Friday Discussion (22/01/21)

On the 22nd of January 2021, the BSc students met online for the much-awaited weekly discussion, the good ol’ Friday discussion! This Friday, we had the topic of Five Year Plans on the table for discussion. In this hour-long discussion, we covered everything – starting from the era of a newly-independent India, all the way up to the mature India that we all live in today. Here’s a write up of the discussion.

Planning is a vital aspect of a nation’s economic development. What are the factors that have affected planning in India, how has planning evolved over the years, how have other nations armed themselves with economic planning and what does the future hold for planning in India – were some of the questions that we looked into during the course of this discussion. India, after gaining independence, adopted the Five Year Plans (FYPs) to boost the economic growth of the nation. This model had a socialist influence and it was desired by various nations worldwide. 

Initially, India focused more on agriculture while seeking savings from industries. While this sounds like a good idea, It is important to note that India did not have many industries and the closed economy was not helping in any way to improve their status. While the first FYP (based on the Harrod-Domar model) focused extensively on the primary sector, the second FYP (which followed the Mahalanobis model) stressed on rapid industrial development while assuming a closed economy with imported capital goods. This did not work well and as a result, the third FYP focused equally on both sectors. While the agricultural sector had its own set of problems such as migration from neighbouring nations, fragmented land holdings, lower production value and unpredictable weather, it needed self-sufficiency, especially after the drought of 1965. We sought aid from the USA but received grade-3 quality wheat – quite literally, we were ‘helped’ with their leftovers.

We can trace the developments of these plans based on the events that occurred during the course of the preceding plan – for instance, the plan formed after the Sino-Indian war placed more importance on the defence sector. While infrastructural development and improvement in terms of healthcare, education etc. was always on the agenda, factors including politics have influenced the FYPs to a large extent. 

The last FYP was introduced for the years 2012-2017, and the NITI Aayog was brought into effect on the 1st of January 2015.This was a consequence of saturated and unrealistic plans that had piled up over the years and were almost dormant due to the faster pace of economic evolution. The NITI Aayog is a policy think-tank and stresses on the formation of road-maps, visions and strategies for the country. It broadly focuses on developing a vision for a dynamic and market-led economy for the country. It also collects vital data which is helpful in forming future policies more accurately.

Suggested readings-

‘Backstage – The story behind India’s high growth years’ authored by Montek Singh Ahluwalia (Indian Economist, civil servant, Dept. Chairman of the Planning Commission of India)

‘Half Lion – How P.V Narasimha Rao Transformed India’ authored by Vinay Sitapati (assistant professor of political science and legal studies at Ashoka University)

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