialists
5. c) Mixed Economy
6. c) High Yielding Variety (HYV) seeds, fertilizers, and irrigation
7. c) Milk production
8. c) NITI Aayog
9. b) Relative neglect of agriculture leading to food shortages
10. b) Encourage domestic production of goods that were earlier imported

Study these notes carefully. Remember the context, the key decisions, the debates, and the outcomes. Understanding the 'why' behind these developments is as important as knowing the 'what'. Good luck with your preparation!