THE FIVE YEAR PLAN
By
V.B.R. KRISHNA SASTRI, M.A.
(Lecturer,
Hindu College, Masulipatam)
The
Planning Commission, set up in March 1950 by the Government of India, placed
before the country in July last, for the widest possible public
discussion, a draft outline of the first Five Year Plan, prepared in
consultation with the Central and State Governments, as also with the
representatives of the principal industries of the country. The object of the
present writer is to view the Plan in its proper perspective and make some
comments on it.
It
is not a complete or a full picture of the Plan that has been given us; what we
have is only a draft outline. The reason for it is not far to seek: the
Planning Commission intended to invite the public to offer their criticism of
the Plan and thus help in giving a final shape to it. Surely, in a democratic
State we could not wish it to be otherwise.
Next,
the Plan is a Five Year Plan and the first of its kind at that. Failure to
remember this fact accounts for much of the criticism of the Plan. The Planning
Commission have not only made it possible for us to modify the Plan but also,
by limiting it to a period of five years, which is What I may call the normal
expectation of life of a Government in our country, left us free to draw up a
new Plan at the end of five years–during which period anything might happen:
new wants might arise, new resources might come to light, and the technique of
production itself might alter.
The
Five Year Plan is a comprehensive, national plan. It includes within its range
the whole nation and all aspects of its life. Yet, no wonder, it is essentially
an economic plan. Napoleon said an army marches on its stomach; so does a
nation. And ours is a subsistence economy in a Welfare State. The well-being of
the nation, as of an individual, is conditioned by the health and strength of
its physical basis. The needs of the body have to be cared for before the needs
of the mind and of the spirit. Hence the emphasis laid by the Plan on increased
production and wealth, and the meagre provision made for expenditure on
education and other social services.
Again,
the Five Year Plan is a composite Plan. It incorporates the plans of the Indian
Union and of the various component States. Under conditions of division of
powers between the Centre and the States, and on the principle that he who pays
the piper calls the tune, different State Governments have already undertaken
vast schemes of development and embarked on the construction of
a number of projects for many of which they
need the assistance of the Central Government. The need for
integrating these schemes, not only to avoid the waste of public resources and
the scramble for public funds but also to ensure the co-ordinated development
of the country, has been well supplied by the Planning Commission with its Five
Year Plan. It is, so to speak, a symphony of the various notes struck by the
State Governments, or, to change the metaphor, a pattern woven of plans on a
State scale. It represents a measure of agreement among the various Governments
for which credit must go to the Planning Commission, to the Congress
Governments pursuing a common policy at the Centre and in the States, and, not
least, to the Fathers of the Indian Constitution, who made it possible to plan
at all on a national scale.
The
Planning Commission held consultations not only with the Union and State
.Governments but also with the representatives of principal industries of the
country, for the Plan is not confined in its scope to the public sector of
industry; it includes the private sector of industry as well. It is not,
therefore, as alleged, a mere ‘plan of projects’ or a mere ‘planned programme
of public expenditure’.
It
is, moreover, a realistic plan, not a doctrinaire one, for it embodies the
administrative experience not only of the members of the Planning Commission
but also of the various Governments and Industries consulted. With their
pragmatic approach, the authors of the Plan are concerned less with what is
desirable and more with what is possible. And, in looking ahead, they have not
ceased to look behind and before. The big strides that big industries made
before 1939, the stresses and strains of the War and Partition on the country’s
economy with its consequent structural and functional defects, the problem of
inflation and the remedy of controls,–all are viewed against the background of
an alarmingly increasing population.
Conceived,
as the Plan is, in a spirit of realism, it is a plan for progress, not for
prosperity. Self-sufficiency, not abundance, is its keynote. Rightly so. For,
our economy, hamstrung by the pressure of population, bruised by the War and
battered by Partition, has to be rehabilitated and set in motion. The ground
that we have lost must be recovered and fresh ground gained. Advance we must,
for not to advance is, under modern conditions, to recede. But in our war
against want, we must first plan our strategy, mobilise our resources, build
our strength, make sure of adequate supplies of essential goods here and now,
make it possible for increased supplies of such goods to be had hereafter, and
keep the supply lines clear. All this, and no more, is attempted to be done by
the Five Year Plan.
“The
problem before the country,” states the Planning Commission, “is, firstly, to
rectify the disequilibrium in the economy caused by War and Partition, and,
secondly, to initiate the development of certain basic resources so as to lay
the foundation of more rapid economic growth in the future.” To this end, the
Plan envisages an aggregate public outlay, by the Central and State
Governments, of Rs. 1493 crores or of Rs. 1793 crores in the event of foreign
assistance in the expected measure forthcoming, and an outlay by private
industry of Rs. 250-300 crores. Loans, internal and external, revenue surpluses
deliberately created by the levy of old taxes, keyed up to a high pitch, and of
new taxes like the Death duties, and deficit financing, if necessary, in the
later stages of the implementation of the Plan, are the means by which funds
are to be found by the Governments. Of the total public outlay, Agriculture,
Rural Development, Irrigation and Power claim 43%, Transport and Communications
26% Industry 7%, and Social Services, Rehabilitation etc., the balance. Taking
first things first, the Plan contemplates the construction of a number of
irrigation, hydro-electric and multi-purpose projects, with a view to
increasing the area, and the yield, of land under cultivation, thus ensuring a
sufficiency of foodgrains for a growing population and a sufficiency of raw
materials like cotton, jute, sugar-cane and oil-seeds for well-established
industries in our country, in which present production falls short of existing
capacity, which, however, is adequate. It thus provides for sufficient supplies
of essential consumer goods like foodgrains, cloth, soap and sugar. It proposes
to increase the productive capacity of certain producer goods industries, which
cater to the needs of the common man, like steel, cement, aluminium,
fertilisers, glass and chemicals. It sets out to develop such basic industries
like newsprint, machine tools, electricity, iron and coal and other important
industries like locomotives and shipping.
Thus
the first Five Year Plan secures a stable and balanced economy for India. The
Plan is not ambitious; it is not spectacular. Its objectives are limited; its
targets are low. It is modest. And modesty is its greatest virtue. For, it
should be remembered that India is poor that poverty enfeebles a nation in
proportion to the effort-that it is called upon to make to improve itself. The
dearth of technical personnel in the country, the lack of political experience
of our administrators, and the need to adopt a disinflationary policy,–all rule
out schemes of heavy capital expenditure, even if sufficient funds were
available.
Another
remarkable feature of the Five Year Plan is its pronounced bias for
agriculture. This accounts for the slow pace of industrial progress during the
first five year period, though it ensures an increasing tempo of industrial
development in the future. The Five Year is not a judgment that condemns the
country to remain for ever an agricultural one. It is, however, a judgment that
condemns the mistaken anti-thesis between Industry and Agriculture by declaring
the development of agriculture to be the sine qua non of industrial
advancement. It is, further, a sad commentary on the present deficiencies of
foodgrains and raw materials in the country, the result largely of Partition
but also of the pressure of population and the continuance of age-old methods
of agricultural production. The chief merit of the Plan consists not so much in
supplying the deficiencies in the present as in providing against their
recurrence in the future, by the adoption of Family Planning and the
modernisation of agriculture. The Plan deserves praise, if for nothing else,
for the commendable frankness with which it tells us that we are far too many
in the land to live in a state of tolerable comfort, do what we may, and for
the note of warning that it sounds, that, unless Family Planning is adopted, no
appreciable measure of economic progress can ever be achieved in India. If, as
the Planning Commission declares, “with all the effort that the first Five Year
Plan will represent, it will be possible barely to restore by 1955-56 the
pre-war standards of consumption in regard to essentials like food and
clothing”, it is not only because of the provision for the future by investment
in producer goods industries but also because of the increasing pressure of
population.
Another
noteworthy feature of the Plan is the Mixed economy that it envisages for the
country. Nationalisation of existing industries is rejected on the valid ground
that, in an era of expanding production; the resources of the State should best
be devoted to investment in new industries. The policy of Laissez Faire is
definitely abandoned and increased State control is to be exercised over all
major industries through the machinery of Village Production Councils in
agriculture, and Development Councils in major manufacturing industries.
Private enterprise is allowed to exist, but it must possess a social conscience
and undertake social obligations. It is in this new industrial climate that
private enterprise is permitted to flourish. The recent Industries Development
(and Regulation) Act of 1951 has already brought many industries under the
controlling hand of the State.
Such
is the First Five Year Plan presented by the Planning Commission. It stands
against the background of the grim determination of the democracies of the
world to help raise living standards of backward peoples and thus make the
world safe for democracy. India
is already receiving
foreign aid in the form of loans of money or of the services of technicians,
whether as part of the Colombo Plan of the Commonwealth countries or as part of
the Point Four Programme of the U.S.A. It is up to the people of India to make
a determined effort to deserve the foreign assistance so generously proffered
and secure the successful implementation of the Plan, on which depends not only
the well-being of the nation but the
future of democracy.