Origin of Planning in Independent India

The concept of economic planning played a significant role in shaping the policies of Independent India. The idea behind having a planned economy was to address the vast socio-economic challenges facing the nation after independence, such as poverty, inequality, and lack of industrialisation.

Influences on India's Planning Approach

Several ideas and proposals contributed to the thinking around economic planning in India. However, one particular plan stood out as a major precursor and influence on the official planning process adopted by the government.

• The Bombay Plan: This was a plan for the economic development of India prepared in 1944 by a group of prominent Indian industrialists and economists. It proposed a 15-year investment plan focusing on rapid industrialisation. Although not fully adopted, its emphasis on state intervention, public sector role, and planned development strongly influenced the direction taken by the Indian government after independence.
• Demand by Peasants: While peasant movements and their demands were crucial for land reforms and agricultural policies, the specific idea of national-level economic planning as a comprehensive state strategy was not primarily driven by peasant demands.
• Demand by Workers' Unions: Labour unions played a vital role in advocating for workers' rights, better wages, and working conditions. However, their focus was primarily on labour issues and industrial relations, not on formulating a national economic planning framework.
• The Gandhian Vision of India's Future: Mahatma Gandhi's vision emphasised village self-sufficiency, small-scale industries, and decentralisation. While his ideals influenced certain aspects of India's development strategy (like community development), the large-scale industrialisation and centralized planning model adopted initially was more aligned with the ideas presented in plans like the Bombay Plan, rather than the core Gandhian economic philosophy.

Considering these points, the idea of systematic, large-scale national planning in Independent India was most directly drawn from the discussions and proposals put forth in the Bombay Plan.

What was the Bombay Plan?

The Bombay Plan, officially titled "A Brief Memorandum Outlining a Plan of Economic Development for India," was published in two parts in 1944 and 1945. It was drafted by eight leading Indian industrialists and businessmen:

• Purushottamdas Thakurdas
• J.R.D. Tata
• G.D. Birla
• Ardeshir Dalal
• Shri Ram
• Kasturbhai Lalbhai
• A.D. Shroff
• John Mathai

Key features of the Bombay Plan included:

• A target to double the per capita income in 15 years.
• Heavy emphasis on rapid industrialization, especially basic and heavy industries.
• Significant role for the state in planning and investment.
• Proposals for land reforms and agricultural development.

The plan demonstrated that even the capitalist class in India saw a significant role for state intervention and planning to achieve rapid economic growth, a notion that strongly resonated with the nationalist leadership, particularly Jawaharlal Nehru.

Revision Table: Influences on Indian Planning

Additional Information: Planning Commission and Five-Year Plans

Following independence, the government of India established the Planning Commission in 1950 to formulate India's Five-Year Plans. The First Five-Year Plan (1951-1956) and subsequent plans aimed at achieving economic growth, self-sufficiency, and social justice through targeted investments and policies. The initial plans, especially the Second Five-Year Plan, strongly mirrored the emphasis on heavy industry and the public sector's role advocated in the Bombay Plan, showing its lasting influence on India's approach to planned development.

The Planning Commission was later replaced by NITI Aayog in 2015, marking a shift in India's approach to planning and development, moving towards a more decentralized and collaborative model.