PLANNING AND ECONOMIC REFORMS

PLANNING AND ECONOMIC REFORMS 

Introduction

1. Gandhian approach to development
1. Get idea in Hind Swaraj
2. Not economist, neither had blueprint
3. Critic of western model
1. If all adopt same, at least 9 more earths will be needed
4. Fundamental: principle of non-violence and Swaraj
5. 3 pillar
1. Economic growth
2. Redistributive justice
3. Morale regeneration
6. Gandhian concept towards way of life can be understood by his 7 sins
1. Wealth without work
2. Pleasure without conscience
3. Knowledge without character
4. Commerce without morality
5. Science without humanity
6. Worship without sacrifice
7. Politics without ethics
7. SN Agrawal, Sriman Narayan: Gandhians presented Gandhian plan
1. Reform of agriculture
1. Address hunger and unemployment
2. Govt should focus on land reforms, cooperative and rural credits
2. Revival of cottage industries
1. Provide supplementary income
2. Khadi can address clothing requirement
8. Focus was on fulfilling basic necessities
9. Not against machines, against imitating western model in India
1. Machines not against humans
2. Machinisation results into accumulation of wealth and increases exploitation
10. He was for revival of Indian villages
11. Today's model is full of unsustainable development
12. Resulted into widening gap between India and Bharat
2. Nehruvian Model
1. Modernist, not economist
2. Impressed by achievement of USSR
3. Progressive socialism
4. 2nd FYP: Nehru-Mahalonobis model
1. Investment in heavy industries
1. Provide capital formation
2. Independent from imports
2. Centralised planning
3. Neglected consumer industries
1. Sacrifices in short term
4. Industrialisation will create more demand for agricultural goods and will provide fertilizers, Equipment for promotion of agriculture
5. Since model creates shortages, introduced physical control on rationing and fiscal control on administered pricing (not market led model)
6. Kept private sector weak to check accumulation of wealth
7. Public sector will provide employment
5. Could not address the basic problems
1. Rationing resulted into black marketing
2. Public sector not working on economic logic
1. Producing poor quality goods at higher price
6. India couldn't produce goods that could be exported
7. It made India licence permit quota raj or 'overdeveloped state'
3. even successors of Nehru didn't improve and continued into rhetoric

 

 

Planning and Public Sector

1. Feature of socialist culture
2. To determine priorities and go for best possible use of resources
3. Objective: higher growth and balanced development
4. Except few, other PSUs started showing weaknesses of the model
5. Developed structural problems
1. Over manning, low work ethics, low capacity utilisation, excessive expenditure, fiscal deficit, absence of rational pricing policy, negative growth of return
6. India came under Financial crisis
7. Hence India was forced to change
8. Vimal Jalan; former RBI Governor
1. PSU were like old family silver where family had to spend more to keep silver shining