ARTICLE CREDITS
Economic & Political Weekly
Special Article
Dated: November 17, 2007
| Title | The Recovery of India: Economic Growth in the Nehru Era |
|---|---|
| Author | Professor Pulapre Balakrishnan |
| Category | Studies about Jawaharlal Nehru |
| Number of Pages | 15 |
| Language | English |
| File Size | 392 KB |
| File Type | |
| Country of Publication | India |
| Main Topics | Introduction, Nehru-Mahalanobis Strategy, The Heavy Goods Sector, Supply-side Model, Wage Goods, Appraisal of Vakil-Brahmananda Plan, Link between Agriculture and Industry, Increase in Income Levels, Nehru’s Speeches, ARecord of Growth in the Nehru Era, Drawing Parallels: Industrial Revolution, Growth Comparisons, Comparison with OECD Economies, Caricature of a Vision: Through a Glass, Darkly, The Neglect of Agriculture, The Public Sector Enterprise as a Black Hole, Resource Mobilisation, Performance of Public Sector, Neglect of Primary Education, Conclusions, Achievements of Nehru Era, Notes... |
Summary Note of this Document
The study examines India’s economic growth during the Nehru era (1950–1964), a transformative period that shifted the nation from colonial stagnation to sustained growth. It challenges negative perceptions of Jawaharlal Nehru’s policies, often blamed for a "wasted past," by analyzing the Nehru-Mahalanobis strategy, which emphasized capital goods production to drive long-term economic growth.
Key points include:
- Nehru-Mahalanobis Strategy: This dual-sector model prioritized heavy industries (e.g., steel, machinery) over consumer goods to boost future output and investment. Unlike Soviet-style approaches, it avoided coercive measures, aligning with India’s democratic values for sustainable growth.
- Heavy Goods Sector: Investments in capital-intensive industries like metallurgy and chemicals aimed at self-reliance, supporting industrial and agricultural growth, as well as defense and rural development.
- Agriculture-Industry Link: Mahalanobis recognized agriculture’s critical role, with industrial inputs addressing constraints to boost agricultural productivity, a key driver of economic growth.
- Vakil-Brahmananda Plan Critique: This alternative plan underestimated capital goods’ role in agriculture and lacked mechanisms for autonomous labor demand, though it emphasized small-scale industries to meet consumer goods demand.
- Public Sector and Resource Mobilization: The Second Five-Year Plan relied on public sector enterprises and tax reforms to fund industrialization. Public sector savings grew faster than private counterparts, though later inefficiencies arose from political patronage.
- Agricultural Growth: Contrary to perceptions of neglect, significant investments in agricultural inputs, subsidies, and price guarantees led to growth outpacing population increases, a stark contrast to colonial-era famines.
- Income Growth and Industrialization: Policies focused on raising income levels to drive industrialization and address balance of payments deficits, fostering independent development.
- Growth Comparisons: India’s growth surpassed that of OECD economies and colonial-era performance, with life expectancy rising from 32 to 43 years. Nehru’s 5% growth target was ambitious, reflecting significant progress from a low base.
- Neglect of Primary Education: A key criticism is the low allocation for education, which economists like Krishnamurti argued hindered broader development, a challenge persisting beyond the Nehru era.
- Achievements and Legacy: The era laid foundations for the Green Revolution, increased per capita grain availability, and established key industries. Nehru’s policies drove sustained growth, distinct from Soviet models, and set the stage for future economic progress.
- Unintended Consequences: Bureaucracy, corruption, and reluctance toward foreign investment led to technological lags and inefficiencies, with "Nehruvian socialism" inadvertently fostering a distorted form of capitalism.
The study underscores the Nehru era’s remarkable economic recovery, highlighting its strategic focus on industrialization, agriculture, and self-reliance, while acknowledging shortcomings like educational neglect and later public sector inefficiencies. Through comparative analysis, it positions the era as a pivotal chapter in India’s economic history, with lasting impacts on its growth trajectory.
Click on the options below to read the full article.
×