Marxism is dead. Planning Commission of India is abolished. But India is and will remain a socialist country.
Prime Minister Narendra Modi’s decision to replace the 64-year-old Planning Commission (PC) by a new body was widely welcomed. Happiest were those who associate PC with socialism, more specifically with Nehruvian socialism. They consider Jawaharlal Nehru, who was highly influenced by the Soviet model, to be father of the PC. The critics argued that during the last two decades, the world economy has changed significantly; with increasing role of the private sector, socialism has become an outdated ideology and with that the PC had become an anachronism. Another criticism was that the plan model developed in 1950 was no longer valid; it was working like a “control commission” and had become an impediment to reform, growth and progress.
Even after the abolition of the Planning Commission certain myths must be dispelled. Briefly, Nehru was not father of planning or PC; PC did not impose any ideology on Indian rulers; and India is and will remain a socialist country, PC or no PC. Moreover, we need a body like PC.
True, Nehru did set up the PC but he was not the first to suggest setting up of such a body and preparation of five-year plans (FYPs) for economic development. It was M Visvesvaraya, an engineer and a visionary who had studied western industrialized countries, who first suggested a ten-year plan and gave outline of a planning body. In his book “A Planned Economy for India” (1934), he wrote “Left to private enterprise, industries will not make satisfactory progress. Government should take the lead, as every progressive government is doing now.” The idea was lapped by Subash Chandra Bose who as Congress President in 1938 (Nehru was in England at that time) said: “The state on the advice of a PC will adopt a comprehensive scheme for gradually socialising our entire agricultural and industrial system…” He made Nehru chairman of All India National PC though it remained a non-starter due to outbreak of World War. In 1945, eminent capitalists like JRD Tata and GD Birla, prepared “A Brief Memorandum Outlining a Plan of Economic Development for India” for economic development of post-Independence India.
Secondly, whatever faults one can attribute to PC, it cannot be accused of ever adopting a dogmatic attitude. PC being a creation of government and working under the chairmanship of the Prime Minister, accepted socialism or need for moving away from it as per the government’s directions. Moreover, government’s resolve to provide lead role in economic development came before PC was set up. Following the first Industrial Policy Statement (1948) which accepted the principle of government ownership and control in critical sectors of the economy while accepting cooperation of the private sector in other areas, the first FYP document assigned greater role to the state and secondary role to the private sector because the latter was quite weak at that time.
According to the Industrial Policy Resolution, adopted by the Parliament on April 30, 1956, “The adoption of the socialist pattern of society as the national objective, as well as the need for planned and rapid development, requires that all industries of basic and strategic importance, or in the nature of public utility services, should be in the public sector.” The second FYP was prepared to lay the foundation of socialistic pattern of society. Third plan document stated that “disciplined and national unity are the very basis of social and economic progress for the achievement of socialism.” In Preface to Fourth Plan document Prime Minister Indira Gandhi wrote that “with its implementation, we shall have advanced yet another stage towards our goal of a prosperous, democratic, modern, socialist society.
The plan document explained that “Socialism involves a reordering of society on a rational and equitable basis and this can only be achieved by assigning an expanding role to the public sector. However, the Fifth Plan document (1974-79) did not mention the word “socialism”. In Her Foreword to the Sixth plan document Indira Gandhi said that “for democracy to have meaning in our circumstances, it must be supported by socialism which promises economic justice and secularism which gives social equality.” That democracy in our circumstances ‘must be supported by socialism which promises economic justice and social equality”. In his Foreword to the Seventh plan document Prime Minister Rajeev Gandhi stated that the plan reaffirmed ‘our commitment to” socialism. Eighth plan (1992-97) document sang a different song: “The centralised planning of the type practised in socialist economies did not exist in India, ever. In practice, the market has determined allocations in a major segment of the economy.” The term has not found any mention in a plan document thereafter.
The journey was summarized on the web site of the Planning Commission: “For the first eight Plans the emphasis was on a growing public sector with massive investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less pronounced and the current thinking on planning in the country, in general, is that it should increasingly be of an indicative nature.” In fact, Eighth Plan was a watershed; the focus started shifting to deregulation of economy and increasing role of the private sector. Before that, the industrial policy announced in July 1991 suggested removal of bureaucratic controls that parted industrial development and opening up of large number of industries to the private sector.
Thirdly, the planning model did not remain static since 1950. First plan had no model. Economist YK Alagh who had long association with PC has mentioned four stages of evolution: (1) second to fourth FYP based on (very simple) Mahalanobis model with emphasis on heavy industry; (2) fifth FYP when income distribution and sectoral planning strategies were included and project appraisal became necessary before major investment decisions; (3) sixth and seventh FYP with greater emphasis on sectoral planning, though emphasis remained on public investment; (4) since eighth Plan, with greater emphasis on increasing private investment.
Fourthly, with Prime Minister as its chairman and all its employees being government servants, PC could not behave the way Sonia Gandhi headed National Advisory Council did, to impose its views on the government. At best, its role was advisory. Whenever the government of the day found any member or deputy chairman inconvenient, he was given marching orders. Indira Gandhi did so in 1971 when deputy chairman and member in-charge of industry opposed Sanjay Gandhi’s car project. There are also examples of members and senior officers going out of way to please political masters and of meekly listening when Prime Minister made fun of them. If the quality of work in PC deteriorated or its officers created hurdles, fault lies with the appointing authority. The deterioration in PC is in line with all-round deterioration in the government, especially during the last ten years.
Fifthly, whether critics like or not, India is and will remain a socialist country, PC or no PC. Socialism has come to stay exactly as democracy has come to stay. We were not “socialist” when we got independence and became a democratic country, not even when we became a Republic. We came somewhere near it in December 1954 and became full-fledged socialist country during the last days of the Emergency imposed by Indira Gandhi when the 42nd Amendment Act (1976) added words “socialist” and “secular” to the Preamble to the Indian Constitution. It now reads: “We the people of India having solemnly resolved to constitute India into a sovereign democratic socialist secular republic…” According to the “Statement of object and Reasons” of the Amendment Act, insertion of these terms had become necessary because the democratic institutions “had been subjected to considerable stresses and strains … Vested interests have been trying to promote their selfish ends to the great detriment of public good.” Many believe that Indira Gandhi added the terms “socialist” to express her strong relationship with the Soviet Union.
Most of the countries that claimed to be socialist – of Marxist variety or of non-Marxist variety – have abandoned socialism but India remains a socialist country, thanks to the above Amendment. In fact, now, there are just eight non-Marxist socialist countries, India included, whose constitution refers to socialism. In addition, there are only four countries including China which are characterised as communist or Marxist socialist.
Every citizen of India is bound to respect the Constitution and abide by its provisions in letter and spirit. In addition, every person contesting elections or assuming an important office in government, judiciary, Armed Forces, etc., has to take oath of allegiance to the Constitution. Preamble is not a window-dressing or are mere cosmetic value. In Kesavananda Bharati case (1973), the Supreme Court held that Preamble was an integral part of Constitution but it was before the 42nd Amendment. In 1995, in the LIC of India case, the Court reiterated the 1973 verdict.
In 2007, a PIL was filed in the Supreme Court seeking removal of the word ‘socialist’ from the Preamble on the ground that it amounted to breach of the basic structure of the Constitution. The same PIL also requested the court to strike down a provision of the Representation of People Act according to which political parties must swear by socialism in order to be recognized. The argument was that a political party which did not subscribe to socialism had to pretend to adhere to it for the sake of recognition. Dismissing the PIL on January 8, 2008, Chief Justice K G Balakrishnan, who presided over the three-judge bench, observed: “Why do you take socialism in a narrow sense defined by communists? It hasn’t got any definite meaning. It gets different meanings in different times. In broader sense, it means welfare measures for the citizens. It is a facet of democracy.”
So, even diehard critics of socialism, who are living in India, are living in a socialist state, whether they like it or not. But socialism is longer the same as described by Marxist and non-Marxist ideologues. Now it means equality and justice to be achieved through democratic means, without the state controlling most of the economic activities. Even China, ruled by communist party, has adopted mixed economy for higher economic growth. Ultimately, the choice of economic policy should be determined by economic interests, not vice versa.
Lastly, the government would always need an organization to draw a road map for country’s progress. Developed countries like Japan and Germany and developing countries like Mexico, Malaysia and South Africa have got such institutions. In the US, there is a Council of Economic Advisers to advise the President on economic policies. The organization carries out objective empirical research and prepares annual Economic Report for the President. Hope, the new body, Niti Aayog (Policy Commission) would play that role.
By Devendra Narain at indiaopines blog
The author blogs here