The Gandhian Plan

The Gandhian Plan

In the last article, we discussed the plan for India’s Economic Resurrection, the Bombay Plan. And in this article, we’d be continuing our discussion on Economic Planning in India, by analyzing the Gandhian Plan.

(Click here to read about multi-level planning in India)

The Gandhian Plan
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The Gandhian Plan

Economic Planning prior to Independence

The process of economic planning in India was initiated even before the Independence, and these plans were put forward by India’s leading politicians, capitalists, industrialists, and intellectuals about how India should plan its economic development under the British Raj, and after Independence. Some of the major plans of the period were:

  • The Visvesvaraya Plan
  • The FICCI Proposal
  • The Congress Plan
  • The Bombay Plan
  • The Gandhian Plan

These plans and proposals were disregarded and ignored by the British Raj, but however, it was these very plans which fuelled India’s Economic Development post-Independence. Many of the proposals and provisions of these plans still influence India’s Economic Planning. For example, the National Planning Committee (now known as Planning Commission) was set up initially in 1938, under the Congress Plan. The Committee was set up by the initiative of the then INC (Indian National Congress) President Subhash Chandra Bose, under the chairmanship of Jawaharlal Nehru to work out concrete programs for the development encompassing all major areas of the Economy.

The Gandhian Plan
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The Gandhian Plan

The Gandhian Plan was formulated by Srinan Narayan Agarawal in 1944. The Plan was based on Gandhian economic thinking, whose main emphasis was to find ways to fight India’s extreme poverty, backwardness, and various socio-economic challenges.

The Gandhian Economic Thinking was based on the principles of decentralization, equality, self-sufficiency, cooperation, equality, human values, and nationalization of basic industries (the current economic planning in India is opposed to the last principle of Gandhian Economic Thinking, click here to read about how the current economic planning violates the Gandhian economic principles)

The Gandhian Plan
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The Gandhian Plan mainly emphasized agriculture and the development of small unit production. The Plan referred to industrialization, but it was to the level of promoting cottage and village-level industries. Hence it was in contrast to the Bombay Plan and National Planning Committee which emphasized more on the role of heavy and large industries in India’s industrial development. Its main objective was to enhance people’s material and cultural levels and ensure for them a basic standard of living.

Contrasts between the Plans

The Gandhian Plan did not support the policies of Centralization or State-Control over the Economy, instead, it sought the promotion of agriculture, decentralization, and self-contained settlements. According to Gandhi, commercialization and centralized state-power were the curses of modern civilization, thrust upon the Indian people by European Colonialism. Gandhi argued that it was industrialization itself, rather than the inability to industrialize, which was the root cause of Indian poverty.

The Indian National Congress largely supported these principles of Gandhian Economics until the 1940s to mobilize people’s support, especially the support of marginalized and economically and socially backward people. But later, Congress and the NPC took a different view on such issues. Even Jawaharlal Nehru tried to reassure the Gandhians that prioritizing industrialization would not come at the expense of cottage industries. Many of the ideas of the Gandhian Plan such as public engagement and establishing a bottom-up and decentralized planning system were absent from the NPC Plan.

The Bombay Plan
Image by- Twitter, @PenguinIndia’s video Tweet

Moreover, in the first NPC meeting, J.C. Kurnarappa (the only Gandhian in the 15 member National Planning Committee) went to the extent of questioning NPC’s authority to discuss plans for India’s industrialization.

The main objective of the Economic Planning System in India was to achieve the socio-economic goals of the people. But however, the Planning by NPC emphasized only achieving economic goals such as growth and job creation and did not put an emphasis on the social issues plaguing India such as caste-based discrimination, the zamindari system, lack of land reforms, etc.

Interested in Economics?

Multi-level Planning: Planning in India

The Member of Parliament Local Area Development Scheme (MPLAD)

The Bombay Plan: The Plan for India’s economic resurrection

Second Generation Reforms: Economic Reforms in India

Financial Sector Reforms: Narasimham Committee I

Types of Disinvestment: India’s Disinvestment Policy

Structure of the Indian Capital Market

Important Terms in Stock Market: Terms to know before investing

Washington Consensus: Reforming or Ruinous?

Non-Market Economy: Best system for social development?

Mixed Economy: The Perfect Economic System?

Market Economy : Origins and The Great Depression

Bad Bank : Reconstructing the Reconstructors

National Income : GDP, GNP, NDP and NNP

NPA: Causes and Effects

Bad Bank : Solution to the banking crisis?

Bond Yield : Factors influencing the yields

Shell Companies: Are Shell Companies the Future?

Fiscal Deficit: Implications and Benifits

Changes in Cropping Patterns: Different patterns in India






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