Nehruvian Model of Development
Jawaharlal Nehru was the architect and builder of independent India. He presented a blue
print for the economy of independent India with a socialistic pattern of society after independence. The
Awadi Congress Session in 1955 reiterated the commitment. He imbibed the ideas of planned economy
from Soviet Russia. He coined his own brand of socialism which is known as democratic socialism.
Nehru believed in democracy and socialism obviously. He planned economic and social democracy at
the same time.
Centralised Planning
The fundamental element of Nehru Model of economic development was planned
economy. Just after independence Nehru visualized an urgent need of economic and social development
on the basis of equality. A welfare state of a socialist pattern was his ideal for many decades.
Democratic planning was the idea of him. It means the utilization of all the available resources to
promote the good of the community and the individual. Naturally the main objective is to increase the
wealth of the country, to raise standards of living and to get rid of poverty and unemployment.
The Indian National Congress, under the inspiration of Jawaharlal Nehru, set up the
National Planning Committee in 1938. The Committee made a series of studies on different subjects
concerned with economic development. It laid down that the state should own or control all key
industries and services. Thus, centralised planning was visualised as a policy solution for economic
problems.
Planning Commission was visualised by the Nehruvian Model as an institution for
national planning. To get just and equitable distribution of national resources was the idea behind the
formation of the Planning Commission at the centre. The Planning Commission came into existence in
March 1950 and then Prime Minister Nehru became its ex -officio chairman. The main function of the
Planning Commission was to design, implement, monitor and evaluate Five Year Plans.
Immediately after the establishment of Planning Commission, there emerged discontents
about the composition and functioning of Planning Commission. It was alleged that Planning
Commission was a centralised body consists of members appointed by the Central Government. The
commission makes planning from the centre away from countryside. To rectify the issue National
development Council was established in 1952. It was tasked to monitor the works of the Planning
Commission. It included the Prime Minister (Chairman), members of central cabinet, Chief Ministers of
the state and members of the Planning Commission. The final approval of a plan was given by NDC.
Five Year Plans were formulated to address economic problems in the country. They
were formulated under the inspiration of the Soviet Model of centralised planning. The first Five Year
Plan was commenced in 1950-51. It was followed by a series of Five Year Plans.
Mixed Economy
Capitalist economy is an economic system in which private firms and individuals make
the major decisions regarding production and consumption. There is little government intervention or
central planning. The price- and output-related decisions are taken by demand and supply forces. On the
other hand, in socialism the means of production are owned by the government. All production and
distribution decisions are taken by the government. Here, the individuals rely on the state for everything
from food to healthcare. It is the government that determines output and pricing levels of these goods
and services.
A mixed economic system combines the aspects of both capitalism and socialism. It is
also known as Dual Economy. A mixed economic system protects private property. It allows a level of
economic freedom in the use of capital. At the same time it allows for the governments to interfere in
economic activities in order to achieve social aims. In fact, all economies of the world are mixed
economies. They may tilt toward capitalism and socialism. The chief characteristics of the mixed
economy may be summarised in the following way—
A. State and private sector both to have economic roles.
B. Private sector to play those roles where profit can be earned. But state is not prohibited from
playing this role.
C. Non-profit making sectors are to be looked after by the state.
D. Supply of the ‘public goods’ is done by the state. But private sector is free to play this role also.
E. The economic roles played by either state or private sector may not remain fixed for all times.
They may get modified as per the needs of the time.
F. Regulation of the economic system is to be taken care of by the state.
Emphasise on Public Sector
Nehru was well aware of the need of setting up of public sector institutions. The First
Five Year Plan was implemented when the country got affected by issues of famine and food security.
Thus, the first Five Year Plan focused on huge public outlay for agriculture and the primary sector. The
Plan provided for 3 major public sector hydroelectric dams– the Bhakra Nangal, the Hirakud and the
Nagarjuna Sagar. They were set up to provide irrigation and electricity.
Nehru correctly assessed that the deployment of science and technology could address the
issue of poverty. Science could not be emanated or be sustained by the private sector. It required huge
government outlays and patronage. Nehru’s blueprint was twofold – (1) to replicate world-class
institutions in India and (2) to ensure the service of world class scientists in India. As a result, Nehru
established more government funded institutions like the Indian Institutes of Management, the Indian
School of Mines, Agriculture Universities and the All India Institute of Medical Sciences, and so on.
Along with it he has ensured the service of personalities like Vikram Sarabhai, Homi J. Bhabha, Satish
Dhawan, S. S. Bhatnagar and many others. Besides he has created the Department of Atomic Energy,
the Bhabha Atomic Research Centre, the Physical Research Laboratory, Indian Space Research
Organisation, National Chemical Laboratory, the National Physical Laboratory, the Fuel Research
Station, the National Metallurgical Laboratory, etc.
Nehru was in a hurry to create the framework for the modern Indian State in the 1950s.
He did not wait for the market forces to enter into the critical areas of the nascent nation. He has created
and nurtured huge public sectors to move into power, transportation, healthcare, education, science and
technology, steel, hydroelectric projects, dams and irrigation, institutions for preservation of our
historical and cultural heritage, and rural development.
Poverty Alleviation
Poverty is defined as the minimum basic consumption level, essential for survival. It is a
denial of choices and opportunities for living a tolerable life. It has been defined by the Planning
Commission of India in terms of calorie intake. Poverty alleviation and raising standard of living of the
masses is one of the objectives of planning in India. However, poverty reduction was never in the
forefront of economic strategies during the first two decades after independence. The planners of that
time were optimistic about the positive impact of agriculture and industrialization. They were confident
that spillovers will reduce poverty and generate more employment opportunities. In the First Five Year
Plan it was visualised that promotion of agriculture would address the issue of poverty to a great extend.
Thus, agriculture was emphasised in the plan. The Nehruvian plan didn’t try to attack poverty directly.
Hence, poverty reduction programmes were not introduced. The decade of 1970s witnessed first ever
assault on poverty as fifth 5-year plan introduced poverty alleviation as one of the principle objectives.
Agrarian Development
Agriculture sector went with several ups and downs in the initial decades of planning.
Positive Trends
The positive outcomes with respect to agriculture development were discussed below:
A. There was steady increase in area under cultivation;
B. There was a steady rise in average yield per hectare;
C. There was increase in production of food grains
Negative Trends
A. Climate Factors: Agricultural production was vulnerable to several climatic factors like
draught, flood, storm, cyclone, etc.
B. Excessive Dependence on Monsoon: Agriculture production remained as a gamble in monsoon.
Variability in quantum and timing of rainfall makes agriculture production uncertain.
The First Five Year Plan was introduced with special emphasise on agriculture
development in 1950-51. During the Plan nearly 44.6% of the allocation was kept for agriculture,
community development, irrigation and energy. Nehru’s policies towards agricultural development
could be grouped under four major categories.
1. Attention to the tillers of the soil;
2. Protecting the ecological foundations of development;
3. Development of rural infrastructure and the production and distribution of the inputs needed for
higher productivity, and
4. Harnessing science and technology for accelerating the pace of agricultural progress.
The first phase of his agricultural policy witnessed tremendous agrarian reforms,
institutional changes, development of major irrigation projects and strengthening of cooperative
credit institutions. The most important contribution of land reforms was abolition of intermediaries and
giving land titles to the actual cultivators. The Community Development Programme, decentralized
planning and the Intensive Area Development Programmes were also initiated for regenerating
Indian agriculture.
Community Development Programme: It has been the biggest rural reconstruction scheme undertaken
by the government of free India. Scholars highlighted on two aims of Community Development
Programme. They are- (1) achieving substantial agricultural production and considerable progress in the
sphere of communication, rural health and rural education and (2) transforming the socio-economic life
of the village through a process of integral cultural change. The main objectives of the programme are
given below:
1. To increase agricultural production both quantitatively and qualitatively.
2. To solve the problem of rural unemployment.
3. To develop the means of transport and communication in the villages through repairing old roads
and constructing new roads.
4. To bring about development in the sphere of primary education, public health and recreation.
5. To assist the villagers to build good and cheap houses with the help of modern plans and new
building methods.
6. To set up and encourage cottage industries and indigenous handicrafts.
National Extension Service Programme
The National Extension Service program was formulated in 1953. It was formed after the
government realized that the Community Development Programme cannot be implemented all over
India due to a shortage of funds. NES was aimed to extent the services under CDP to all the uncovered
areas.
During the First Five Year Plan the overall agricultural production had increased by 17%.
National Extension Services and Community Development Projects (1951) were extended to cover 25 %
of the country’s area. During the Second Five Year Plan, the overall agricultural production had
increased by 16%. However, towards the later years of Nehru era, the food grain production declined
due to successive failure of monsoons which led to food crisis. Government during this phase remained
dependent upon foreign countries for food to feed the rising population.
