India's Development Model in The First Three Decades Post-Independence (1950-1980)

India’s Development Model in the first three decades post-independence (1950-1980)
“How did India make the transition from an economic laggard to one of the fastest-growing
economies of the world?”1
The British left India haggard, scarred from the two centuries of policies that only benefitted the
British institutions. Thus, after 1947, India’s development was born amid a crisis.
The then-prime minister of India, Jawaharlal Nehru, along with Dr. Ambedkar and others at the
centre realised that modernisation In India required tight planning. It would be implemented once
the ‘base’- the agricultural sector in this case- was strong and successful. He sought to manage
this by birthing the Five-year plans- a blueprint for development in India. The First Five year
plan (1951-56) focused on nation-building and was something of a “damp-squib”2, attempting to
stay neutral between industrialisation and the agrarian sector. The land reform was implemented
in the 1950s, introducing redistribution of land and land-to-the-tiller reforms. While the goal was
to make the farmers self-sufficient, the implementation had large gaps. The surplus land seized
from landlords wasn’t enough for the farmers, and the land ceiling rules only allowed 20-30
acres of land per family, and only the top layers of the landlords were removed. Additionally,
these laws weren’t uniformly implemented in all states, so Zamindari and other similar
institutions survived in many places. The abolition of the Zamindari system and other land
reform measures also gave rise to more problems, especially in agricultural finance. The
Bhoodan movement by Acharya Vinoba Bhave early in 1951, was a movement for voluntary
gifts of land for distribution among landless cultivators to increase productivity and output.
The Second Five-Year Plan (1956-61) was created among this chaos, with many economists
already pointing out the failures in the first. In the 50s and 60s, the flow of FDI was very thin and
not allowed in India. But Nehru wanted industrialization. He and P.C Mahalanobis believed that
for economic growth and development, high rates of personal savings are required, which could
only be achieved by large-scale industrialisation. His stance as a part of the Non-Aligned
movement helped him receive support from the Soviet Union. With its help, India built steel
mills in Bokaro and with West Germany’s support, another steel mill at Rourkela was built. This
industrial revolution was only reserved for Indian companies to stabilise their produce. Cheap
steel, chemicals, and power would be plugged into the Indian companies, that would produce a
plethora of final goods like bikes, radios, etc. Nehru proposed the idea of a state-run government,
taking a more socialist approach. The local classes would be privileged and the state would
specify welfare functions. Agriculture would be given substantial resources from abroad to
increase profit. The expenditure was increased by more than 50%, but the production of food
grains lessened, while other cash crops like cotton, jute, and sugarcane received more attention.
Horticulture, animal husbandry, and dairy were given priority and several cooperatives came up.
But by the 1960s, it was clear that grain production couldn’t keep up with the population growth.
By mid 1960s, framers began to raise their voices. Charan Singh, the great Jat farmers’ leader,
heavily criticised Nehru and gave extensive writings on agricultural policies. He believed that the
state had an ‘urban bias’, with insufficient and useless spending. Nehru passed away before the
agricultural crisis took shape between 1966-69 which was then controlled by the first Green
Revolution, beginning in 1967 in Punjab. It pulled India out of food insecurity with the use of
High-Yielding Variety seeds. By 1970, Punjab produced 70% of the total agricultural output in
1Rahul Mukherji, 2009, The Political Economy of Development in India, National University of Singapore
2Sturat Corbridge, The Political Economy of Development in India since independence, LSE
India and the farmers’ incomes also rose by 70%. However, the use of HYV seeds brought
problems. Many small farmers couldn’t afford to use such expensive technology, and the high
costs of farming led many farmers to commit suicide due to debt. Also, the Green Revolution
mostly became successful in the North-West regions of India, mainly Punjab. The rest of India
didn’t see such radical change.
“The new political landscape of the 1970s and 1980s saw not only the deinstitutionalization of
the Congress and the rise of credible opposition parties; it also marked a period in India’s
political economy when a prospectively developmental state imploded.”3 Since Nehru was a pro-
elite, the development model in the 1970s became dominated by India’s rich farmers who had
previously blocked agrarian reforms, the industrial bourgeois class, and bureaucrats who later
earned rental income from the License Raj regime. Political crime and corruption became a hard
wall to economic reform. As the control of India’s productivity by the state, this led to the
suffocation of innovation. Adding to this, the average rate of growth was 2.9% per annum, barely
passable. Much of the investment went into heavy industries like iron and steel, metallurgy, and
cement with very high capital-to-output ratios and not much increase in national income. ‘Forced
savings’ led to lower consumption and the deficit financing contained in the Plan led the
government to print more money, causing inflation. The gaps between income and expenditure
led to further problems. In an overcrowded economy such as India’s, agriculture and
industrialisation go hand in hand. Organisation of agricultural productivity, along with efficient
use of labour in industries, making use of more advanced techniques could increase the national
income.
In conclusion, in the first three decades post-independence, India followed a development model
characterized by a mixed economy, state-led planning, and a focus on industrialization and self-
sufficiency. Despite the inefficiency in their implementation, it laid the groundwork for progress
and shaped the country’s trajectory in the decades to come.
3Sturat Corbridge, The Political Economy of Development in India since independence, LSE

India's Development Model in The First Three Decades Post-Independence (1950-1980)

Uploaded by

Copyright:

Available Formats

India's Development Model in The First Three Decades Post-Independence (1950-1980)

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

India's Development Model in The First Three Decades Post-Independence (1950-1980)

Uploaded by

Copyright:

Available Formats

India’s Development Model in the first three decades post-independence (1950-1980)

You might also like