The average Indian student who starts an undergraduate course in economics in the next academic session would have been born after 2001. This is a decade after India adopted economic reforms, which drastically changed the economic landscape, both in material and intellectual terms. Economies and societies change with time. Not all changes are for the good. Post-reform India has brought a new set of challenges. But one can say with some degree of confidence that despite problems like systemic agrarian distress, lack of remunerative jobs, and an impending day of reckoning on the ecological front, post-reform India is better than the nation we had before 1991 at least in material terms.
Two attributes complicate any long-term and structural economic decision making in India. It is the world’s largest democracy. So, economics must negotiate its way through politics. And, we are a country of large economic inequality both across class and regions. This complicates the interaction of politics and economics.
These two challenges also demand a far more nuanced intellectual approach to economic policy-making in India than what one often comes across in the public discourse. Unfortunately, very little of this nuance can be seen in our public discourse. Among the biggest reasons for this is the lack of historical knowledge about the processes and intellectual trends which shaped our post-independence economic evolution. Knowing and analysing the Bombay Plan, an economic agenda for newly independent India written and released by the biggest industrial leaders including the proverbial Tata-Birlas is one of the basic requirements of developing such an understanding.
It is on this count that Sanjaya Baru and Meghnad Desai have done a service to the popular economic discourse by taking the step to publish a set of essays on the Bombay Plan, along with the original document. Some details from the Plan would be seen as radical today.
Imagine a group of capitalists saying that people should be entitled to 2,800 kilo calories of nutritional intake everyday. Subsequent poverty lines are associated with much lower levels. Similarly, there is a passage in the Plan which makes a virtue of deficit financing, provided it was used for investment purposes. Business houses squirm at the talk of government not meeting its fiscal deficit targets today. Of course, these are tidbits when compared to the fact that India’s biggest capitalist leaders wrote an economic document arguing for state control over the economy. This, as Ajay Chibber rightly points out in the book, shows that “…the parenthood of India’s shift to State Planning is hard to pin on Prime Minister Nehru alone. Even the top industrialists of that time, JRD Tata and GD Birla, were pushing for State control and planning as co-authors of the Bombay Plan.”
Other essays including those by the editors offer interesting views on not just the plan but also India’s post-independence economic trajectory. One need not agree with all the views which have been presented, but the writings do trigger some interesting questions.
For example, most of the essays highlight the fact that the Bombay Plan argued for a dismantling of landlordism in the Indian economy. However, history shows that the Indian capitalist class did not offer any concrete assistance to what was then a strong movement for land reforms in the country. Was this a manifestation of reluctance on the part of India’s big capitalists to take on entrenched vested interests in the rural economy? Similarly, while most authors highlight the concern of authors of the Bombay Plan towards economic inequalities, none of them says anything remarkable about the concern for social inequality. The role of caste in perpetuating inequality in India was given a lot of attention by the founding fathers or our Constitution and rightly so. On the other hand, many pro-reform voices who criticise the Indian state for imposing fetters on freedom of capital and enterprise after independence have remained silent about the unfreedom imposed by caste on freedom of mobility in the labour markets.
Also, the Bombay Plan is a big vindication of the fact that policies and intellectual currents should not be seen in isolation.
Had Jawaharlal Nehru not been influenced by the success of the socialist experiment in the Soviet Union and not championed the socialist cause in the Congress, the Bombay Plan would probably have been very different. Quite a few essays in the book argue that the Plan was an attempt to prevent a radical takeover of private capital after independence under a socialist government.
Similarly, it is important to realise that the rising clamour for doing away with all sorts of government intervention in the Indian economy is also because of the fact that India’s capitalist class does not need the state anymore. Things were very different in the 1940s, when imagining a significant capital goods industrial base without state support was almost impossible.
There can be many agreements and disagreements with the arguments made in the Bombay Plan and the commentary made in the book. However, one could argue that the Bombay Plan was and continues to be a unique initiative by the Indian capitalist class where they saw their interests as part and parcel of the larger macro economic interests of the Indian economy. More than seven decades after the Bombay Plan was released, India faces a very different set of challenges. Many of these require serious engagement with private capital. However, what is lacking is the initiative which can put individual challenges in a macro perspective.
The Bombay Plan – Blueprint for Economic Resurgence
edited by Sanjaya Baru and Meghnad Desai
Price: Rs 500
First Published: Feb 08, 2019 18:17 IST