"So entrenched was socialism in political thought in the decades that followed Nehru’s death that the country suffered from the innate tendency of bureaucracy, government machinery, and political actors to hesitate on market-oriented reforms for decades after," says Union Minister Hardeep S Puri
In an article for 'Indian Express', Puri, a former diplomat wrote: "Nehru’s own brand of socialism for much of his early political career was far more radical, encompassing several areas of communist thinking.
"As economic planning for independent India began in the late 1930s and 1940s, Nehru chose to tone down his views on matters such as land ownership and property rights, nationalisation of assets, and collective farming.
"His radical Left views found little to no resonance among his Congress colleagues, particularly the redoubtable Sardar Patel.
"Caught in the anti-imperialist impulse of the time, Nehru saw capitalism-infused global trade in terms of imperialism. The objectives of eradicating poverty and self-sufficiency saw Nehru choose a strategy based on heavy industry and development of modern technology.
"Recognising that heavy industry would not generate significant employment, he regarded small industry (consumer goods and light goods) and agriculture as integral to his strategy".
The article written under the title - "How Nehru’s vision hobbled India’s economy", Puri also says:
"Arvind Panagariya’s book "The Nehru Development Model" deserves to be read by those who still hang on to the Nehruvian vision and equally by those who want to profit from a cautionary tale of how difficult it can be to undo past mistakes.
"A scholarly account of the economic history of independent India outlining the various forces underpinning the dominant view of the time; it is a narration of the imperative to build a planned control economy with emphasis on heavy industry."
"Meticulously researched, this book builds the landscape of the economic regime in the Nehru years even as it systematically deconstructs how “Nehruvian socialism” became state policy.
Panagariya reveals the emaciating effects Nehru’s economic doctrine had on India’s growth prospects, leaving the country with the infamous “licence-permit raj”, an inefficient public sector, a bloated bureaucracy, a neglected agricultural sector, and misguided trade policies."
Puri also writes:
"Nehru’s own brand of socialism for much of his early political career was far more radical, encompassing several areas of communist thinking. As economic planning for independent India began in the late 1930s and 1940s,
Nehru chose to tone down his views on matters such as land ownership and property rights, nationalisation of assets, and collective farming. His radical Left views found little to no resonance among his Congress colleagues, particularly the redoubtable Sardar Patel.
"Caught in the anti-imperialist impulse of the time, Nehru saw capitalism-infused global trade in terms of imperialism. The objectives of eradicating poverty and self-sufficiency saw Nehru choose a strategy based on heavy industry and development of modern technology.
Recognising that heavy industry would not generate significant employment, he regarded small industry (consumer goods and light goods) and agriculture as integral to his strategy. The author states there was a hint of political optics behind this pitch for a “balanced production”."
"The bulk of the available capital was, however, used in setting up heavy industries while agriculture, and cottage industries were ignored.
Various policy and regulatory instruments were deployed, including the Five-Year Plans (special attention is paid to the second Five-Year Plan which truly cemented the Nehruvian vision); expansion of the public sector; licencing of private sector; import licencing and tariffs; price and distribution controls; and institutes of technical education (rather than prioritising primary education).
To quote the author, “this strategy represented the inversion of all developmental models, including import substitution which does not recommend heavy industry as the starting point.”
"The Panel of Economists constituted by the Planning Commission to review the draft of the plan endorsed the Nehru-Mahalanobis approach. Even prominent industrialists saw merit in major facets of the plan in the immediate years after independence, developing serious differences only after the hasty nationalisation of certain industries in the early 1950s and the first balance of payment crisis in 1957.
Nehru with Mahatma Gandhi
"The only dissenter on the panel, B R Shenoy, made a farsighted observation when he stated that to “force a pace of development in excess of the capacity of the available real resources must necessarily involve uncontrolled inflation… [it] may prove to be explosive in a democratic community where people live close to the margin of subsistence," says Puri.
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