2. (c) What were the thrust areas of economic planning during the pre-liberalisation era? Discuss.

Thrust Areas of Economic Planning during the Pre-Liberalisation Era (1950-1991)

The economic planning in India during the pre-liberalisation period was guided by several core objectives, primarily implemented through a series of Five-Year Plans. These thrust areas reflected the nation's aspirations for economic sovereignty, social justice, and industrial growth.

1. Heavy Industrialization and Public Sector Dominance

• Mahalanobis Model: The Second Five-Year Plan (1956-1961), based on the P.C. Mahalanobis model, laid a strong emphasis on rapid industrialization, particularly focusing on basic and heavy industries like steel, machinery, and capital goods. The rationale was that robust heavy industries would create a strong industrial base, essential for long-term self-sustained growth.
• "Commanding Heights" of the Economy: The public sector was envisioned to occupy the "commanding heights" of the economy, driving growth and ensuring equitable distribution. Significant investments were made in State-Owned Enterprises (SOEs) across various sectors including steel (e.g., Bhilai, Durgapur, Rourkela), energy, and infrastructure.
• Industrial Policy Resolutions: The Industrial Policy Resolution of 1956 classified industries into three schedules, with the state having exclusive responsibility for Schedule A industries, reflecting its dominant role.

2. Self-Reliance (Import Substitution Industrialization)

• Reduction of Foreign Dependence: A crucial objective was to reduce India's dependence on foreign goods and capital, both to conserve foreign exchange and to safeguard national sovereignty.
• Import Substitution Industrialization (ISI): This strategy involved promoting domestic production of goods that were previously imported. It was supported by high tariffs, import quotas, and stringent licensing requirements (often termed the "License Raj") to protect nascent domestic industries from international competition.
• Food Self-Sufficiency: Achieving self-sufficiency in food grains was a paramount goal, especially after periods of food shortages. The Green Revolution, starting in the mid-1960s, transformed Indian agriculture through the introduction of High-Yielding Variety (HYV) seeds, better irrigation, and chemical fertilizers, eventually making India self-sufficient in food grains.

3. Poverty Alleviation and Social Justice

• Inclusive Growth: From the very beginning, economic planning aimed at reducing income inequalities and ensuring social justice. Measures included progressive taxation, land reforms (though with mixed success), and specific programs for rural development.
• "Garibi Hatao": The Fifth Five-Year Plan (1974-1979) notably emphasized poverty alleviation with the slogan "Garibi Hatao" (Abolish Poverty), leading to the introduction of various anti-poverty programs.
• Employment Generation: Efforts were made to utilize the available human resources by increasing employment levels, particularly in rural areas and through the expansion of cottage and small-scale industries.

4. Economic Growth and Stability

• Increasing National Income: A primary goal was to achieve a high growth rate to improve the living standards of the population and increase national and per capita income.
• Price Stability: Economic planning aimed at maintaining stable market conditions and preventing sharp fluctuations in prices, which could undermine economic progress and disproportionately affect the poor.

5. Modernization of the Economy

• Technological Advancement: Modernization involved adopting new technologies in agriculture and industry to improve productivity and efficiency. This also included developing indigenous technological capabilities.
• Diversification: The plans sought to diversify the economic structure, moving away from an overwhelmingly agrarian economy towards a mixed industrial base.

6. Mixed Economy Model

• India adopted a mixed economy model where both the public and private sectors co-existed. However, the state played a dominant and regulatory role, guiding investments and resource allocation according to national priorities. The private sector operated within a framework of licenses and regulations.

The table below summarizes the key thrust areas and their associated policies/plans:

Thrust Area	Key Policy/Plan/Period	Description
Heavy Industrialization	Second Five-Year Plan (Mahalanobis Model), Industrial Policy Resolution 1956	Focus on capital goods, steel, and basic industries; public sector dominance.
Self-Reliance	Import Substitution Industrialization, Green Revolution (mid-1960s)	Reducing dependence on imports; achieving food self-sufficiency.
Poverty Alleviation & Social Justice	"Garibi Hatao" (Fifth Five-Year Plan), Land Reforms, various rural development programs	Reducing inequality, providing employment, welfare schemes.
Economic Growth	All Five-Year Plans	Increasing national and per capita income; improving living standards.
Modernization	Technological advancements in agriculture and industry	Adoption of new technologies, diversification of economic structure.
Mixed Economy	Overall planning framework (1950-1991)	Co-existence of public and private sectors with dominant state control.

While these thrust areas led to significant achievements, such as a diversified industrial base and food self-sufficiency, they also led to inefficiencies, slow growth, and a balance of payments crisis by the late 1980s, which ultimately necessitated the economic reforms of 1991.