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Unit 3: Planning and Economic Development in the Era of Globalisation

as well as individual development. Decrease of inequalities of income and the formation of a Notes
socialist society create conditions in which everyone will have equal opportunities in the matter
of education and employment. Additionally, there will be no strength of economic power and
exploitation of one individual by another.
A very small group of persons in India are better-off and have not experienced poverty and
misery. These are rich landlords in the merchants, countryside, bankers, industrialists, top
officials of the Government, etc. The vast majority of people are, nevertheless, very poor because
their income is very low. Extreme inequalities of income and wealth in India have their roots in
the traditional social development and essentially, thus, the reduction of inequalities of income
and wealth would be possible only through abolishing the semi-feudal relations of production
in our villages. The Planning Commission sketched such measures as the removal of all
intermediaries and the ceiling on landholding for decrease of inequalities of wealth and income
in rural areas.
It is essential to note that another aspect of inequalities of income in India is the large differences
between rural and urban incomes which are bound to be highlighted over the years with
industrialisation and economic growth. The Planning Commission has suggested measures to
raise fair price to farmers for their products, development of agro-based industries, agricultural
productivity, etc.
However, reduction of income inequalities has always been stated as one of the goals in all the
plans, in terms of priority this objective consistently got a very low position. This could possibly
be so because Nehru, the architect of Indian planning, did not consider that the problem of
economic inequalities of income and wealth could ever be solved just by redistribution. The
Fourth Plan stated clearly:
“In a rich country, greater equality could be achieved in part by transfer of income through fiscal, pricing
and other policies. No significant results can be achieved through such measures in a poor country.”
Ultimately, you must note that the Indian planners visualised the establishment of a socialist
society in which everyone would have equal opportunities in the matter of occupation, education,
etc. Wealth would be disseminated equally and there would be no absorption of economic
power in the hands of a few individuals or families. Above all, there would be no scope for
mistreatment of man by man. The first three plans talked of the establishing of a “socialist
pattern of society” or “development along socialist lines”. The Fourth Plan talked about the
“establishment of a social and economic democracy”. It specified:
“The broad objectives of planning could thus be defined as rapid economic development accompanied by
continuous progress towards equality and social justice and the establishment of a social and economic
democracy.”
However, it is also important to consider that the definition of economic democracy as given by
the Indian planners is distinct from what is commonly understood elsewhere. In prosperous
economies where abysmal poverty has been eliminated, economic democracy is almost the
same as a free market economy. In India, nevertheless, the broad definition of economic democracy
is the availability of opportunities for drinking water supply, public health and sanitation,
education, etc., for large masses of people, irrespective of whether they are rich or poor.
After the starting of the Liberalisation, Privatisation and Globalisation model of growth in 1991,
these goals have been entirely abandoned at the altar of market forces.

Self Assessment

Fill in the blanks:

1. In an …………………… society, various types of retrogressive forces operate, such as
inequalities of income, poverty, absence of equal opportunities for progress, etc.

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