Class 12 Political Science Book 2 Chapter 3 Politics of Planned Development NCERT Solutions

Q. Which of these statements about the Bombay Plan is incorrect?
(a) It was a blueprint for India’s economic future.
(b) It supported state-ownership of industry.
(c) It was made by some leading industrialists.
(d) It supported strongly the idea of planning.

Answer: (b) It supported state-ownership of industry.

Why (b) is the incorrect statement. The chapter tells you exactly what the Bombay Plan
wanted: it “wanted the state to take major initiatives in industrial and other economic
investments”. Taking the initiative in investment is not the same thing as owning industry. The
Plan was written by big industrialists, who were asking the state to invest, not asking it to take
their industries over. Nowhere does the chapter say the Bombay Plan supported state ownership.

Why the other three are correct statements.

• (a) It was a joint proposal for setting up a planned economy in the country, which is
  what a blueprint for the economic future means.
• (c) The chapter says “a section of the big industrialists got together in 1944 and
  drafted a joint proposal”, so it was indeed made by some leading industrialists.
• (d) That is the whole reason the chapter tells you about it. The Bombay Plan is
  evidence that even private investors, who are commonly assumed to be averse to planning, supported
  the idea of planning, which is how the chapter reaches its conclusion that “from left to right,
  planning for development was the most obvious choice for the country after Independence”.

Careful. The question asks which statement is incorrect. Three of the
four options are true. Underline the word “incorrect” before you start reading the options; this is
the commonest way to lose a mark on this question.

Q. Which of the following ideas did not form part of the early phase of India’s
development policy?
(a) Planning    (b) Liberalisation    (c) Cooperative Farming   
(d) Self sufficiency

Answer: (b) Liberalisation.

Why. Liberalisation means opening the economy up, cutting tariffs and reducing state
control so that the market decides. The early phase of India’s development policy did the opposite
of every part of that. A Planning Commission was set up in March 1950 to decide the country’s
strategy. “The government imposed substantial tariffs on imports in order to protect domestic
industries.” A bulk of the key industries, electricity, railways, steel, machineries and
communication, were developed in the public sector, and the Congress at Avadi declared that a
socialist pattern of society was its goal. Liberalisation belongs to a much later period of Indian
economic policy, not to this one.

Why not the others.

• (a) Planning is the subject of the entire chapter.
• (d) Self sufficiency is what the protective tariffs were for. The chapter says India
  had to spend precious foreign exchange to buy technology from the global market, and treats that
  dependence as a problem, which is the language of a policy aiming at self sufficiency.
• (c) Cooperative Farming did form part of that early phase, but you will not find it in
  your chapter. See the note below.

Note on option (c). Cooperative farming appears nowhere in the current text of
this chapter, because the portion that discussed agricultural policy in detail has been taken out.
You do not need it to answer the question: liberalisation is so clearly against everything the
chapter does describe that (b) can be chosen with confidence on the chapter’s own
evidence.

Q. The idea of planning in India was drawn from
(a) the Bombay plan
(b) experiences of the Soviet bloc countries
(c) Gandhian vision of society
(d) Demand by peasant organisations

i. b and d only
ii. d and c only
iii. a and b only
iv. all the above

Answer: (iii) a and b only.

Why (a) is right. The Bombay Plan of 1944 is the chapter’s own example of where the idea
came from at home. A section of the big industrialists drafted a joint proposal for setting up a
planned economy, and the chapter uses it to show that planning had support across the political
spectrum before Independence.

Why (b) is right. The chapter says that “most of all the spectacular economic growth
against heavy odds in the Soviet Union in the 1930s and 1940s” contributed to the worldwide
consensus in favour of planning, that many in India were deeply impressed by the Soviet model of
development, and that “as in the USSR, the Planning Commission of India opted for five year
plans”. The borrowing could not be stated more directly.

Why (c) and (d) are not. The chapter never traces the idea of planning to a Gandhian
vision of society, and it never traces it to a demand by peasant organisations. What it does say is
that the impetus came from two very different directions, the industrialists on one side and the
Soviet example on the other, which is exactly what makes the consensus remarkable.

Write the answer as a roman numeral. Your book numbers this second set
i, ii, iii, iv. The correct choice is the third one, a and b only, so the answer is
(iii). In the Hindi edition the same four choices are printed in a different order and the
same answer is the second one, so do not copy an answer letter from a Hindi-medium friend’s
notes.

Q. Match the following.

Answer: (a) iii, (b) i, (c) ii, (d) iv.

• (a) Charan Singh, iii. Farmers. Charan Singh is remembered as the political voice of
  the farmers and of the countryside. His standing argument was that planning in India had leaned
  too far towards industry and the cities, and that agriculture and the rural poor deserved the
  first claim on the country’s resources.
• (b) P C Mahalanobis, i. Industrialisation. This is the one pair your chapter still
  supports in full. His profile box calls him the architect of the Second Plan and a
  “supporter of rapid industrialisation and active role of the public sector”, and the
  chapter says the Second Plan, drafted under his leadership, stressed on heavy industries.
• (c) Bihar Famine, ii. Zoning. Zoning was the policy of dividing the country into food
  zones and stopping foodgrain from being moved freely from one zone to another. It came under
  heavy criticism during the Bihar famine, because it kept grain from moving to the district that
  needed it most.
• (d) Verghese Kurien, iv. Milk Cooperatives. Verghese Kurien built India’s milk
  cooperative movement, in which the milk producers themselves own the dairy that collects,
  processes and sells their milk.

Exam tip. A matching question is answered fastest from the pair you are
surest of. Fix P C Mahalanobis to Industrialisation first, since it is in your text, then Verghese
Kurien to Milk Cooperatives, and the remaining two fall into place.

Q. What were the major differences in the approach towards development at the time of
Independence? Has the debate been resolved?

Answer.

First, what was NOT in dispute. Before listing the differences, say what everybody agreed
on, because that is what makes the differences sharp.

• Development had to mean both economic growth and social and economic justice.
• It could not be left to businessmen, industrialists and farmers themselves. The
  government had to play a key role.
• The economic concerns of free India’s government would have to be different from the
  narrowly defined commercial functions of the colonial government, and poverty alleviation and
  redistribution were primarily the government’s responsibility.
• Development could not be left to private actors: there was a need for the government to
  develop a design or a plan.

The major differences.

• Which model to follow. On the eve of Independence India had two models of modern
  development before it: the liberal-capitalist model as in much of Europe and the US, and
  the socialist model as in the USSR. Many in India were deeply impressed by the Soviet
  model, including not just the leaders of the Communist Party of India but also those of the
  Socialist Party and leaders like Nehru within the Congress. There were very few supporters of the
  American style capitalist development.
• Left or Right on the state’s role. The Left favoured state control of the economy and
  preferred state regulation over free competition. The Right held that free competition and market
  economy alone ensure progress and that the government should not unnecessarily intervene.
• Industry or agriculture first. Among the nationalist leaders themselves, for some
  industrialisation seemed to be the preferred path; for others the development of agriculture, and
  in particular the alleviation of rural poverty, was the priority.
• How the government should act. Three questions the chapter asks in so many words. Was
  it necessary to have a centralised institution to plan for the entire country? Should the
  government itself run some key industries and business? How much importance was to be attached to
  the needs of justice if it differed from the requirements of economic growth?
• What development itself means. The chapter’s deepest difference is this one.
  Development means one thing to an industrialist setting up a steel plant, another to an urban
  consumer of steel, and another again to the Adivasi who lives in the region being mined.

Has the debate been resolved? No. Say so clearly and then prove it.

• The chapter’s own verdict is that “each of these questions involved contestation which has
  continued ever since”.
• The chapter opens with a present-day proof of that. In Orissa, the State government sees
  capital investment and employment; the tribal population of the districts where the ore lies fears
  displacement from home and livelihood; the environmentalists fear pollution; the central government
  fears that a refusal would set a bad example and discourage investment. All four are arguing about
  development, and the argument is not settled.
• The chapter’s framing question is still open: “What kind of development does Orissa need?
  Indeed, whose need can be called Orissa’s need?” Because these are questions about whose
  interest should prevail, they cannot be closed by evidence. They are settled, if at all, only by a
  political decision, taken by people’s representatives who are in touch with the feelings of the
  people, and reopened whenever the next such project is proposed.

Q. What was the major thrust of the First Five Year Plan? In which ways did the Second
Plan differ from the first one?

Answer, part one: the thrust of the First Five Year Plan (1951 to 1956).

• The aim. To get the country’s economy out of the cycle of poverty.
• The sector. It addressed mainly the agrarian sector, including investment in
  dams and irrigation. Agriculture had been hit hardest by Partition and needed urgent
  attention.
• The projects. Huge allocations were made for large-scale projects like the
  Bhakhra Nangal Dam.
• The diagnosis. The Plan identified the pattern of land distribution in the
  country as the principal obstacle in the way of agricultural growth, and focused on land
  reforms as the key to the country’s development.
• The pace. K.N. Raj, a young economist involved in drafting the plan, argued that
  India should ‘hasten slowly’ for the first two decades, as a fast rate of development might
  endanger democracy. The First Plan preached patience.
• The financing problem. Raising national income required people to save more than they
  spent. Spending was already very low in the 1950s and could not be cut, so the planners tried to
  push savings up, which was itself difficult because the total capital stock was low compared with
  the number of employable people.

Answer, part two: how the Second Plan differed. Set the two side by side.

Close with the verdict and the cost. The chapter says such a push for industrialisation
marked a turning point in India’s development. It also says the strategy had its problems: India was
technologically backward and had to spend precious foreign exchange buying technology from the
global market, and because industry attracted more investment than agriculture, the possibility of
food shortage loomed large. The planners found balancing industry and agriculture really difficult,
and critics charged the plan strategies from this time with an unmistakable “urban bias”.

Exam tip. This question carries the most predictable marks in the chapter.
Give the First Plan four points and the Second Plan four points, and name K.N. Raj, Bhakhra Nangal,
Mahalanobis and Avadi. Names are what separate a full-marks answer from a half-marks one.

Q. What is the contradiction that the author is talking about? What would be the
political implications of a contradiction like this?

The contradiction. The Congress was saying one thing as a party and doing another as a
government.

• As a party, its national executive endorsed socialist principles: state ownership, and
  regulation and control over the key sectors of the economy. It gave two reasons for this, to
  improve productivity and to curb economic concentration, that is, to stop wealth and the means of
  production from collecting in a few hands.
• As a government, it pursued liberal economic policies and offered incentives to private
  investment, and it justified these by a single test, the maximum increase in production. Justice
  and concentration of wealth do not appear in that test at all.
• So the same party held, at the same time, that the state should control the key sectors and
  that private investment should be encouraged and judged only by output.

The political implications.

• Policy pulls in two directions. Declarations move one way and actual decisions the
  other, so neither the socialist goal nor the growth goal is pursued wholeheartedly, and the results
  disappoint both sides.
• Attack from both flanks. The Left can charge the government with betraying its own
  socialist resolutions; the Right can charge it with strangling private enterprise with regulation.
  The chapter’s own Left and Right box gives you exactly these two positions.
• Contestation moves inside the ruling party. If both positions live within the Congress,
  then the real argument about development is fought between wings of one party rather than between
  government and opposition, and it is settled by whichever wing is stronger at the time rather than
  by the voter.
• Words and results drift apart. Announcing a socialist pattern of society while
  measuring success only by production makes it easy to appear committed to justice without
  delivering it, which is corrosive for public trust in the long run.
• The tension is built into planning itself. The chapter’s third question, how much
  importance was to be attached to the needs of justice if it differed from the requirements of
  economic growth, is the same contradiction stated as a policy problem.

Q. If the author is correct, why is it that the Congress was pursuing this policy? Was it
related to the nature of the opposition parties?

Why the Congress did it.

• It had to hold both positions together. The Congress contained supporters of both
  models. The chapter notes that leaders like Nehru within the Congress were deeply impressed by the
  Soviet model, while the party in government depended on private industry to produce the growth it
  had promised. A party that carries both wings has to speak to both.
• The consensus of the time genuinely covered both. Everyone agreed that development
  meant growth and justice, and that the government must play a key role, but there was no
  agreement on the kind of role. A policy that endorses state control in principle and encourages
  private investment in practice is what that unresolved agreement looks like when it is turned into
  decisions.
• Planning itself had support from both sides. The Bombay Plan of 1944 was written by big
  industrialists asking the state to take major initiatives in investment. So encouraging private
  investment and running a planned economy did not feel contradictory to those making the policy:
  from left to right, planning was the obvious choice.
• Growth was the urgent need. The country was poor, the First Plan’s own aim was to get
  the economy out of the cycle of poverty, and the fastest route to production was to let private
  investment do what it could while the state built the heavy industry that private capital would
  not.

Was it related to the nature of the opposition parties? Yes, and in two opposite ways.

• There was no serious pro-market opposition to answer to. The chapter says there were
  very few supporters of the American style capitalist development in India. So the Congress paid no
  political price for socialist declarations, and could make them freely.
• There was a serious Left opposition to keep in view. The leaders of the Communist Party
  of India and the Socialist Party were deeply impressed by the Soviet model. Endorsing socialist
  principles took the ground away from them: if the ruling party already promises a socialist pattern
  of society, the Left has nothing distinctive to offer the voter.
• The result. Socialist resolutions bought off the opposition on the left, while liberal
  policies delivered the production the government needed and cost it nothing on the right. The
  contradiction was politically comfortable, which is exactly why it survived.

Q. Was there also a contradiction between the central leadership of the Congress party
and its State level leaders?

Answer: yes. The same gap between what was declared and what was done reappeared between
the two levels of the party.

• The declarations were national; the delivery was not. The socialist pattern of society
  was declared by the Congress at Avadi and written into the Second Plan by a central body, the
  Planning Commission. But the Planning Commission had only an advisory role, and much of what the
  plans required had to be carried out by the State governments.
• Land reform is the clearest case. The First Plan identified the pattern of land
  distribution as the principal obstacle to agricultural growth and made land reforms the key to the
  country’s development. That was a decision taken at the centre about who owns land in the
  districts, so it could only take effect through the party’s State level leadership.
  (What happened next was set out in a part of this chapter that the current edition no longer
  prints, so do not look for it in your book: land reform was announced nationally and applied
  unevenly, and the resistance came from the level that had to carry it out.)
• The two levels answer to different people. The central leadership could weigh growth
  against justice as a national question; a State leader had to win the next election in one State
  from the interests that mattered there. A policy that costs a national leader nothing can cost a
  State leader his seat, and that is enough to open a gap between them.
• The same split is visible in the chapter’s opening. In the Orissa case it is the
  State government that signs the Memoranda of Understanding and wants the investment, while
  the central government is weighing what a refusal would signal to investors across the
  country. The two levels are pursuing the same word, development, from two different positions.

Exam tip. In a passage question, quote the passage’s own words back at it.
Three phrases carry the marks here: two contradictory tendencies, curb economic
concentration, and the sole criterion of achieving maximum increase in production.

Q. Can you identify the various interests involved in this case? What are their key points of conflict? Do you think there are any common points on which everyone can agree? Can this issue be resolved in a way which satisfies all the various interests? What kind of development does Orissa need? Indeed, whose need can be called Orissa’s need?

The interests. (1) The State government, which wants to cash in on the unprecedented demand for iron ore and believes the MoUs with international and domestic steel makers would bring in necessary capital investment and a lot of employment opportunities. (2) The steel makers, international and domestic, who want access to one of the largest reserves of untapped iron ore in the country. (3) The tribal population of the most underdeveloped and predominantly tribal districts where the ore lies, who fear displacement from their home and livelihood; the newspaper report shows villagers of Dhinkia, Nuagaon and Gadakujanga demanding cancellation of the MoU. (4) The environmentalists, who fear that mining and industry would pollute the environment. (5) The central government, which feels that refusing the industry would set a bad example and discourage investments in the country.

The points of conflict. Investment and jobs for the State against the homes and livelihood of the Adivasis; mining and industry against a clean environment; and the national climate for investment against the wishes of the people who live on the land.

Common points. Every side says it wants the development and well-being of Orissa; they differ on who should gain and who should bear the cost. That shared aim, and the shared need for jobs in a poor region, is the ground on which a compromise could be built (for example, on fair compensation, resettlement and protection of the environment).

Can it satisfy everyone? Probably not completely, and the chapter explains why: “These questions cannot be answered by an expert. Decisions of this kind involve weighing the interests of one social group against another, present generation against future generations.” Advice should be taken from experts on mining, from environmentalists and from economists, but “the final decision must be a political decision, taken by people’s representatives who are in touch with the feelings of the people.”

Whose need is Orissa’s need? The chapter’s point is that ‘development’ has different meanings for different sections of the people: it means one thing to an industrialist planning a steel plant, another to an urban consumer of steel and another to the Adivasi who lives in that region. So there is no single ‘need of Orissa’; deciding whose need counts is itself the political choice. (Give your own view with reasons; any reasoned answer is acceptable.)

Q. Can you tell which of the parties in the 1960s were Rightist and which were the Left parties? Where would you place the Congress party of that time?

Answer. Use the box’s own test: the Left favours state control of the economy and prefers state regulation over free competition; the Right believes free competition and market economy alone ensure progress.

• Left: the Communist Party of India and the Socialist parties. This chapter says their leaders were deeply impressed by the Soviet model of development.
• Right: the Swatantra Party, whose guiding principle was an economy free from state control.
• The Congress: in the centre, leaning left in what it declared. At Avadi it declared a ‘socialist pattern of society’ to be its goal, and its government developed key industries in the public sector; yet, as the Francine Frankel passage in the exercise says, the same government also pursued liberal policies and incentives to private investment. It held both tendencies inside one party.

Q. Are you saying we don’t have to be western in order to be modern? Is that possible?

Answer. Yes, it is possible. The chapter records that in the first decade after Independence the ‘West’ was taken as the standard: being modern meant becoming more like the industrialised countries of the West, through the breakdown of traditional social structures and the rise of capitalism and liberalism. But modernisation was also associated with growth, material progress and scientific rationality, and these can be pursued in a country’s own way. India itself did not copy either model: its leaders chose a path that was different from both the liberal-capitalist model of the West and the socialist model of the USSR, with planning, a public sector and a private sector together. (This is an opinion question; give reasons for whichever view you take.)

Q. Do you recall any reference to the Planning Commission in your book Constitution at Work last year?

Answer. No. There was none, because the Planning Commission is not one of the commissions and other bodies set up by the Constitution. It was set up in March 1950 by a simple resolution of the Government of India, it had an advisory role, and its recommendations became effective only when the Union Cabinet approved them.

Q. I wonder if the Planning Commission has actually followed these objectives in practice.

Answer. Only partly. The objectives were an adequate means of livelihood for all citizens, men and women equally; ownership and control of material resources distributed to subserve the common good; and no concentration of wealth and means of production to the common detriment. On the one side, the First Plan treated land reforms as the key to development, and the Second Plan developed electricity, railways, steel, machineries and communication in the public sector. On the other side, the chapter itself says success on this challenge was “much more limited”: savings fell from the early 1960s till the early 1970s, food shortage loomed, critics saw an “urban bias”, and the Frankel passage shows the government pursuing incentives to private investment judged only by the increase in production, which sits uneasily with the objective of preventing concentration of wealth. (This is a discussion question; argue it with evidence either way.)

Q. Find out about its objectives and composition from the website, http://niti.gov.in

What your book gives you. NITI Aayog (National Institution for Transforming India) replaced the Planning Commission and came into existence on 1 January 2015. That is all the book prints; the rest is a project.

What you will find on the website (not printed in your book, so it is for the project, not for a textbook answer). Composition: the Prime Minister is its Chairperson; its Governing Council has the Chief Ministers of all the States and of the Union Territories with legislatures, and the Lieutenant Governors of the other Union Territories; it also has a Vice-Chairperson appointed by the Prime Minister, full-time members, part-time members, Union Ministers as ex-officio members and a Chief Executive Officer. Objectives: to act as the government’s think tank, to foster cooperative federalism by working with the States, and to help prepare credible plans starting from the village level and building upwards, instead of plans made only at the centre.