{"id":341636,"date":"2025-06-28T21:40:30","date_gmt":"2025-06-28T16:10:30","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=341636"},"modified":"2025-06-28T21:40:30","modified_gmt":"2025-06-28T16:10:30","slug":"psir-power-50-day-23-capsule-planning-and-economic-development-practice-qs","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/psir-power-50-day-23-capsule-planning-and-economic-development-practice-qs\/","title":{"rendered":"PSIR Power 50 \u2013 Day 23 Capsule: PLANNING AND ECONOMIC DEVELOPMENT+ Practice Qs"},"content":{"rendered":"

Hello aspirants,<\/p>\n

Today\u2019s revision capsule of PSIR optional preparation covers PLANNING AND ECONOMIC DEVELOPMENT<\/strong>. There are three 20-markers, nine 15-markers, and four 10-markers<\/strong> from this topic in last 12 years.<\/p>\n

 <\/p>\n

\u00a0<\/strong><\/p>\n

1.\u2003PLANNING AS A DEVELOPMENT STRATEGY<\/strong><\/p>\n\n\n\n\n\n\n\n
Building-block<\/strong><\/td>\nCore Idea<\/strong><\/td>\nVoices & Texts<\/strong><\/td>\n<\/tr>\n
Definition<\/strong><\/td>\nPlanning = conscious choice of ends + means, weighing alternatives for fastest, cheapest attainment<\/td>\nStandard textbook line (Ghosh, Meier)<\/td>\n<\/tr>\n
Why LDCs plan<\/strong><\/td>\nScarce resources, need for minimum social overhead capital, market failure, poverty targets<\/td>\nAmiya Bagchi<\/strong>, Prof. Sukhamoy Chakravarty<\/strong><\/td>\n<\/tr>\n
Soviet inspiration<\/strong><\/td>\n1928-37 Five-Year Plans convinced many nationalists (esp. Nehru) that \u201cbig push\u201d works<\/td>\nJawaharlal Nehru<\/strong>, P.C. Mahalanobis<\/strong><\/td>\n<\/tr>\n
Indigenous blueprints<\/strong><\/td>\n– 1938 National Planning Committee (Nehru)\u2002- Bombay Plan (Tata-Birla et al., 1944)\u2002- People\u2019s Plan (M. N. Roy, 1945)\u2002- Gandhian Plan (Shriman Narayan, 1944)<\/td>\nA. D. Shroff<\/strong>, J. C. Kumarappa<\/strong>, Mahatma Gandhi<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Constitutional hook<\/strong>: \u201cEconomic & Social Planning\u201d placed in the Concurrent List<\/strong> during 1946 Cabinet-Mission talks\u2014so both Union and States may legislate.<\/p>\n

 <\/p>\n

2.\u2003MIXED-ECONOMY COMPROMISE (1948 Industrial Policy Resolution)<\/strong><\/p>\n

    \n
  • Public sector \u2192 \u201ccommanding heights\u201d (basic & heavy industries, infrastructure, defence).<\/li>\n
  • Private sector \u2192 consumer goods & light industry, but<\/strong> under licences (Licence-Permit Raj<\/em>).<\/li>\n
  • Regulatory tools \u2192 tariffs, import controls, MRTP Act 1969, tax incentives.<\/li>\n<\/ul>\n

    This three-way bargain matched Bagchi\u2019s triad<\/strong> of (i) nationalist conservatives, (ii) technocrats, (iii) socialists\u2014all agreeing on planning, if for different ends.<\/p>\n

     <\/p>\n

    3.\u2003THE PLANNING COMMISSION (1950-2014): ORGANOGRAM & DEBATE<\/strong><\/p>\n

    \u00a0<\/strong><\/p>\n\n\n\n\n\n\n\n
    <\/td>\nDetails<\/strong><\/td>\nApplause<\/strong><\/td>\nBrickbats<\/strong><\/td>\n<\/tr>\n
    Birth<\/strong><\/td>\nCabinet Resolution, March 1950\u2014extra-constitutional staff<\/em> agency. PM as ex-officio Chair.<\/td>\nRapid mobilisation of scarce capital; Mahalanobis strategy for heavy industry<\/td>\nS. C. Dube<\/strong>: \u201csuper-cabinet\u201d; ARC (1968)<\/strong> flagged overlap with ministries<\/td>\n<\/tr>\n
    Composition drift<\/strong><\/td>\nFrom small \u201cserious thinkers\u201d \u2192 quasi-ministry with Ministers of State<\/td>\n\u201cEconomic Cabinet\u201d (Asok Chanda) fostered inter-sectoral view<\/td>\nNehru himself lamented its bloated bureaucracy<\/td>\n<\/tr>\n
    Centre\u2013State frictions<\/strong><\/td>\nAllocated Plan grants, sidelining Finance Commission<\/strong><\/td>\nBackward states got assured funds<\/td>\nK. Santhanam<\/strong>: near-unitary working in a federation<\/td>\n<\/tr>\n
    Directive <\/strong>\u2192<\/strong> Indicative<\/strong><\/td>\nPost-1991 reforms: market pricing, fiscal deficit caps; Commission now think-tank + evaluator<\/td>\nAllowed PPPs, telecom boom, highways (Golden Quadrilateral)<\/td>\nCritics: neither had teeth nor autonomy; still micromanaged centrally<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    2015 onward the body is replaced by NITI Aayog<\/strong> (policy think-tank with \u201cco-operative & competitive federalism\u201d), but the analytic DNA (five-year visioneering) remains.<\/p>\n

     <\/p>\n

    4.\u2003LIBERALISATION & STRUCTURAL ADJUSTMENT (1991-on)<\/strong><\/p>\n

      \n
    1. Trigger<\/strong>: BoP crisis, Gulf-war oil shock, Soviet market collapse.<\/li>\n
    2. IMF\/World Bank SAP<\/strong>: devaluation, trade liberalisation, disinvestment, FDI caps raised.<\/li>\n
    3. New Planning Modality<\/strong>:<\/li>\n<\/ol>\n
        \n
      1. \n
          \n
        • \u201cIndicative targets, not physical allocations\u201d (French model).<\/li>\n
        • Focus on infrastructure gaps, social sectors, poverty indices.<\/li>\n
        • World Bank study (1993)<\/strong> urged monitoring productivity & profitability, not merely expenditure.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n

           <\/p>\n

          5.\u2003RURAL TRANSFORMATION: LAND REFORMS TO GREEN REVOLUTION<\/strong><\/p>\n

          \u00a0<\/strong><\/p>\n

          5.1\u2003Phase-I\u2003(1949-60)\u2003Abolition of Zamindari & Tenancy Reform<\/strong><\/p>\n\n\n\n\n\n\n
          Measure<\/strong><\/td>\nAim<\/strong><\/td>\nNationwide Outcome<\/strong><\/td>\nKey Obstacles<\/strong><\/td>\n<\/tr>\n
          Zamindari Abolition<\/strong><\/td>\nRemove intermediaries, give tenants proprietary rights<\/td>\n~20. million tenants became owners (per Planning Commission Eval. 1964<\/strong>)<\/td>\nWeak records, litigation, \u201cpersonal cultivation\u201d loophole<\/td>\n<\/tr>\n
          Tenancy Acts<\/strong><\/td>\nSecure tenure, limit rent (1\/4\u20131\/6 of gross produce)<\/td>\nSuccess stories: Operation Barga<\/strong> (W. Bengal 1978)<\/td>\nOral leases hard to prove<\/td>\n<\/tr>\n
          Land Ceilings<\/strong><\/td>\nRedistribute surplus land<\/td>\nEffective only after 1972 National Guidelines; SC\/ST priority<\/td>\nBenami transfers, high initial ceilings, state exemptions<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

          \u00a0<\/strong><\/p>\n

          5.2\u2003Phase-II\u2003(1951-70)\u2003Co-operative & Ethical Experiments<\/strong><\/p>\n

            \n
          • Co-operative Farming Drive<\/strong> \u2013 Nagpur Resolution 1959; fizzled by Plan-III.\n
              \n
            • Critique:<\/strong> Charan Singh<\/strong>, N. G. Ranga<\/strong>, Rajaji<\/strong> feared collectivism.<\/li>\n
            • Reality:<\/strong> \u201cBogus cooperatives\u201d by landlords vs. poorly irrigated gov\u2019t farms.<\/li>\n<\/ul>\n<\/li>\n
            • Bhoodan \/ Gramdan<\/strong> \u2013 Acharya Vinoba Bhave<\/strong> (1951\u219260s).\n
                \n
              • Moral land gift (~4 million acres pledged; less cultivable).<\/li>\n
              • Success pockets in tribal Orissa, Andhra. Faded after 1965.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n

                5.3\u2003Phase-III\u2003(1966-90)\u2003Green Revolution<\/strong><\/p>\n\n\n\n\n\n\n
                Component<\/strong><\/td>\nLaunch & Champions<\/strong><\/td>\nTechnological Package<\/strong><\/td>\nPolitical-economic Effects<\/strong><\/td>\n<\/tr>\n
                IADP & HYV<\/strong><\/td>\nLal Bahadur Shastri, C. Subramaniam<\/strong>, Indira Gandhi<\/td>\nMexico-Philippines dwarf wheat & rice, fertilisers, tube-wells, credit<\/td>\nFood-grain \u219135 % (1968-71); India net-exporter 1980s<\/td>\n<\/tr>\n
                Institutional Support<\/strong><\/td>\nAgricultural Prices Commission 1965 \u2192 MSP; Nationalised Banks 1969<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
                Critiques<\/strong><\/td>\nDaniel Thorner<\/strong>, Wolf Ladejinsky<\/strong> \u2013 rich-farmer bias; G. S. Bhalla<\/strong> \u2013 diffusion later<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

                \u201cBullock Capitalists\u201d<\/strong> \u2013 Lloyd & Susanne Rudolph<\/strong> label for emergent kulaks (Jats, Yadavs, Marathas, Reddys, Vokkaligas). Politically expressed via BKD \u2192 BKU, Shetkari Sanghatana, Karnataka Ryat Sangha.<\/p>\n

                 <\/p>\n

                6.\u2003SOCIAL CONSEQUENCES & POLITICAL MOBILISATION<\/strong><\/p>\n\n\n\n\n\n\n
                Beneficiary Bloc<\/strong><\/td>\nNew Vehicles<\/strong><\/td>\nCounter-Currents<\/strong><\/td>\n<\/tr>\n
                Rich Peasants \/ Kulaks<\/strong><\/td>\nState-level farmer parties; decisive in coalition era (post-1989)<\/td>\nAnti-price-rise agitations (BKU, 1988-89), MSP demands<\/td>\n<\/tr>\n
                Small & Marginal Farmers<\/strong><\/td>\nCredit co-ops, Panchayat empowerment<\/td>\nRising inequality; wage employment still seasonal<\/td>\n<\/tr>\n
                Landless \/ Dalits<\/strong><\/td>\nNaxalbari (1967), Land-grab movements (1970s), BSP politics<\/td>\nPartial land distribution; MGNREGS later (2005) addressed wage security<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

                 <\/p>\n

                7.\u2003KEY CRITIQUES & REFORM SUGGESTIONS<\/strong><\/p>\n

                  \n
                1. \u201cUnitary Planning in a Federal Polity\u201d<\/strong> \u2013 K. Santhanam<\/strong>; urges devolving plan-making to states.<\/li>\n
                2. ARC & later committees<\/strong> \u2013 keep Commission to formulation; execution by line ministries & states.<\/li>\n
                3. Chakravarty Committee (1985)<\/strong> \u2013 monetary-fiscal coordination; curb populist deficit financing.<\/li>\n
                4. Post-2015 NITI Aayog<\/strong> \u2013 outcome-based monitoring, SDG localisation, cooperative-competitive ranking of states.<\/li>\n<\/ol>\n

                   <\/p>\n

                  8.\u2003 SCHOLAR\/COMMITTEE<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
                  Scholar \/ Body<\/strong><\/td>\nClassic Line \/ Contribution<\/strong><\/td>\n<\/tr>\n
                  P. C. Mahalanobis<\/strong><\/td>\nHeavy-industry growth model (Plan-II)<\/td>\n<\/tr>\n
                  Amiya Kumar Bagchi<\/strong><\/td>\nTri-coalition support for planning; \u201csatisfactory vs. maximal growth\u201d<\/td>\n<\/tr>\n
                  Asok Chanda<\/strong><\/td>\nPlanning Comm. = \u201cEconomic Cabinet\u201d<\/td>\n<\/tr>\n
                  J. C. Kumarappa Committee (1949)<\/strong><\/td>\nTight definition of personal cultivation; urged co-ops<\/td>\n<\/tr>\n
                  N. G. Ranga<\/strong><\/td>\nOpposed ceilings; family farms best<\/td>\n<\/tr>\n
                  Charan Singh<\/strong><\/td>\nPeasant-centric agrarian policy; sceptical of co-ops<\/td>\n<\/tr>\n
                  L. I. & S. H. Rudolph<\/strong><\/td>\n\u201cBullock capitalists\u201d thesis<\/td>\n<\/tr>\n
                  G. S. Bhalla<\/strong><\/td>\nTemporal diffusion of Green Revolution gains<\/td>\n<\/tr>\n
                  World Bank (1993)<\/strong><\/td>\nShift Commission to productivity\/ROI focus<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

                   <\/p>\n

                  Takeaways<\/strong><\/p>\n