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FORTY YEARS OF
INDEPENDENCE
PUBLICATIONS DIVISION
MINISTRY OF INFORMATION AND BROADCASTING
GOVERNMENT OF INDIA
July 1989 (Asadha 1911)
©Publications Division
The views expressed here do not necessarily reflect the views of the government
The late Shri L.K. Jha was Member of Parliament and Chairman of
Commission on Economic Efficiency, Productivity and Exports, New Delhi.
Dr. M.V. Rao is Special Director General (Oil seeds), Indian Council of
Agricultural Research, New Delhi.
Shrimati Tara Ali Baig, President, SOS Children’s Villages of India, New
Delhi, is associated with several national and international organisations
connected with Child Welfare.
L.K. Jha
Since 1947, when India became independent, the country has been
engaged in a major developmental effort. In the first half of the century under
British rule, the trend growth rate between 1900-01 and 1945-46 had been 1.2
per cent for national income, about 0.3 per cent for agriculture and 2 per cent
for industries. There was a countrywide consensus among economists,
politicians and industrialists that once India became independent, the nation
must embark on a strategy of planned development in which both the public
sector and the private sector would play a symbiotic role. A concrete shape
had been given to this concept by the formulation of what came to be known
as the Bombay Plan to which Pandit Jawaharlal Nehru, Shri J.R.D. Tata, Shri
G.D. Birla and other eminent personalities had appended their signatures.
Not surprisingly therefore, very shortly after Independence, the Planning
Commission was set up to chalk out the strategy for growth with due regard
to social justice on the one hand, so that the tremendous gap between the rich
and the poor was narrowed, as well as to self-reliance, because it was realised
that political independence cannot be complete without self-reliance in the
economic field.
Rapid Industrialisation
The main thrust of the development strategy, to begin with, was on rapid
industrialisation. Agriculture by itself could not provide a tolerable standard
of living for India’s teeming millions. The main industries which had been
developed before Independence were agro-based, sugar, jute and cotton
textiles. For the rapid industrialisation of the country the public sector
assumed responsibility for developing the infrastructure as well as industries
which were capital-intensive or of strategic importance, so that the public
sector could occupy the commanding heights of the economy. At the same
time, the private sector was to be helped in every way to make its own
contribution to this mighty endeavour.
The major constraint was of resources. In a country with such low per
capita incomes and the level of savings around 10% of GNP, the capital
available for investment seemed grossly inadequate for industrialisation on a
tolerable scale. The efforts were made to mobilise resources through higher
taxation and curbs on consumption to stimulate savings. The Industrial
Finance Corporation was set up to help the private sector with long term
credit to ensure that the resources so mobilised were invested jn accordance
with plan priorities. A system of industrial licensing was introduced which
not only canalised investment in accordance with plan priorities, but gave a
spurt to entrepreneurship by assuring investors that the capacity created for
different industries will be with due regard to demand. Fortunately, with the
heavy accumulation of sterling balances during World War II, foreign
exchange was not seen by many people as a major constraint. Even so, import
licensing during the war was continued which, alongwith high import duty
imposed on revenue considerations, gave to Indian industry a highly sheltered
market in which competition, both internal and external, was carefully
regulated.
In such an environment, fifities turned out to be a decade of rapid
industrialisation, the rate of industrial growth during the first two Five Year
Plans being seven per cent, with considerable diversification of capacity
ranging from machine building industries to light consumer goods industries.
At the end of the decade, India had begun to occupy the tenth place in terms
of industrial output among the nations of the world.
In the sixties, alas, there was a setback. Two border conflicts one with
China and one with Pakistan, compelled a diversion of domestic resources
from development to defence. India’s sterling balances had already been
depleted by the end of the Second Five Year Plan and the country was
compelled to seek external assistance from the World Bank and friendly
countries to help the developmental effort. Three successive droughts in the
mid-sixties compelled the country to seek external assistance even to finance
massive imports of wheat to feed the population.
In the consequent crunch of resources, five year planning was suspended
for three years. There was a sharp cutback of public investment which led to
recessionary conditions in the industrial sector. With restrictive policies in the
fiscal and monetary sphere, the tightening of industrial and import licensing
on foreign exchange considerations and various other measures introduced,
monopolistic trends and income disparities in the economy, the rate of
growth slumped. Conditions of stagflation prevailed.
With grim determination, Prime Minister Indira Gandhi gave her full
support to the efforts to make the country self-sufficient in foodgrains. The
larger banks were nationalised and told to increase their lending to the
agricultural sector as well as to the smaller industrial enterprises. Legislation
to curb monopolies and restrictive trade practices was taken in hand.
A Long Way to Go
To say all this is not to suggest that there is any room for complacency.
We have a long way to go before endemic poverty has been vanished and the
tear in every eye has been wiped out.
Yet it would be a mistake to ignore or under-rate such progress as has
been made in reducing income disparities between the rich and the poor. At
the upper end of the scale, the industrial scenario is no longer dominated by
two or three business families. There has been a steady dispersal of the
control and management of industries and their ownership is now spread
among millions of shareholders including people of modest means and those
belonging to the agricultural sector.
Further the number of people who enjoy decent income levels,
comparable to those in developed countries, is a little above 10% of the
population, which means between 75 to 100 million people. There is an
upsurge of demand for products like detergents, synthetic fibres, domestic
electrical and cooking appliances, which are no longer looked upon as
luxuries. The production of colour television sets has gone up from 50,000 in
1983 to about 8,00,000 in 1986; of personal computers from 3,000 in 1984 to
20,000 in 1986. The public sector Maruti car which has pushed up its
production from 45,000 in 1983 to 1,10,000 in 1986 cannot cope with the
demand, and often the cars are sold with an illegal premium.
It is when attention is turned to the ‘low income’ and ‘no income’ groups
that wide differences emerge in the appraisal which different people make of
the progress or the lack of it in the drive against poverty. Some of the
controversy is undoubtedly political. Another reason for the conflicting
assessments is the methodology employed and the manner in which the
poverty line is defined.
Without going into the reliability of the yardsticks for measuring levels of
poverty, it is possible to form some broad judgements.
Not long before his death, Pt. Jawaharlal Nehru had spoken of the signs of
lessening of poverty which he had witnessed by pointing out that in his first
election campaign, the people came to listen to him bare-footed; in the next
election almost all of them had shoes on and in the third general election, a
large number of people came to listen to him on bicycles. If we focus on
mode of transport, we find that in the cities today, the horse-drawn vehicles
and rickshaws have given place to scooters, auto-rickshaws and buses, while
during election campaigns, political parties have to provide trucks for the
transportation of those they want to address.
A more solid evidence of overall progress is provided by the fact that the
overall expectation of life at birth has doubled, if not gone up, from 27 years
in 1950-51 to 54 years now. The increase in longevity has come about, not
because the rich live longer but because the poor are better nourished and
have better health services. The evidence of improvement in the nutritional
standards of the people is corroborated by the fact that while, with low
standards of per capita consumption on account of poverty of the people we
used to be exporters of vegetable oils and sugar, now we have to import them
in substantial quantities to meet domestic demand. Again, it would be
unsound to argue that it is the rich who have the consumption of fats or
sweeteners—indeed most of them are, under medical advice, to restrict both.
It is the entry of an altogether new class of consumers which has raised the
demand for them.
But alas, it is only too true that far too many people are poor. Up to a
point, the very success of the anti-poverty programmes in increasing their
life-span has led to an increase in the rate of population growth which is the
prime cause of the persistence of low per capita incomes. Paradoxical though
it may sound, one of the consequences of such success as is achieved in
dealing with the problem of poverty is to make the size of the problem
bigger.
Clearly then the anti-poverty programme has to be intensified. This is not
just a matter of making a larger allocation of resources for the purpose, but of
ensuring that the funds do reach the beneficiaries for whom they were
intended. Further the anti-poverty programmes should not be viewed as
simple acts of charity but as instruments to generate employment with
reasonable living wages. As things are, organised industrial labour has been
able to look after its interests rather well, but the lot of landless agricultural
labour is far worse. Likewise, surplus unproductive labour in high wage
islands like Bombay, Ahmedabad, Calcutta and public sector plants get far
greater protection than those in smaller undertakings while the jobless have to
fend for themselves.
Competitive Coexistence
Within this broad regulatory and promotional framework, ours is a mixed
economy where there is a competitive coexistence of different social groups.
Our goals of an independent, modern and self-reliant economy and
achievement of socialism by eradicating poverty and reducing economic and
social inequalities have been pursued within a democratic political
framework characterised by adult franchise and multi-party system.
Within the broad social setting outlined above, the growth of public
investment and public sector enterprises which accounted for about half of
total investments during successive plan periods played a crucial role in
stepping up the growth of economy as well as opening up the opportunities
for wider sharing of benefits from socio-economic development. By
providing basic physical and institutional infrastructure, public sector has
provided a basis for self-reliant growth. It is highly complementary to the
private sector, including agriculture and small industry, so far as linkages in
growth and promotional role are concerned.
Public investments in human resources development in general including
education and health have contributed to releasing the initiative and
improving the productivity of the broad masses of people. At the same time,
the growth of public sector in crucial fields has contributed to arresting the
concentration of economic power in a few hands.
Whereas public investment and public policies in general do influence the
functioning of the markets in India, the direct regulation or day-to-day
interference with market mechanism is minimal. For instance, farmers in their
millions make their own investment and production decisions including how
much to market and consume within the framework of public infrastructure
provided e.g. irrigation, extension of new technology, credit etc. Even the
administered prices very often bear some rational relationship to market
situations.
Balanced Development
Besides, the planning process as it has evolved over decades, allows for
extensive and detailed interaction with different states in the country
reflecting significant regional diversity in endowments and stages of
development. The national plan finally approved through consensus by the
National Development Council representing, among others, all the state
governments reflects the hopes and aspirations of people living in diverse
situations. About half the national plan outlays are incurred in the states’
sector and central assistance for state plans accounts for nearly 30 per cent of
the outlays.
One of the major achievements of planning in India is the balanced
development between different sectors of the economy. Thanks to the
decision-making within the democratic political framework and the operation
of markets and incentives to the producers, there has been a steady
relationship between the growth of industry and agriculture. Except the
weather-induced fluctuations, agricultural development has not been
characterized by any policy-induced jerks, as it has consistently shown a
growth rate of around three per cent per annum over the whole plan period.
Although there has been some slow down of industrial growth rate after
the mid-sixties, no serious imbalances within different sectors in industry or
in relation to agriculture have been witnessed. The terms of trade between
agriculture and industry have also remained steady over the plan period. In
the recent period, however, there has been some welcome shift in terms of
softening of relative prices in the case of crops experiencing technological
change and rise in productivity.
The second major achievement of planning in India is in respect of self-
reliance. Self-sufficiency in food, industrial infrastructure and producer goods
in the key sectors and a sharp reduction in the proportion of foreign resources
to total resources for plan investments can be cited as significant examples.
Reduction in poverty and in inequalities in consumption constitutes another
major achievement. This has been made possible by steady agricultural
growth leading to self-sufficiency in foodgrains, and the launching of several
employment-oriented programmes and measures to remove exploitation of
the socially disadvantaged sections.
Our major shortfalls relate to the area of productivity, especially where
public investments are involved, whether the operation of public enterprises
or public programmes for social development and for removal of poverty.
The functioning of public institutions in general, from enterprises to credit
and marketing institutions and administration for rural development require
considerable improvement. The problem is partly technological including the
upgradation of skills, particularly at the grass-roots level. Modernisation of
plants, of irrigation systems and improving communication system in general
can contribute a great deal to raising productivity. But basically, the problem
concerns institutional and organisational arrangements involving
bureaucracy, the decision-makers at the plant and farm level and working
people in general.
Functional Autonomy
The necessary administrative arrangements and political will to use the
available resources for the completion of on-going projects speedily instead
of spreading resources thinly so inherent in our political system, can help to
raise productivity of investments made in the whole economic system.
Improvement in the working of public enterprises holds the key to
improvement in overall productivity, not only because of the large
investments made in these enterprises but also because of their high
complementarity with the functioning of the private enterprises and economy
in general. The major issues relate to autonomy in the functioning of public
enterprises within the broad framework of their social accountability.
There are serious moves now to ensure such desirable autonomy for
public enterprises in respect of decisions regarding investment, product-mix,
pricing and labour relations. Significant steps have been taken recently to
professionalize the management and to provide security of tenure to
managers within the framework of accountability.
M.V.Rao
Agricultural Scenario
Agriculture is basic to India. More than 72 per cent of its population now
depends on agriculture. Out of the net estimated national product of Rs.
1,95,707 crores in 1986, agriculture accounted for Rs. 60,721 crores. The
percentage share of agriculture to the net national product at current prices is
30.8%. Agricultural products like coffee, tea, spices, leather, horticultural
items, meat, etc., are important export items earning valuable foreign
exchange to the country. Out of the total geographical area of 32.87 crore
hectares of the country 14.27 crore hectares is the net cultivable area put
under different crops. About 3.8 crore hectares are sown more than once thus
bringing the total gross cropped area to 18.4 crore hectares. The cropping
intensity at present is 126.4%. The Nation gave high priority to bring as much
area as possible under irrigation as a result of which a net area of about 4.2
crore hectares has been brought under assured water supply. In spite of
bringing so much area under irrigation, still 70% of the cultivated area is
rainfed depending upon natural precipitation. This rainfed area contributes to
nearly 42% of the total food grain production of the country. This area is
important since 83% of oilseeds, 92% of coarse cereals (sorghum, millets,
maize and barley), 83% of the pulses, 70% of the cotton, 58% of the rice,
28% of the wheat, 20% of the sugarcane are raised on it. The role of timely,
good and well distributed rainfall is critical in Indian agriculture and any
disturbance in monsoon creates violent fluctuations in production.
The varied soil and climatic conditions of the country support a wide
range of crops, both field, horticultural and commercial and, also animals.
Rice, wheat, sorghum, pearlmillet, maize, cotton, sugarcane, jute and a wide
range of pulse and oilseed crops, spices, plantation crops are grown in the
country. In fact India occupies the first, second and third positions for
acreage in the world for a number of crops.
Ingredients of Development
India was fortunate to have enlightened leadership at political, scientific
and administrative levels which gave the needed support at different stages of
development of its agriculture. The first Prime Minister of India, Pt.
Jawaharlal Nehru expressed that “everything else can wait but not
agriculture” The second Prime Minister, Shri Lal Bahadur Shastri elevated
the status of the farmer by the slogan “Jai Jawan and Jai Kisan”. Mrs. Indira
Gandhi pronounced on 9 April 1966 “unless we increase agricultural
production and thus achieve self-sufficiency in the next few years, we will
have forfeited our right to call ourselves a free country, let alone a great
country.” She gave the needed impetus and boost to agriculture and initiated
a number of steps that ushered in the “Green Revolution”in the
country.During the stewardship of Shri Rajiv Gandhi, technology missions
like the one on oilseeds have been initiated and a number of policy decisions
were taken that brought stability in production.
What India achieved in agricultural front is a result of sustained well
planned efforts and strong foundations laid for research, development and
infrastructural creation ever since it became independent. With the loss of
fertile, irrigated land at the time of partition to the newly created Pakistan,
India initiated immediately in 1947-48, the“Grow More Food”campaign.
This was extended on compact area basis in 1950-51 to “Intensive cultivation
areas” An “Integrated Production Programme” was also taken up in 1950.
Simultaneously land reforms like the abolition of Zamindari system (1951),
development of major and minor irrigation systems, initiation of permanent
Planning Commission (1950) to plan development on 5 year plan basis,
delegation of responsibility of agricultural development to the States (1950),
initation of Community Development Programme (1952), starting of ETO
(Exploratory Tubewells Organisation) in 1954, undertaking of the Intensive
Agricultural District Programme (IADP) towards the end of the second five
year plan period, Intensive Agricultural Areas Programme (IAAP) in 1964,
strengthening of High Yielding Varieties Programme (HYVP) followed by
Multiple Cropping Programme (MCP), initiation of Irrigation Commission
(1969), ground water survey and investigation programme (1966-67), rural
electricity programmes, starting of seed agencies like the National Seed
Corporation (1963), development of fertilizer policies and factories,
development of agencies for agricultural machinery, plant protection
chemicals, rural credit and rural refinance, agricultural cooperative marketing
federations, setting up of Agricultural Prices Commission, intensive cattle
and dairy development projects; reorganisation of agricultural development,
research, education and extension systems, development of linkages with
several countries and international organisations etc., are some of the major
steps undertaken by Government of India to boost up agricultural production.
During the 40 years after Independence the agricultural departments at the
Centre and the States were reorganised and greatly strengthened. A number
of community development, extension, cooperation, educational, credit
support programmes were initiated to reach and help the farmers. Research
was greatly strengthened. Under the aegis of the Indian Council of
Agricultural Research (ICAR), 45 Research Institutes and Bureaux, 19
National Research Centres, 8 Project Directorates and 69 All India
Coordinated Projects came into existence. Besides these, every major state of
the country started one or more Agricultural Universities which now total 26.
India today can boast of developing one of the biggest agricultural research
systems in the world and which also has the second largest scientific
manpower. Although production is complex which is dependent on a number
of institutional, technological, sociological, climatological, input, credit,
marketing and other parameters, the scientific results have shown that it is
possible to double or triple the present production levels of most of our crops
if all the factors that go into production are harmoniously and synchronously
put together and exploited.
Green Revolution
By methodical planning, infrastructural and institutional development,
India during the last 40 years, made significant progress in various sectors of
agriculture as could be seen in Table 1.
Table 1
Progress in production and productivity of
different agricultural commodities between 1950-1987
* Lakh bales of 170 kg. each ** Lakh bales of 180 kg. each *** In hundred million nuts Source:
Directorate of Economics & Statistics, Ministry of Agriculture, GOI, 1987.
In the area of milk, wool, eggs and fish similar progress was achieved,
particularly in recent years. Thus between 1980-81 and 1986-87 milk
production went up from 31.6 to 44.0 million tonnes; egg production from 10
to 16 billion, wool production from 34.2 to 41.0 million kg. and fish
production from 2.4 to 2.8 million tonnes.
The index of progress could also be gauged by per capita availability of
different items of consumption (Table 2).
Table 2
Per Capita availability of foodgrains in India
(in grams per day)
Commodity 1951 1986
Rice 158.9 218.9
Wheat 65.7 147.1
Other Cereals 109.6 71.5
Cereals 334.2 437.5.
Pulses 60.7 40.6
Foodgrains 394.9 478.1
Population 36.1 crores 76.6 crores
Source: Directorate of Economics & Statistics, Ministry of Agriculture, GOI, 1987.
The Future
The National Commission on Agriculture (1976) projected the demands
on the agricultural front for 2000 A.D. (Table 3).
Table 3
Demand and Supply Balances — 2000 A.D.
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