Towards the end of 1938 a National Planning Committee was constituted at the instance of the Congress. It consisted of fifteen members plus representatives of provincial governments and such Indian states as chose to collaborate with us. Among the members were well-known industrialists, financiers, economists, professors, scientists, as well as representatives of the Trade Union Congress and the Village Industries Association. The non-Congress Provincial Governments (Bengal, Punjab’ and Sind), as well as some of the major states (Hyderabad, Mysore, Baroda, Travancore, Bhopal) co-operated with this committee. In a sense it was a remarkably representative committee cutting across political boundaries as well as the high barrier between official and non-official India—except for the fact that the Government of India was not represented and took up a non-co-operative attitude. Hard-headed big business was there as well as people who are called idealists and doctrinaires, and socialists and near-communists. Experts and directors of industries came from provincial governments and states.
It was a strange assortment of different types and it was not clear how such an odd mixture would work. I accepted the chairmanship of the committee not without hesitation and misgiving; the work was after my own heart and I could not keep out of it.
Difficulties faced us at every turn. There were not enough data for real planning and few statistics were available. The Government of India was not helpful. Even the provincial governments, though friendly and co-operative, did not seem to be particularly keen on all-India planning and took only a distant interest in our work. They were far too busy with their own problems and troubles. Important elements in the Congress, under whose auspices the committee had come into existence, rather looked upon it as an unwanted child, not knowing how it would grow up and rather suspicious of its future activities. Big business was definitely apprehensive and critical, and probably joined up because it felt that it could look after its interests better from inside the committee than from outside.
It was obvious also that any comprehensive planning could only take place under a free national government, strong enough and popular enough to be in a position to introduce fundamental changes in the social and economic structure. Thus the attainment of national freedom and the elimination of foreign control became an essential prerequisite for planning. There were many other obstacles—our social backwardness, customs, traditional outlook, etc.—but they had in any event to be faced. Planning thus was not so much for the present, as for an un-ascertained future, and there was an air of unreality about it. Yet it had to be based on Towards the end of 1938 a National Planning Committee was constituted at the instance of the Congress. It consisted of fifteen members plus representatives of provincial governments and such Indian states as chose to collaborate with us. Among the members were well-known industrialists, financiers, economists, professors, scientists, as well as representatives of the Trade Union Congress and the Village Industries Association. The non-Congress Provincial Governments (Bengal, Punjab’ and Sind), as well as some of the major states (Hyderabad, Mysore, Baroda, Travancore, Bhopal) co-operated with this committee. In a sense it was a remarkably representative committee cutting across political boundaries as well as the high barrier between official and non-official India—except for the fact that the Government of India was not represented and took up a non-co-operative attitude. Hard-headed big business was there as well as people who are called idealists and doctrinaires, and socialists and near-communists. Experts and directors of industries came from provincial governments and states. It was a strange assortment of different types and it was not clear how such an odd mixture would work. I accepted the chairmanship of the committee not without hesitation and misgiving; the work was after my own heart and I could not keep out of it. Difficulties faced us at every turn. There were not enough data for real planning and few statistics were available. The Government of India was not helpful. Even the provincial governments, though friendly and co-operative, did not seem to be particularly keen on all-India planning and took only a distant interest in our work. They were far too busy with their own problems and troubles. Important elements in the Congress, under whose auspices the committee had come into existence, rather looked upon it as an unwanted child, not knowing how it would grow up and rather suspicious of its future activities. Big business was definitely apprehensive and critical, and probably joined up because it felt that it could look after its interests better from inside the committee than from outside. It was obvious also that any comprehensive planning could only take place under a free national government, strong enough and popular enough to be in a position to introduce fundamental changes in the social and economic structure. Thus the attainment of national freedom and the elimination of foreign control became an essential prerequisite for planning. There were many other obstacles—our social backwardness, customs, traditional outlook, etc.—but they had in any event to be faced. Planning thus was not so much for the present, as for an un-ascertained future, and there was an air of unreality about it. Yet it had to be based on the present and we hoped that this future was not a distant one. If we could collect the available material, co-ordinate it, and draw up blue-prints, we would prepare the ground for the real effective future planning, meanwhile indicating to provincial governments and states the lines on which they should proceed and develop their resources. The attempt to plan and to see the various national activities—economic, social, cultural—fitting into each other, had also a highly educative value for ourselves and the general public. It made the people come out of their narrow grooves of thought and action, to think of problems in relation to one another, and develop to some extent at least a wider co-operative outlook.
The original idea behind the Planning Committee had been to further industrialization—’the problems of poverty and unemployment, of national defence and of economic regeneration in general cannot be solved without industrialization. As a step towards such industrialization, a comprehensive scheme of national planning should be formulated. This scheme should provide for the development of heavy key industries, medium scale industries, and cottage industries….’ But no planning could possibly ignore agriculture, which was the main stay of the people; equally important were the social services. So one thing led to another and it was impossible to isolate anything or to progress in one direction without corresponding progress in another. The more we thought of this planning business, the vaster it grew in its sweep and range till it seemed to embrace almost every activity. That did not mean we intended regulating and regimenting everything, but we had to keep almost everything in view even in deciding about one particular sector of the plan. The fascination of this work grew upon me and, I think, upon the other members of our committee also. But at the same time certain vagueness and indefiniteness crept in; instead of concentrating on some major aspects of the plan we tended to become diffuse. This also led to delay in the work of many of our sub-committees which lacked the sense of urgency and of working for a definite objective within a stated time.
Constituted as we were, it was not easy for all of us to agree to any basic social policy or principles underlying social organization. Any attempt to discuss these principles in the abstract was bound to lead to fundamental differences of approach at the outset and possibly to a splitting up of the committee. Not to have such a guiding policy was a serious drawback, yet there was no help for it. We decided to consider the general problem of planning as well as each individual problem concretely and not in the abstract, and allow principles to develop out of such considerations. Broadly speaking, there were two approaches: the socialist one aiming at the elimination of the profit motive and emphasizing the importance of equitable distribution, and the big business one striving to retain free enterprise and the profit motive as far as possible, and laying greater stress on production. There was also a difference in outlook between those who favoured a rapid growth of heavy industry and others who wanted greater attention to be paid to the development of village and cottage industries, thus absorbing the vast number of the unemployed and partially employed. Ultimately there were bound to be differences in the final conclusions. It did not very much matter even if there were two or more reports, provided that all the available facts were collected and co-ordinated, the common ground mapped out, and the divergencies indicated. When the time came for giving effect to the Plan, the then existing democratic government would have to choose what basic policy to adopt. Meanwhile a great deal of essential preparation would have been made and the various aspects of the problem placed before the public and the various provincial and state governments.
Obviously we could not consider any problem, much less plan, without some definite aim and social objective. That aim was declared to be to ensure an adequate standard of living for the masses, in other words, to get rid of the appalling poverty of the people. The irreducible minimum, in terms of money, had been estimated by economists at figures varying from Rs. 15 to Rs. 25 per capita per month. (These are all pre-war figures.) Compared to western standards this was very low, and yet it meant an enormous increase in existing standards in India. An approximate estimate of the average annual income per capita was Rs. 65. This included the rich and the poor, the town-dweller, and the villager. In view of the great gulf between the rich and the poor and the concentration of wealth in the hands of a few, the average income of the villager was estimated to be far less, probably about Rs. 30 per capita per annum. These figures bring home the terrible poverty of the people and the destitute condition of the masses. There was lack of food, of clothing, of housing and of every other essential requirement of human existence. To remove this lack and ensure an irreducible minimum standard for everybody the national income had to be greatly increased, and in addition to this increased production there had to be a more equitable distribution of wealth. We calculated that a really progressive standard of living would necessitate the increase of the national wealth by 500 or 600 per cent. That was, however, too big a jump for us, and we aimed at a 200 to 300 per cent increase within ten years.
We fixed a ten-year period for the plan, with control figures for different periods and different sectors of economic life.
Certain objective tests were also suggested:
- The improvement of nutrition—a balanced diet having a calorific value of 2,400 to 2,800 units for an adult worker.
- Improvement in clothing from the then consumption of about fifteen yards to at least thirty yards per capita per annum.
- Housing standards to reach at least 100 square feet per capita.
Further, certain indices of progress had to be kept in mind:
- (i) Increase in agricultural production,
- (ii) Increase in industrial production,
- (iii) Diminution of unemployment,
- (iv) Increase in per capita income,
- (v) Liquidation of illiteracy,
- (vi) Increase in public utility services,
- (vii) Provision of medical aid on the basis of one unit for 1,000 population,
- (viii) Increase in the average expectation of life.
The objective for the country as a whole was the attainment, as far as possible, of national self-sufficiency. International trade was certainly not excluded, but we were anxious to avoid being drawn into the whirlpool of economic imperialism. We neither wanted to be victims of an imperialist power nor to develop such tendencies ourselves. The first charge on the country’s produce should be to meet the domestic needs of food, raw materials, and manufactured goods. Surplus production would not be dumped abroad but used in exchange for such commodities as we might require. To base our national economy on export markets might lead to conflicts with other nations and to sudden upsets when those markets were closed to us.
So, though we did not start with a well-defined social theory, our social objectives were clear enough and afforded a common basis for planning. The very essence of this planning was a large measure of regulation and co-ordination. Thus, while free enterprise was not ruled out as such, its scope was severely restricted. In regard to defence industries it was decided that they must be owned and controlled by the state. Regarding other key industries, the majority were of opinion that they should be state-owned, but a substantial minority of the committee considered that state control would be sufficient. Such control, however, of these industries had to be rigid. Public utilities, it was also decided, should be owned by some organ of the state—either the Central Government, provincial government, or a local board. It was suggested that something of the nature of the London Transport Board might control public utilities. In regard to other important and vital industries, no special rule was laid down but it was made clear that the very nature of planning required control in some measure, which might vary with the industry.
In regard to the agency in state-owned industries it was suggested that as a general rule an autonomous public trust would be suitable. Such a trust would ensure public ownership and control and at the same time avoid the difficulties and inefficiency which sometimes creep in under direct democratic control. Co-operative ownership and control were also suggested for industries. Any planning would involve a close scrutiny of the development of industry in all its branches and a periodical survey of the progress made. It would mean also the training of the technical staffs necessary for the further expansion of industry, and the state might call upon industries to train such staffs.
The general principles governing land policy were laid down: ‘Agricultural land, mines, quarries, rivers, and forests are forms of national wealth, ownership of which must vest absolutely in the people of India collectively.’ The co-operative principle should be applied to the exploitation of land by developing collective and co-operative farms. It was not proposed, however, to rule out peasant farming in small holdings, to begin with at any rate, but no intermediaries of the type of talukdars, zamindars, etc., should be recognized after the transition period was over. The rights and title possessed by these classes should be progressively bought out. Collective farms were to be started immediately by the state on cultivable waste land. Co-operative farming could be combined either with individual or joint ownership. A certain latitude was allowed for various types to develop so that, with greater experience, particular types might be encouraged more than others.
We, or some of us at any rate, hoped to evolve a socialized system of credit. If banks, insurance, etc., were not to be nationalized they should at least be under the control of the state, thus leading to a state regulation of capital and credit. It was also desirable to control the export and import trade. By these various means a considerable measure of state control would be established in regard to land as well as in industry as a whole, though varying in particular instances, and allowing private initiative to continue in a restricted sphere.
Thus, through the consideration of special problems, we gradually developed our social objectives and policy. There were gaps in them and occasional vagueness and even some contradiction; it was far from a perfect scheme in theory. But I was agreeably surprised at the large measure of unanimity achieved by us in spite of the incongruous elements in our Committee. The big business element was the largest single group and its outlook on many matters, especially financial and commercial, was definitely conservative. Yet the urge for rapid progress, and the conviction that only thus could we solve our problems of poverty and unemployment, were so great that all of us were forced out of our grooves and compelled to think on new lines. We had avoided a theoretical approach, and as each practical problem was viewed in its larger context, it led us inevitably in a particular direction. To me the spirit of co-operation of the members of the Planning Committee was peculiarly soothing and gratifying, for I found it a pleasant contrast to the squabbles and conflicts of politics. We knew our differences and yet we tried and often succeeded, after discussing every point of view, in arriving at an integrated conclusion which was accepted by all of us, or most of us.
Constituted as we were, not only in our Committee but in the larger field of India, we could not then plan for socialism as such. Yet it became clear to me that our plan, as it developed, was inevitably leading us towards establishing some of the fundamentals of the socialist structure. It was limiting the acquisitive factor in society, removing many of the barriers to growth, and thus leading to a rapidly expanding social structure. It was based on planning for the benefit cf the common man, raising his standards greatly, giving him opportunities of growth, and releasing an enormous amount of latent talent and capacity. And all this was to be attempted in the context of democratic freedom and with a large measure of co-operation of some at least of the groups who were normally opposed to socialistic doctrine. That co-operation seemed to me worth while even if it involved toning down or weakening the plan in some respects. Probably I was too optimistic. But so long as a big step in the right direction was taken, I felt that the very dynamics involved in the process of change would facilitate further adaptation and progress. If conflict was inevitable, it had to be faced; but if it could be avoided or minimized that was an obvious gain. Especially as in the political sphere there was conflict enough for us and, in the future, there might well be unstable conditions. A general consent for a plan was thus of great value. It was easy enough to draw up blueprints based on some idealist conception. It was much more difficult to get behind them that measure of general consent and approval which was essential for the satisfactory working of any plan.
Planning, though inevitably bringing about a great deal of control and co-ordination and interfering in some measure with individual freedom, would, as a matter of fact, in the context of India today, lead to a vast increase of freedom. We have very little freedom to lose. We have only to gain freedom. If we adhered to the democratic state structure and encouraged co-operative enterprises, many of the dangers of regimentation and concentration of power might be avoided.
At our first sessions we had framed a formidable questionnaire which was issued to various governments and public bodies, universities, chambers of commerce, trade unions, research institutes, etc. Twenty-nine sub-committees were also appointed to investigate and report on specific problems. Eight of these sub-committees were for agricultural problems; several were for industry; five for commerce and finance; two for transport; two for education; two for public welfare; two for demographic relations; and one for women’s role in planned economy. There were in all about 350 members of these sub-committees, some of them overlapping. Most of them were specialists or experts in their subjects—businessmen, government, state, and municipal employees, university professors or lecturers, technicians, scientists, trade unionists, and police^ men. We collected in this way much of the talent available in the country. The only persons who were not permitted to co-operate with us, even when they were personally desirous of doing so, were the officials and employees of the Government of India. To have so many persons associated in our work was helpful in many ways. We had the advantage of their special knowledge and experience, and they were led to think of their special subject in relation to the wider problem. It also led to a greater interest in planning all over the country. But these numbers were disadvantageous also, for there was inevitable delay when busy people spread out all over a vast country had to meet repeatedly.
I was heartened to come into touch with so much ability and earnestness in all departments of national activity, and these contacts added to my own education greatly. Our method of work was to have an interim report from each sub-committee, which the planning committee considered, approving of it or partly criticizing it, and then sending it back with its remarks to the sub-committee. A final report was then submitted out of which arose our decisions on that particular subject. An attempt was being made continually to co-ordinate the decisions on each subject with those arrived at on other subjects. When all the final reports had been thus considered and disposed of, the Planning Committee was to review the whole problem in its vastness and intricacy and evolve its own comprehensive report, to which the sub-committee’s reports would be added as appendices. As a matter of fact that final report was gradually taking shape in the course of our consideration of the sub-committees’ reports.
There were irritating delays, chiefly due to some of the sub-committees not keeping to the time-table fixed for them, but on the whole we made good progress and got through an enormous amount of work. Two interesting decisions were made in connection with education. We suggested that definite norms of physical fitness for boys and girls be laid down for every stage of education. We also suggested establishment of a system of compulsory social or labour service, so as to make every young man and woman contribute one year of his or her life, between the ages of eighteen and twenty-two, to national utility, including agriculture, industry, public utilities, and public works of all kinds. No exemption was to be allowed except for physical or mental disability.
When World War II started in September, 1939, it was suggested that the National Planning Committee should suspend its activities. In November the Congress governments in the provinces resigned and this added to our difficulties, for under the absolute rule of the Governors in the provinces no interest was taken in our work. Business men were busier than ever making money out of war requirements and were not so much interested in planning.
The situation was changing from day-to-day. We decided, however, to continue and felt that the war made this even more necessary. It was bound to result in further industrialization, and the work we had already done and were engaged in doing could be of great help in this process. We were dealing then with our sub-committees’ reports on engineering industries, transport, chemical industries, and manufacturing industries, all of the highest importance from the point of view of the war. But the Government was not interested in our work and in fact viewed it with great disfavour. During the early months of the war—the so-called ‘phoney’ period—their policy was not to encourage the growth of Indian industry. Afterwards, the pressure of events forced them to buy many of their requirements in India, but even so they disapproved of any heavy industries being started there. Disapproval meant virtual prohibition, for no machinery could be imported without government sanction.
The Planning Committee continued its work and had nearly finished dealing with its sub-committees’ reports. We were to finish what little remained of this work and then proceed to the consideration of our own comprehensive report. I was, however, arrested in October, 1940, and sentenced to a long-term of imprisonment. Several other members of the Planning Committee and its subcommittees were also arrested and sentenced. I was anxious that the Planning Committee should continue to function and requested my colleagues outside to do so. But they were not willing to work in the Committee in my absence. I tried to get the Planning Committee’s papers and reports in prison so that I might study them and prepare a draft report. The Government of India intervened and stopped this. No such papers were allowed to reach me, nor were interviews on the subject permitted.
So the National Planning Committee languished, while I spent my days in jail. All the work we had done which, though incomplete, could be used to great advantage for war purposes, remained in the pigeon-holes of our office. I was released in December, 1941, and was out of prison for some months. But this period was a hectic one for me, as it was for others. All manner of new developments had taken place, the Pacific war was on, India was threatened with invasion, and it was not possible then to pick up the old threads and continue the unfinished work of the planning committee unless the political situation cleared up. And then I returned to prison.