How Planning has helped in building an robust base for Indian Economy?
Influenced by the Soviet Union India adopted 5 year plans to give a direction for the economy and realise the goals of modern India. These plans made a significant contribution towards empowering India.
Planning in India:
- India’s planned approach led to the setting up of public sector units (PSUs) in diverse areas of manufacturing; research institutions in cutting-edge technologies of the time such as space and atomic energy; and centers of higher learning, including the Indian Institutes of Technologies (IITs). This benefited India immensely in capacity building.
- British had left the Indian economy in a shattered condition. If not for the planning approach, India could not have achieved these.
- It was through the planning India was able to counter the traditional economic theory which advocated that a labor-surplus country like India should be limiting its industrial development ambitions to labour-intensive sectors, such as garments or leather.
- Through five year plans India was able to give impetus to heavy engineering and machine-making industry, scientific research institutes, and electric power
- The programmes launched under the ambit of five-year plans helped India in building indigenous capabilities in the capital and technology-intensive sectors. Despite the general poverty, India became a model for other developing and Third World nations.
- Indian planning provided a fertile launching pad for the evolution of development economics as an important sub-discipline.
- Five-year plans laid the foundation for India’s diversified economic base.
- The successes for India in the information technology and knowledge-intensive sectors owe much to the research and educational institutions that were built during the early decades.
The planning in India largely ignored removing the hurdles of agriculture and small-scale industries. As a result, the benefits from state-led development have so far reached only a minority of Indians. It was flawed planning not planning in itself which led to the handicap of Indian Economy.