With reference to Nehruvian perspective of planning and economic development, examine how the early phase of economic planning in India has laid the foundation of modern India's economic growth.

The Nehruvian Perspective on Economic Planning

Jawaharlal Nehru's vision for economic development was rooted in a belief that a laissez-faire approach would be insufficient to overcome India's deep-seated problems. His perspective was shaped by:

• Mixed Economy Model: Nehru advocated for an economic system where both the public and private sectors would coexist, with the government playing a dominant role in key industries and services. This approach aimed to harness the benefits of both capitalism and socialism.
• State Control and Intervention: He believed in strong state control over critical economic sectors like steel, coal, and heavy machinery to ensure national development rather than purely private profit. This was seen as essential for building a robust industrial base and reducing import dependence.
• Planned Development: Inspired by the Soviet Union's rapid industrialization, Nehru introduced the concept of Five-Year Plans, centrally designed and executed by the Planning Commission (established in 1950), to systematically direct resources and economic activities.
• Self-Reliance: A core objective was to achieve self-sufficiency, particularly in food production and industrial goods, to reduce dependence on foreign aid and imports.
• Social Welfare: Beyond economic growth, Nehru's vision encompassed social justice, poverty eradication, and equitable distribution of resources, aiming to build a more inclusive and classless society.

Foundational Pillars Laid by Early Economic Planning (1951-1961)

The first two Five-Year Plans were instrumental in shaping India's economic structure and laying the groundwork for its future growth trajectory.

1. The First Five-Year Plan (1951-1956): Focus on Agriculture and Infrastructure

The First Five-Year Plan, based on the Harrod-Domar Model, primarily focused on the development of the primary sector.

• Agriculture: Recognizing immediate post-independence challenges like food shortages, the plan prioritized agriculture, irrigation, and power projects. Major irrigation projects like the Bhakra Nangal Dam and Hirakud Dam were initiated.
• Infrastructure Development: Significant investments were made in infrastructure, including roads, railways, and power generation, which are crucial for industrial growth.
• Social Services: The plan also addressed social services, with an increase in primary schools and the establishment of institutions like the Indian Institutes of Technology (IITs) by 1956 and the University Grants Commission (UGC) to foster higher education.
• Achievements: The plan was largely successful, achieving a GDP growth rate of 3.6% against a target of 2.1%. Foodgrain production increased from 52.2 million tonnes in 1951 to 67 million tonnes in 1956.

2. The Second Five-Year Plan (1956-1961): Industrialization and Public Sector Dominance

The Second Five-Year Plan, famously known as the Mahalanobis Model (or Nehruvian-Feldman-Mahalanobis Model), marked a significant shift towards rapid industrialization, particularly heavy industries.

• Heavy Industry Emphasis: The plan prioritized investment in capital goods industries like steel, coal, and heavy machinery, aiming to create a strong industrial base. This led to the establishment of steel plants in Bhilai, Durgapur, and Rourkela.
• Public Sector Expansion: The 1956 Industrial Policy Resolution reinforced the role of the public sector as the engine of industrial growth, reserving many key industries for state control. This also led to the nationalization of several large enterprises.
• Employment Generation: Rapid industrialization was also envisioned to generate large-scale employment opportunities.
• Achievements: While the target growth rate was 4.5%, an actual growth rate of 4.27% was achieved. The focus on heavy industries laid the foundation for India's self-reliance in manufacturing.

Long-term Impact and Foundation for Modern India's Economic Growth

The early phase of economic planning under Nehruvian leadership laid several enduring foundations for modern India:

• Creation of a Diversified Industrial Base: The emphasis on heavy industries in the Second Plan, though initially capital-intensive, created a diversified industrial structure capable of producing essential capital goods and reducing import dependence. This base proved critical for subsequent industrial growth.
• Development of Core Infrastructure: Investments in irrigation, power, transport, and communication during the early plans provided the necessary backbone for future economic activities across all sectors.
• Human Capital Development: The establishment of premier educational and research institutions like IITs, UGC, and the Atomic Energy Commission during this period fostered scientific temper and skilled manpower, essential for technological advancement and innovation.
• Role of the State in Development: The Nehruvian model firmly established the state as a proactive agent of economic change, a philosophy that persisted for decades and guided resource allocation, welfare programs, and strategic investments.
• Foundation for Self-Reliance: By focusing on domestic production and reducing reliance on foreign goods, the early plans sowed the seeds of self-reliance, especially in food and industrial products, which were crucial for national sovereignty.
• Institutional Framework: The establishment of the Planning Commission itself created an institutional mechanism for long-term strategic economic thinking, even as its role evolved over time (eventually replaced by NITI Aayog).

While the Nehruvian approach faced criticisms regarding bureaucratic inefficiencies, the 'License Raj,' and neglect of certain sectors, its fundamental contribution was the creation of a robust public sector, a diversified industrial and agricultural base, and a strong institutional framework for planning and development. These elements provided the essential launchpad for India's economic journey, enabling it to transition from a largely agrarian economy to a more industrialized and self-sufficient nation.