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

You need to recognise that Nehru model of growth exhibited other weaknesses too. It failed to Notes
offer a national minimum level of living despite five plans. Almost 40 per cent of the population
lived below the poverty line. The number of unemployed and under-employed was quite high
and was rising continuously. Inequalities of income and wealth had deteriorated and there was
a growing concentration of economic power in the hands of a few. Land reforms were not
properly executed, resulting in much dissatisfaction in rural areas. It was in this relation that the
Janata Party in 1977 adopted Gandhian Socialism as the main goal of development and the
Janata Party’s Sixth Plan (1978–83) was extensively based on the Gandhian Model of economic
growth.

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 ‘Gandhi – a model of growth. The basic
goal of the Gandhian model is to advance the material as well as the cultural level of the Indian
masses so as to deliver a basic standard of life. It intends primarily at enhancing the economic
conditions of the 5.5 lakh villages of India and thus, it lays the greatest emphasis on the scientific
development of agriculture and quick growth of cottage and village industries.

Agriculture

It is noteworthy to know that the Gandhian model intends at the reform of agriculture as the
most essential sector in economic planning in India. The primary goal of agricultural development
is national self-sufficiency in foodstuffs and maximum regional self-sufficiency in food. This has
to be attained not only by larger and better inputs but also by land reforms—change in the
system of tenure, consolidation of holdings, organisation of co-operative farms, abolition of the
proprietary rights on land, etc. Money-lending should be eradicated, and there should be increased
credit facilities for the farmers.

Notes The Gandhian model lays special emphasis on dairy farming as an occupation and
as an auxiliary to agriculture.

Cottage and Village Industries

It is important to note that the plan focuses the rehabilitation, development and expansion of
cottage industries side by side with agriculture. Spinning and weaving are given the first place.
The production of khadi is essential and it is nearly on the same level as the production of rice
and Gandhian plan outlines a scheme for making every village self-sufficient in cloth.
Simultaneously, the Gandhian plan wants the State to take into consideration the revival and
expansion of rural cottage industries as the primary plank of its industrial planning.

3.2.3 Liberalisation, Privatisation and Globalisation (LPG) Model of
Development

You must be aware that the LPG Model of development which was launched in 1991 by the then
Finance Minister Dr Man Mohan Singh with a big bang was proposed to charter a new strategy
with focus on Liberalisation, Privatisation and Globalisation (LPG). Various major changes at
the domestic level were introduced.
1. Areas hitherto reserved for the public sector were opened to private sector. The Government
proposed to transfer the loss-making units to the private sector, but it was unsuccessful

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