Author(s): S. P. Aiyar Source: The Indian Journal of Political Science, Vol. 24, No. 4 (October-December 1963), pp. 337-346 Published by: Indian Political Science Association Stable URL: http://www.jstor.org/stable/42743551 . Accessed: 06/09/2014 03:00 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. . Indian Political Science Association is collaborating with JSTOR to digitize, preserve and extend access to The Indian Journal of Political Science. http://www.jstor.org This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions PLANNING IN INDIAN DEMOCRACY By S. P. Aiyar* The very mention of planning and freedom brings to mind the classic discussion by Fredrich von Hayek which stated in a sensational form the thesis that all planning must necessarily lead to an infringement of indivi- dual liberties and is in fact a 'Road to Serfdom.' It is now too late in the day to revive the controversy in the form in which it was presented by Hayek. There undoubtedly are, elements of truth in Hayek's warning so far as the collectivistic economic planning of the Soviet type is concerned. In the late forties, The Road to Serfdom was a much discussed book in India but with Independence the Hayek thesis was given a quiet burial not only in India but in the other countries of South Asia as well. It is interesting to recall that at the seminar on Freedom and Planning held at Rangoon in February 1955 under the auspices of the Congress for Cultural Freedom, none of the participants even mentioned the name of Hayek. At the time when India's Five Year Plan was launched, both the inevitability of planning and the reconcilability of planning and freedom were taken for granted. It was argued that the very circumstances of an underdeveloped country- its low saving capacity and meagre capital formation ; its untapped natural and human resources ; the range of the people's basic requirements ; lack of popular initiative and the absence of a spirited entrepreneurial class- compel energetic action on the part of government and call for systematic economic planning. Further, the gigantic task of collecting basic data of every kind and formulating a reasonable plan, carrying out research and surveys, reconciling State demands and national resources and adjusting competing regional demands call for a central planning agency. The case for planning was thus indisputable. It is curious, however, that at the time of the framing of the Constitution, the centralising tendencies of planned development were not foreseen, or even thought of. Item 20 in the Concurrent List mentioned 'socjal and economic planning.' In vain does one look into the debates of the Constituent Assembly for any coherent discussion of planning or of the competing principles of centralisation and decentralisation. Mr. Santhanam notes that planning did not figure very much in the debates, although it was not quite forgotten.1 * Lecturer in Civics & Politics, Bombay University. 1 K. Santhanam : UnionState Relations in India , Asia Publishing House, 1960, p. 44. 337 This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions 338 THE INDIAN JOURNAL OF POLITICAL SCIENCE The view that planning and freedom are not irreconcilable rested on the belief that while India could turn with profit to the Soviet Union and later to Yugoslavia, for some of the lessons in planning, there was no need to repeat their errors. India can- and could- evolve a pattern of demo- cratic planning and thus provide a model for other underdeveloped coun- tries in South and Southeast Asia. Elaborating the implications of the Socialistic Pattern of Society, the Second Five Year Plan observed: "It is not rooted in any doctrine or dogma. Each country has to develop according to its own genius and traditions. Economic and social policy has to be shaped from time to time in the light of historical circumstances. It is neither necessary nor desirable that the economy should become a monolithic type of organisa- tion offering little play for experimentation either as to forms or as to modes of functioning What is important is a clear sense of direction, a consistent regard for certain basic values and a readiness to adapt institutions and organisations and their rules of conduct in the light of experience.'* (pp. 23-24) Speaking to the first meeting of the Panel of Scientists set up by the Planning Commission, Mr. Nehru emphasised the importance of the democratic approach in the implementation of the Plan and of the need to secure the enthusiastic support of the peasants, workers, intellectuals and the vast masses of the people for its successful execution. "You can- not expect the peasant in the field or the workers to understand all the details of your Plan" he said. "Nevertheless, it is important that even the peasant in the field should appreciate what we are doing and welcome it and tell us in his own sphere whether he considers what we do is right."2 The reconciliation between planning and democracy was sought to be achieved by securing the maximum support from the people and by evoking mass participation. The latter was the main objective in the programme of Community Development which was launched on Gandhi Jayanti, 1952. By 1957, however, the Balvantrai Mehta Committee drew attention to the fact that the Community Development Programme had become purely administrative in character. It outlined a scheme of Democratic Decentralisation or Panchayati Raj which formed the basis of legislation in a large number of States. Studies on Panchayati Raj vary greatly in their evaluation of the extent of participation as a result of the new experiment. The Seventh Report of the Programme Evaluation Organisation observed : "Peoples' attitudes and reactions in most of the Community Development Blocks are not yet generally favourable to the success and growth of the Community Development Programme. 2 Shriman Narayan : Principles of Gandhian Planning , Kitab Mahal, 1960, p. 208. This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions PLANNING IN INDIAN DEMOCRACY 339 The majority of the villages do not regard it as their own pro- gramme and seem to rely mainly on the Government for effecting the development of rural areas. The basic philosophy and approach of the Community Development Programme are, there- fore, inadequately subscribed to by the people." In 1961, Mrs. Kusum Nair reported in her Blossoms in the Dust , that in her extensive visits to several villages she found the people inert and indifferent and "paralysed by limited aspirations". The lack of a sense of participation on the part of the people has been one of the pronounced strands in the criticism of Indian planning. The Liberal Counter-attack Although the five year plans rested on the assumption of some sort of "mixed Economy", the objective of the 'socialistic pattern of society' has come in for considerable criticism. The Planning Commission has claimed that the plans have enlarged the scope for individual initiative as well as for cooperative and corporative effort. The Industrial Policy Resolution of April 1956 indicated the scope of the public and the private sector. The Third Five Year Plan observed that while the private sector has a large area in which it could develop and expand it had to function within the famework of the national plan and in harmony with the national goals. Businessmen in India however were alarmed at the scope of the public sector and saw in the 'socialistic pattern of society' the dismal signs of a future in which they would have no place. With the establishment of the Forum of Free Enterprise in 1956, the business section has become articulate. The establishment of the Swatantra Party has provided a powerful platform for the criticism of the Government's economic policies. Criticism of the planning process and the problem of planning and free- dom are recurring themes in the literature put out by the Forum and the Swatantra Party. In much of this literature the economic liberalism of the west finds expression. One often notices a return to the arguments of Hayek. In fact, the Forum in one of its pamphlets reprinted two of Hayek's essays on Free "Enterprise. Criticism has been levelled against the crippling effects of government controls, high taxation, government's monopoly over the infra- structure of the economy, particularly, transporta- tion, the licensing system and against the expansion of the bureaucracy. All this, it is suggested, is leading to a confirmation of the worst fears of Hayek. Hayek's later thesis, elaborated in his Constitution of Liberty, that the institution of private property is necessary for the maintenance of a free society is echoed in some of the speeches delivered under the auspices of the Forum of Free Enterprise. Thus in his speech on Planning for Prosperity , Mr. M. R. Masani, General Secretary of the Swatantra Party, dealt with the incompatibility of a controlled economy and the maintenance This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions 340 THE INDIAN JOURNAL OF POLITICAL SCIENCE of a free society. Analysing the Soviet experiment, Mr. Masani warned against the implications of the Soviet-type planning, which, he alleged, India had adopted. The Planning Commission, he asserted, had become a non-responsible super-government. In any system of planning for pros- perity there would be no place for a Planning Commission : "A National Planning Commission making policy can obtain only in the Soviet-type of planning and not in a democratic type of planning. It has no place in a free society, because what it logically attemps to do is to establish a command economy."3 In a later talk arranged by the Forum, in 1961, Mr. Masani argued more explicitly, that the system of free enterprise was essential for democracy. He put forward the interesting and very valuable thesis that in a country like India, a free and effective opposition is only possible by encouraging "autonomous social forces". These forces are re- presented by the businessmen, the factory owners, the shopkeepers, the peasants who own the land, self-employed people like lawyers, doctors, auditors, architects and their like - people who can stand on their own legs and do not have to depend on the government for their bread and butter. These are the people who constitute effective opposition, encourage and maintain a free press and can form voluntary associations to criticise the government. "Abolish these classes", he said, "by nationalisation of private property and land and industry and you will destroy every autono- mous social force. Then everyone is at the mercy of the State. That is why a command economy replaces not only the ballot box of the market place but a totalitarian Government replaces a democratic government provided by the Constitution."4 Thus after more than a decade of planning the Hayek thesis has returned to India with new vigour. A variation of the liberal counter-attack is found in the writings of Professor B. R. Shenoy, one of India's leading economists. Shenoy has argued that India has turned in wrong directions for inspiration. Planning for the free market, he says, has yielded blinding economic and social dividends wherever it has been tried : "In the post-war world, it produced the first miracle in West Germany. It then spread, with as good or better results, to the E.E.C, countries, Israel, Japan, Hong Kong, Spain and latterly the Philippines... News from this powerful reaction away from statism has not reached Delhi yet ; nor the Indian universities generally, where economists still fondly cherish outmoded dirigiste doctrines, fancying them to be the tenets of the nuclear era. The Galbraiths, Millikans, Rostows, Wards, not to mention 3 M. R. Masani : Planning for Prosperity , Forum of Free Enterprise, Oct. 1960, p. 5. 4 M. R. Masani : The Future of Free Enterprise in India , Forum of Free Enterprise, June 1961, p. 8. This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions PLANNING IN INDIAN DEMOCRACY 341 the pronounced left wingers like the Baloghs, Bettieheims, Langes and Robinsons - all sincere friends of India and hot favourites of our Government - through their expositions, probably stand in the way of our properly appreciating the tremendous potentialities of planning for the free maiket under the aegis of consumer sovereignty. The illicit beneficiaries of planning, now the power behind the throne, who too, are champions of mass prosperity, are another great hurdle to overcome. But neither economic nor social salvation is possible except through policies of economic and social reform."5 Although there is much that is relevant in the arguments of this liberal school, there is a natural tendency to exaggerate and argue out the Road to Serfdom thesis. There is hardly any collectivistic economic planning in India as yet. Professor D. R. Gadgil rightly points out that the public sector in India is still very small and that the apparatus of controls, allocations etc. is still very meagre and inefficient. The power of the State to regulate the economic activity is much less than in the countries of Western Europe which are said to have unplanned economies.6 It is also necessary to point out that the business community in India has yet to develop a standard of ethics and a coherent public philosophy. It is interesting to note that one of the important things done by the Forum of Free Enterprise has been the drawing up of a code of conduct. The Bureaucracy in Planned Development An interesting line of criticism is taken by Professor Joseph La Palombara who argues that in many of the developing countries the predominant role of the bureaucracy has been accepted as inevitable and that the expansion of the bureaucracy prevents the development of an effective infra-structure of democracy. The situation is worsened and is rendered even more vulnerable by the dominance of a single party and the failure to revitalise local-level forms of political participation and involve- ment. He points out to the difficulty of concentrating on both the economic development of the country and on the growth of democratic political institutions. In the event of a conflict between these goals (which are probably incompatible) when the nation is in a dilemma as to the choice of competing goals, the decision is inevitably in favour of the economic at the expense of the political. Professor La Palombara suggests a de- emphasis on the economic programme and greater attention being paid to individual and local level economic change which might evolve on 5 B. R. Shenoy :
'Consumer Sovereignty leads to Rapid Economic Development". Article written for Syndication by the Indian News and Feature Alliance (INFA) and reprinted by the Forum of Free Enterprise, July 1962. 6 D. R. Gadgil : Planning and Economi Policy in India , Asia Publishing House, J961? p. xii. This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions 342 THE INDIAN JOURNAL OF POLITICAL SCIENCE a more sporadic, piece-meal basis. He even argues the possibility of deve- loping "important attitudes concerning the freedom and the dignity of the individual in the developing countries" by encouraging "the kind of economic enterprise that is individually rather than collectively oriented, that exalts the place of the private entrepreneur rather than that of an all- embracing collectivity symbolised by gigantic, unwieldy, and unbending government." This policy of developing a national bourgeoisie will require, he admits, "the genuine integration and assimilation into the social system of the now harassed, bedeviled, and persecuted pariah entrepreneurial groups."7 Although Professor La Palombara's suggestion of de-emphasising the economic goals is hardly likely to command assent (as he himself admits), it must be conceded that there is substance in his charge that the bureau- cracy prevents the growth of the infra-structure of democracy. In the developing countries, voluntary associations tend to become passive instruments of the public administrator rather than checks on the bureau- cracy. I would like to illustrate this in one area of which I have first-hand experience. In Bombay's large housing colonies, managed by the Maha- rashtra Housing Board, the tenants have constituted themselves into associations which are supposed to constitute the links between themselves and the officials of the Housing Board. Formally, they are free and voluntary associations but in their actual working they display a pathetic dependence on the officials of the Housing Board. Many factors, undoub- tedly, contribute to this state of affairs. The tenants entered into a one- sided agreement with the Board in which the latter can evict them on a large number of reasons. The tenants for the most part were compelled to accept these agreements for they had no real alternative. They were in fact grateful to the Government for the humble accommodation which it had provided for them. Officials have even rubbed in this fact when com- plaints were made to them : "You came here with open eyes ; we did not compel you ; you signed the agreement on your own. You have therefore no cause to complain." The tenants are dependent on the Board's officials for all the basic necessities and are therefore inhibited in pressing their demands for improvements, lest they antagonise the officials. Complaints are often taken as a reflection on the efficiency of the Board and of its officials. Complaints are hardly attended to seriously. The working of these tenants associations well illustrates the threat to personal liberties involved in the expansion of an inefficient bureaucracy which is insufficiently positive in its approach. Another aspect of the working of these associations needs to be 7 Joseph La Palombara : "Bureaucracy and Political Development : Notes, Queries, and Dilemmas" in Bureaucracy and Political Development , Princeton University Press, 1963, pp. 57-58, This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions PLANNING IN INDIAN DEMOCRACY 343 mentioned if only because they are symptomatic of a general malady in Indian social and political life. The officials often interfere in the voluntary activities of the association. In one situation which the writer can vividly recall, an official of the Housing Board came to the colony a few days before Independence Day to inquire into the arrangements which were being made for the flag-hoisting ceremony and for the reception of the minister who had been invited for the occasion. The official not only made the inquiries - which is reasonable - but went on to suggest all the details, as to who should be invited, how the seating arrangements were to be made for the little tea which was to be given, and so on. At the same time he was interjecting the observation : "This is really your function, we are only the invitees !" On occasions like this, one gets the impression that the tenants association functions more for the convenience of the Housing Board than for the welfare of the tenants. To be fair to the officials, however, it needs to be pointed out that for this state of affairs, the tenants are themselves largely responsible. They can hardly ever think of any function without making efforts to invite a minister or the Board's officials. In one instance, the Minister for Housing had been invited to throw open a garden which hardly existed. A few flower pots were hired to mark the spot and the minister presided over the farce. Inquiry has revealed that this is done as part of a strategy which the tenants have evolved in their all-too-helpless condition. Since officials will not listen to their grievances, the slightest pretext for inviting the Minister is seized upon. On one occasion, the Board's official having sensed such a motive warned the tenants that the flag-hoisting ceremony ought not to be used for lodging complaints ! Whatever the reason for this practice, the habit of inviting officials or ministers for every function seems to have become a national trait. No less than the officials of the Housing Board succeeded on one occasion to invite the President of India to throw open a Community Hall put up by the Housing Board. The habit of inviting representatives of the bureaucracy or politicians has the effect of keeping Big Government perpetually before the eyes of the people. No association is considered important or worthy of support unless the Governor of the State is the patron and the Chief Minister its chairman. Even research bodies set up to carry out independent research on their own often load their executive committees with officials with the result that it colours the quality of the research which emerges from such institutions. At student functions and college associations and even at seminars and conferences of learned bodies, it is the politician and the official who must be invited to inaugu- rate them. A certain magnified conception of the "sarkar" has become part and parcel of the mental make-up of the Indian mind - of the intellectuals as well as of the masses. The expansion of government due to planning has accentuated this element. This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions 344 THE INDIAN JOURNAL OF POLITICAL SCIENCE Planning and Freedom The conflict between planning and freedom is often regarded as a matter of academic interest and in recent years it is only the business community which has raised the problem. The intellectuals have for the most part accepted the inevitability of planning and have no sympathy for the point of view of the businessman. There are several reasons for this attitude. A few of them may be indicated. In India the businessman has traditionally been regarded as anti-social in his activities ; for this image of the businessman he is himself largely responsible. A survey conducted in 1956 by the Indian Institute of Public Opinion in West Bengal and Delhi revealed a general antagonism towards the private sector. The greatest hostility came from those in the professions e.g., clerical, from students and urban workers. It was also found that hostility increased with education - university graduates being more hostile than illiterate people.8 Henry Schloss points out further that during the British period much of the business was in the hands of the British or of the highly westernized Indian elite. Thus during the struggle era an anti-British and an anti- business attitude became one.9 The dangers "of planning in India come from the expansion of an outmoded bureaucracy whose traditional methods of work are likely to produce frustrations and frictions as government activities begin to touch the lives of the people at a larger number of points. The multiplication of annoying regulations are justly condemned by the several critics of the Indian Government. The growth of delegated legislation does present an area which conceals the threat to freedom. The New Despotism of Lord Hewart is still with us. What happened in the Critchel Down Case can happen with greater frequency in India. Parliamentary supervision of subordinate legislation is formal and inadequate. Fortunately, however, there are indications of a desire to carry out a comprehensive examination of the administrative system. There is also beginning to emerge the awareness of the need to appoint officials on the pattern of the Ombudsman to receive complaints from the common citizen. Indeed, it is refreshing to note that the Government of Rajasthan has seriously thought of this device. But more serious is the threat to freedom from a society which is by and large authoritarian in its undertones and which has not developed either conceptions of individual freedom or of public interest. The proliferation of rules and regulations is related to the low state of public morale in the country. No sooner is a law made than the people have 8 Myron Weiner : The Politics of Scarcity , Asia Publishing House, 1962, p. 135. 9 Henry H. Schloss : "The Role of the Private Sector in the Indian Economy" in Studies on Asia, 1962 (edited by S. D. Brown), University of Nebraska Press, 1962, p. 78. This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions PLANNING IN INDIAN DEMOCRACY 345 discovered devices for breaking it, or found loop-holes which they can make use of to their own advantage. The bureaucracy in its anxiety to close these gaps, makes further rules. One can notice this interaction in several areas of administration. The result of this is that the honest citizen suffers at the hands of the bureaucracy and generally finds no means of redress. As India's authoritarian society gets more and more politicised thanks to the introduction of universal suffrage and the devices of liberal democracy, it will learn to manipulate the agencies of government. In a corrupt society, the bureaucracy must necessarily get corrupt. Indeed as Myron Weiner notes, some forms of corruption are part of the Indian administrative system and are needed as a lubricant. The dangers from planning seem to emerge from the social realities of our society and not so much from planning per se. In fact, there is little of planning in spite of the size of the five year plans. India is, to use the expressive phrase of Galbraith, a "functioning anarchy". Some built-in checks on the dangers from planning I have argued that the dangers to freedom in India come not from planning as such but from the authoritarian society in which it operates. But as already noted, there are influential sections of people in the country who feel that the planning process will lead to the twilight of liberty ; that India is already on the inclined plane to such a disaster. It is therefore necessary to consider some of the built-in checks. 1. India's administration is still dominated by the generalist administrators who are anxious to get as much support for their actions as possible. The Indian Civil Service has left behind some traditions which still serve the country usefully. India's planners have endeavoured to secure the greatest agreement for the economic programme. The actual dynamics of the planning process makes this evident. In the preparation of the Plan for instance, help was sought from every quarter. Leading public men and scholars, professional associations and independent experts gave the benefits of their experience. The Commission sought advice from its various panels on Land Reform, Agriculture, Education, Health and Housing and the Panel of Economists, and the Panel of Scientists. The Commission sought to prepare plans at the district, block and village levels. As a result of Panchayati Raj attempts are made to decentralise the planning process. It is of course possible to argue that a good deal of all this talk of decentralised planning does not work out in practice. But the desire of the planners and of India's generalist administrators to get mass support for their work cannot seriously be doubted.10 2. Collectivistic economic planning is hindered, paradoxically enough, by the very inefficiency of the administrative system. Adminis- 10 Cf Michael Brecher : Nehru : A Political Biography , Oxford University Press, 1959, p. 522. This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions 346 THE INDIAN JOURNAL OF POLITICAL SCIENCE trators find obstacles all over and red-tapism would frustrate the most ardent and vigorous administrator. Further, the federal system in spite of its highly centralised power system, makes the Centre greatly dependent on the States for its developmental programmes. "Perhaps nowhere else", Appleby has observed, "have so many systematic barriers been erected to prevent the accomplishment of that which it has determined should be done." In the case of the Compulsory Deposit Scheme, the States were far from enthusiastic in implementing what was by any standard, an unpopular measure. It is possible that one of the several reasons for the modification of the Scheme was the difficulty of implementation. 3. Finally, the implementation of the plan like its formulation is a part of the political process. Opposition parties have become articulate in recent years about their grievances and their criticism of government policies. One notes the vociferous criticism by the Swatantra Party and the business sections. The conflicts within the Congress Party itself prevent an all-out unified effort towards collectivism. Thanks to Panchayati Raj, the rural elite is also becoming politically conscious - although in varying degrees in different States. As Government policies begin to touch different sections of people, the latter will acquire a deeper understanding of the political process and will organise themselves. In 1959, the All India Agriculturists Federation was holding meetings in different parts of the country to awaken the peasants to the dangers of cooperative farming and Mr. Masani reports that when he presided over a peasants' conference in Sonepat in the Punjab in 1959, he was encouraged to find thousands of peasants shouting the slogan : Sanghi Kheti Nahin Karenge " (We will not do cooperative farming).11 More recently, the goldsmiths in the country put up a spirited opposition to the Government's Gold Control Order. They were particularly active in Rajkot where Mr. Masani won a splendid victory over the Congress candidate. The latter explaining to his Party the reasons for his failure mentioned the un- popularity of the Gold Control Order. These are encouraging signs for a society which for centuries adopted a docilely submissive attitude towards the Government and regarded it as ma-bap. As many of the organised pressures are exerted at the State level, the compulsions of ballot box democracy will make the State politicians more responsive to local pressures.12 But it will also make the problems of planning more difficult. New techniques of political action and new attitudes may have to be evolved but it will render the threat to liberty from collectivistic economic planning even less likely. i1 M. R. Masani : "Nagpur and After" in For Freedom , Farm and Family. Forum of Free Enterprise, 1959. 12 Myron Weiner : In his The Politics of Scarcity , Weiner has argued that the Indian Government has hitherto attempted to control, restrain and repress organised demands. This content downloaded from 14.139.122.40 on Sat, 6 Sep 2014 03:00:43 AM All use subject to JSTOR Terms and Conditions