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Politics of Planned Development
The view that India could have developed much better if private sector was allowed a free play right from the beginning is not correct. The role of state in the economy was necessary to protect domestic industries,hence, it imposed substantial tariffs on imports. Such protected environment helped both public and private sector. A bulk of industries like electricity, railways, steel, machineries and communication could be developed in the public sector.
The state intervention helped to attain technological capability within the country. The state intervention was also necessary to prevent resources and wealth from getting concentrated in few hands.
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“In the early years of Independence, two contradictory tendencies were already well advanced inside the Congress party. On the one hand, the national party executive endorsed socialist principles of state ownership, regulat ion and control over key sectors of the economy in order to improve productivity and at the same time curb economic concentration. On the other hand, the national Congress government pursued liberal economic policies and incentives to private investment that was justified in terms of the sole criterion of achieving maximum increase in production. ” — Francine Frankel
(a) What is the contradiction that the author is talking about ? What would be the political implications of a contradiction like this ?
(b) If the author is correct, why is it that the Congress was pursuing this policy ? Was it related to the nature of the opposition parties ?
(c) Was there also a contradiction between the central leadership of the Congress party and its State level leaders ?
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