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Unit 11: India Independent to 1964

Notes

The basic weakness of the Community Development programme, the Panchayati Raj and
the cooperative movement was that they ignored the class division of the rural society
where nearly half the population was landless or had marginal holdings and was thus
quite powerless.

The village was dominated socially and economically by the capitalist farmers and the rich and
middle peasantry; and neither the dominant rural classes nor the bureaucrats could become agents
of social transformation or popular participation.

11.3 Planning and State Controlled Industrializations

Apart from extreme poverty, illiteracy, a ruined agriculture and industry, the structural distortions
created by colonialism in the Indian economy and society (such as the rupture of the link between
various sectors of the Indian economy and their getting articulated with the metropolitan economy
in a dependent manner) made the future transition to self-sustained growth much more difficult.
It is this legacy of colonial structuring which independent India had to undo so that conditions
could be created for rapid industrial development. The task of attempting a modern industrial
transformation, two hundred years after the first industrial revolution and nearly a hundred years
after several other countries had industrialized, was a stupendous one. Besides this handicap
created by colonialism and the several built-in disadvantages faced by the latecomer, India had to
confront political and economic conditions which had changed radically. New and innovative
strategies were called for if success was to be achieved.
While undertaking this difficult and complex task, India, unlike many other post-colonial societies,
had certain advantages. First, a small but independent (Indian owned and controlled) industrial
base had emerged in India between 1914 and 1947. This was achieved, amongst other things, by
the Indian capitalist class seizing the opportunities created during this period by the weakening of
the imperialist stranglehold during the two world wars and the Great Depression of the 1930s. By
the time India gained political independence in 1947 Indian entrepreneurs had successfully
competed with European enterprise in India and with foreign imports, in the process capturing
about 75 per cent of the market for industrial produce in India. Indian capitalists had also acquired
dominance over the financial sphere, i.e., banking, life insurance, etc.
By independence, therefore, India had, ‘in spite of and in opposition to colonialism’, developed an
independent economic base from which to attempt a take-off into rapid independent industrialization.
She did not, like many other post-colonial countries, get pushed into a neo-colonial situation
where, while formal political independence was achieved, the erstwhile colony’s economy continued
to be essentially dominated by metropolitan interests.
A mature indigenous entrepreneurial class, which could serve as the agency for carrying out a
substantial part of the post-independence planned development was an asset to India. Further, a
high degree of concentration and consolidation had led, during the colonial period itself, to the
emergence of large business conglomerates like the Birlas, Tatas, Singhanias, Dalmia-Jains, etc.,
with interests in different areas like trade, banking, transport, industry and so on. Such
conglomerates, like the zaibatsu in Japan or the chaebol in South Korea, were extremely important
in enabling late entrants to world capitalism to successfully compete with the already established
foreign capital and especially multinational corporations. The absence of the agency of a mature,
indigenous entrepreneurial class was sorely felt in many of the post-colonial African states and
can be seen as a critical drawback even today, for example in most parts of the former Soviet
Union.
Second, India was fortunate to have a broad societal consensus on the nature and path of
development to be followed after independence. For example, the Gandhians, the Socialists, the

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