ECONOMIC DEVELOPMENT IN INDIA

Finan­cial Sec­tor Plan­ning Commission

The suc­cess of a pro­gram large­ly depends upon the plan­ning made for it. So, the lead­ers of inde­pen­dent India formed a Plan­ning Com­mis­sion in 1950. The Prime Min­is­ter is the ex-offi­cio Chair­man of the Plan­ning Commission.

Objec­tives of the Plan­ning Commission

• It iden­ti­fies the objects of our eco­nom­ic pol­i­cy and deter­mines eco­nom­ic goals to be achieved.

• It deter­mines eco­nom­ic pri­or­i­ties and tries to ensure that the resources are uti­lized to the max­i­mum pos­si­ble extent.

• It also ensures the fair dis­tri­b­u­tion of pro­duce and the ben­e­fits of devel­op­ment to the largest num­ber of people.

Five Year Plans

The first five year plans start­ed in 1951 in view of eco­nom­ic devel­op­ment of the coun­try. It also aims at ensur­ing that the eco­nom­ic resources of the coun­try do not become the monop­oly of a few, but are dis­trib­uted fair­ly among the peo­ple. The plans also help the gov­ern­ment in tack­ling the prob­lems of pover­ty, unem­ploy­ment and price rise.

Nowa­days, the Eleventh Five Year Plan is being imple­ment­ed. Due to the Indo-Pak war of 1965, severe drought, gen­er­al rise in prices, deval­u­a­tion of cur­ren­cy, and ero­sion of resources avail­able for Plan pur­pos­es, there were three Annu­al Plans (instead of a five year plan) between 1966 and 1969. In the 1979–80 Annu­al Plan, it was decid­ed to ini­ti­ate a new plan after the then ongo­ing Fifth Five Year Plan, with new pro­grammes and pri­or­i­ties. As a result of the fast chang­ing polit­i­cal sit­u­a­tion at the cen­tre, the Eighth Five Year Plan could not take off. It was there­fore decid­ed to treat the 1990–91 and 1991–92 plans as sep­a­rate Annu­al Plans.

In 1991, the Gov­ern­ment of India made a new eco­nom­ic pol­i­cy and gave impor­tance to the pri­vate sec­tors in Indi­a’s eco­nom­ic development.

Agri­cul­tur­al Development

Agri­cul­ture is the back­bone of Indi­a’s econ­o­my. Apart from pro­vid­ing food grains, veg­eta­bles, fruits, puls­es and oth­er edi­bles, it also pro­vides raw mate­ri­als for many of our indus­tries. The cot­ton and tex­tile indus­tries, sug­ar, edi­ble oils and plan­ta­tion all depend on agriculture.

The peo­ple involved in the First Five Year were aware of the impor­tance of plan agri­cul­ture in Indi­a’s eco­nom­ic devel­op­ment. There­fore, the first few five year plans, gave the high­est pri­or­i­ty to the agri­cul­tur­al sec­tor by allo­cat­ing 37 per cent to it. In the sub­se­quent plans also sub­stan­tial allo­ca­tions to the tune of 20 and 24 per cent were allo­cat­ed to this sec­tor. Steps were tak­en to enhance the pro­duc­tion of agri­cul­ture. These steps were:

1. A large num­ber of farm­ers had small hold­ings which were uneco­nom­ic. There­fore, land reforms were made by abol­ish­ing the zamin­dari sys­tem and redis­trib­ut­ing land in a more equi­table manner.

2. Small and scat­tered land­hold­ings were con­sol­i­dat­ed SO that ben­e­fits of mech­a­nized farm­ing could be availed.

3. A large area of land lying uncul­ti­vat­ed, unclaimed or fal­low, was brought under cul­ti­va­tion with the help of mod­ern agri­cul­tur­al facilities.

4. This five year plan empha­sised the devel­op­ment of irri­ga­tion facil­i­ties so as to help the farm­ers to avoid crop fail­ure due to lack of rain. For irri­ga­tion pur­pos­es many dams were con­struct­ed on rivers, which were also used to gen­er­ate hydroelectricity.

5. Many mul­ti-pur­pose Riv­er Val­ley Projects were start­ed, which, as the name itself sug­gests, had mul­ti-faceted benefits.

6. To avoid the loss of crops due to pests and insects and to raise the fer­til­i­ty of The soil, the use of chem­i­cal fer­til­iz­ers and pes­ti­cides was encour­aged. gov­ern­ment set up fer­til­iz­er fac­to­ries at Neyu­veli, Rourkela, Nan­gal, Sin­dri and Trom­bay. They start­ed pro­duc­ing chem­i­cal fer­til­iz­ers in large quantities.

7. High yield­ing vari­ety seeds were devel­oped to enhance agri­cul­tur­al pro­duc­tion, espe­cial­ly of essen­tial crops, such as wheat, rice and cotton.

8. Mod­ern equip­ment and machin­ery. such as trac­tors, sow­ing machines, thresh­ers and har­vesters were pro­vid­ed on low inter­est rates.

9. Orga­ni­za­tions, such as Nation­al Seeds Cor­po­ra­tion and State Farms Cor­po­ra­tion of India pro­vid­ed farm­ers with good seeds at rea­son­able prices. Loans were also pro­vid­ed to the farm­ers to buy agri­cul­tur­al implements.

10. The Depart­ment of Agri­cul­tur­al Research and Edu­ca­tion was set up in 1973 for con­duct­ing research.

Mul­ti-Pur­pose Riv­er Val­ley Projects

The gov­ern­ment has con­struct­ed many mul­ti-pur­pose riv­er val­ley projects that serve a

num­ber of pur­pos­es. They serve the fol­low­ing impor­tant purposes:

1. They help in irri­ga­tion. They store water in sev­er­al reser­voirs, which is tak­en by canals to the dri­er areas. For exam­ple, the water of Rajasthan Canal, helps in irri­gat­ing the desert areas of Rajasthan.

• The reser­voirs serve the pur­pose of fish­ing grounds also.

• Dams are con­struct­ed under the riv­er val­ley projects which help in check­ing floods.) For exam­ple, the Damodar Val­ley Project has been great­ly help­ful in check­ing the annu­al flood of the Damodar riv­er in Ben­gal and Bihar.

Indus­tri­al Development

 The indus­tri­al sec­tor is very impor­tant in the eco­nom­ic devel­op­ment of a coun­try. In fact, agri­cul­ture itself is depen­dent on indus­try for its devel­op­ment. For exam­ple, trac­tors, thresh­ers, elec­tric motors are all indus­tri­al prod­ucts. At the time of inde­pen­dence. India had a very few indus­tries. In the Sec­ond Five Year Plan, empha­sis was laid on indus­tri­al development.

Many indus­tries were set up under the first few five year plans, These indus­tries include iron and steel, cement, chem­i­cals, fer­til­iz­ers, petro­le­um, loco­mo­tive engines and rail­way wagons.

Since India import­ed steel from oth­er coun­tries, steel plants were installed at Bokaro, Salem and Durgapur.

(Sev­er­al fer­til­iz­er fac­to­ries were set up, such as at Sin­dri. Nan­gal, Barau­ni and Trombay.

A fac­to­ry was set up at Chit­taran­jan (West Ben­gal) to pro­duce loco­mo­tive engines, Fac­to­ries at Kapurtha­la and Per­am­bur were set up to pro­duce rail­way engines.

Heavy and light machin­ery for sug­ar. cement and tex­tile indus­tries were pro­duced in engi­neer­ing indus­try. The Hin­dus­tan Machine Tools was set up. which has man­u­fac­tur­ing units in var­i­ous parts of the country.

* Empha­sis was also laid on set­ting up tex­tile indus­tries. Great progress in the pro­duc­tion of tex­tiles was made, as a result of which India became one of the major exporters of textiles.

* A fac­to­ry was set up at Vishakha­p­at­nam for build­ing ships. Many fac­to­ries were set up in dif­fer­ent parts of the coun­try for the pro­duc­tion of pharmaceuticals.

*Sug­ar mills were estab­lished in sug­ar pro­duc­ing areas, such as Uttar Pradesh, Maha­rash­tra, Pun­jab and Haryana.

*Steps were tak­en to pro­mote auto­mo­bile and elec­tron­ics industry.

 Small-scale and Cot­tage Industries

Small-scale and cot­tage indus­tries have also been encour­aged by our gov­ern­ment to enhance the eco­nom­ic con­di­tion of the coun­try Small-scale indus­tries can be set up with lim­it­ed cap­i­tal and they pro­vide employ­ment to a large num­ber of peo­ple. Some­times they work as ancil­lar­ies of larg­er indus­tries and pro­vide com­po­nents or man­u­fac­ture sub­sidiary items. The gov­ern­ment has offered some incen­tives such as tax ben­e­fits for set­ting up small-scale industries.

Cot­tage indus­tries have always exist­ed in our coun­try, although they received a set­back as a result of British poli­cies. Items like leather.

Remov­ing Pover­ty and Unemployment

The Gov­ern­ment of India has pre­pared a num­ber of schemes and launched sev­er­al pro­grammes to solve the prob­lems of pover­ty and unemployment.

* The Gov­ern­ment has launched many employ­ment pro­grammes, such as Inte­grat­ed Rur­al Devel­op­ment Pro­gramme (IRDP), Jawa­har Gram Sam­rid­dhi Yoj­na (JGSY)

* Pro­gramme have been launched with a view to encour­age self-employ­ment, such as Swar­na Jayan­ti Gram Swaroz­gar Yoj­na (SGSY).

* Gov­ern­ment has also launched social secu­ri­ty pro­grammes for the aged and preg­nant women espe­cial­ly in rur­al areas.

 * For urban areas, Prime Min­is­ter Roz­gar Yoj­na (PMRY) and the Prime Min­is­ter’s Inte­grat­ed Urban Pover­ty Alle­vi­a­tion Pro­gramme (PMIUPAP) have been launched for employment.

* Fair Price Shops sup­ply food to low­er income groups at sub­si­dized rates. Thus, we see that after inde­pen­dence the gov­ern­ment of India has done a lot towards eco­nom­ic devel­op­ment and has suc­cess­ful­ly tack­led var­i­ous prob­lems that came in its way. How­ev­er, a lot of things have yet to be done.

Social Sec­tor

Pro­vid­ing civ­il ameni­ties to the peo­ple is an impor­tant func­tion of our gov­ern­ment. Let’s dis­cuss about the role of gov­ern­ment in pro­vid­ing pub­lic facilities.

Pub­lic Facilities

• Water comes first in the list of civic ameni­ties. The idea of equi­ty, or the equal avail­abil­i­ty, afford­abil­i­ty and qual­i­ty of water for all, is one of the key issues relat­ed to pub­lic facil­i­ties. We will dis­cuss this issue in the con­text of Fun­da­men­tal Rights and the gov­ern­men­t’s respon­si­bil­i­ty in it.

• Bin­er Water is essen­tial for life, the Con­sti­tu­tion has indi­rect­ly rec­og­nized the right to water, because with­out water one can­not live. Thus, it means that every per­son has the right to get suf­fi­cient amount of water at afford­able prices. The courts, ie., the High Courts and the Supreme Court have also rec­og­nized this, because in sev­er­al cas­es they have held that the right to safe drink­ing water is a Fun­da­men­tal Right.

• In case of low or excess rain, the poor peo­ple suf­fer the most. They do not get pure drink­ing water in both the cas­es. On the oth­er hand, rich and mid­dle class peo­ple man­age to get drink­ing water by dig­ging wells or buy­ing min­er­al water from the mar­ket. In this case, the poor peo­ple have to drink con­t­a­m­i­nat­ed water.

• Dis­trict author­i­ties already know tex­tile com­pa­nies or leather tan­ner­ies dis­charge poi­so­nous chem­i­cals into streams or rivers near vil­lages, but noth­ing is done by the gov­ern­ment to get rid of this prob­lem. Thus, it seems that it is only peo­ple with mon­ey who have the right to water.

• Many water-borne dis­eases can be checked by pro­vid­ing safe drink­ing water. India has the largest num­ber of cas­es of dis­eases such as diar­rhoea, dysen­tery and cholera. A large num­ber of Indi­ans, most of them young chil­dren, below the age of five, report­ed­ly die every­day because of water-relat­ed dis­eases. Hence, it becomes the pri­ma­ry duty of the gov­ern­ment to make drink­ing water avail­able to all the citizens.

• San­i­ta­tion is anoth­er civic ameni­ty that should be pro­vid­ed to the cit­i­zen. San­i­ta­tion cov­er­age in India is even low­er than that of water. Toi­let facil­i­ty with­in the res­i­dence is not avail­able to about 74 per cent of Indi­an pop­u­la­tion. The san­i­tary con­di­tion in the slums is very poor, which gives rise to many con­t­a­m­i­nat­ed dis­eases. Rur­al areas also lack good san­i­tary condition.

• Apart from water and san­i­tary facil­i­ties, there are things like elec­tric­i­ty, pub­lic trans port, schools and col­leges which are also necessary.

• The respon­si­bil­i­ty of pro­vid­ing these to the peo­ple is to be under­tak­en by some­one. The respon­si­bil­i­ty can be tak­en by any­one, but since these are unprof­itable enter­pris­es, no pri­vate com­pa­ny comes for­ward to pro­vide them) Pri­vate com­pa­nies involve them­selves only in prof­itable exer­cis­es. They can pro­vide facil­i­ties but at a price that only a few peo­ple can afford. For this rea­son, and because pub­lic facil­i­ties relate to peo­ple’s basic needs, the respon­si­bil­i­ty to pro­vide them must be that of the gov­ern­ment. In most of the cas­es, when the gov­ern­ment tries to give con­tracts to pri­vate com­pa­nies to sup­ply water or dis­trib­ute elec­tric­i­ty, the prices go up. More­over, since the ben­e­fits of pub­lic facil­i­ties are shared by a large sec­tion of peo­ple, it becomes the pri­ma­ry duty