Page 27 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 2: Development Strategies in India: Planning in India: Objectives, Strategies and Evaluation

Models of Economic Development : Nehru Vs. Gandhi Notes
Nehru-Mahalanobis model of development emerged as the driving force of the strategy of development
adopted in the mid-fifties at the time of formulation of the Second Five Year Plan. This strategy has
continued right upto the eighties with a short interregnum about 2-3 years when Janata Party was in
power during 1977-80. Nehru-Mahalanobis model was based on long run development strategy which
accorded greater preference to the long-term goals of development, rather than succumbing to the
immediate and short-term goals. The strategy, therefore emphasised
(a) a high rate of saving so as to boost investment to a higher level,
(b) it preferred a heavy industry bias to development the industrial base of the economy,
(c) it opted for the protectionist path so as the safeguard infant industry,
(d) it encouraged import-substitution so as the achieve self-reliance, and
(e) it aimed at enlargement of opportunities forthless privileged sections of the society. Growth
wave social justice was thus the goal of Nehru-Mahalanobis model since it intended to foster a
self-generating path development with an assurance to the common man the poverty,
unemployment, disease and ignorance would removed so that individuals could realise their
potent with the extension of social and economic opportunities. Since it was the credo of the
fifties that market mechanism could not bring about judicious allocation of the sources to meet
the objective of growth with social justice, a much greater role was assigned to the State. The
principal functions of the State in the economic sphere were the development of economic and
social infrastructure. The economic infrastructure was concerned enlargement of irrigation,
power, transport and communications so as to expand markets as also to remove constraints in
the form of power on industrial development and irrigation for agricultural development. He
increasing social infrastructure in the form of education and health, the State intended to develop
skilled man power so that it could provide the necessary skills need for the functioning of the
new industries. To channelite investment into socially desired lines of production, the State
nationalised major banks. Thus, in the Nehru-Mahalanobis model the State controlled the
commanding heights of the economy through the public sections.
The Gandhian Model of Growth
Acharya S.N. Agarwala brought out the ‘Gandhian Plan’ in 1944 and re-affirmed it in 1948. These
publications form the basis of Gandhian planning or ‘Gandhian model of growth. The basic objective
of the Gandhian model is to raise the material as well as the cultural level of the Indian masses so as
to provide a basic standard of life. It aims primarily at improving the economic conditions of the 5.5
lakh villages of India and therefore, it lays the greatest emphasis on the scientific development of
agriculture and rapid growth of cottage and village industries.
Agriculture

The Gandhian model aims at the reform of agriculture as the most important sector in economic planning
in India. The primary objective of agricultural development is national self-sufficiency in foodstuffs
and maximum regional self-sufficiency in food. This has to be achieved not only by larger and better
inputs but also through land reforms-change in the system of tenure, abolition of the proprietary rights
on land, consolidation of holdings, organisation of co-operative farms, etc. Money-lending should be
abolished, and there should be increased credit facilities for the farmers. The Gandhian model lays
special emphasis on dairy farming as an occupation and as an auxilliary to agriculture.

Cottage and Village Industries
The primary aim of the Gandhian plan is the attainment of maximum self-sufficiency in village
communities. Hence, the plan emphasises the rehabilitation, development and expansion of cottage
industries side by side with agriculture. Spinning and weaving are given the first place. The
manufacturing of khadi is important and it is almost on the same level as the production of rice and
wheat. “Just as villagers cook their own roti (bread) and rice so must they make their own khadi for
personal use. The surplus, if any they may sell.” The Gandhian plan outlines a scheme for making

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