In the 1950s and 60s, Indian governments and their expert advisers attempted to implement a set of economic policies generally known as ‘Nehruvian socialism’ because of its close identification with the country’s first prime minister. These policies were intended to end India’s economic dependence and raise its abysmally low living standards by accelerating industrialisation; their chosen instrument was national economic planning. Planning would, it was hoped, create a self-reliant economy and assure national independence and security in world politics. The development strategy embodied in the second and third Five Year Plans (covering the years 1956–66) was overtaken by a double crisis of economic stagnation and political instability in the later 1960s. ‘Nehruvian socialism’ was not formally abandoned, and India remained one of the world’s most highly regulated ‘mixed’ economies until the liberalisation of the 1990s. But there was a distinct watershed in 1966–70 that divided one political economy from another. The Nehru-era policies favouring cities, centralisation, bigness and capital-intensive industrialisation were modified by policies favouring agriculture, decentralisation and small producers. Here, I seek first to analyse a phase in India’s history that was both ‘post-colonial’ and, in the working assumptions of the major political actors, self-consciously ‘anti-colonial’; then to explain the transition to radical populism under Mrs Gandhi. The latter part of this chapter assesses the achievements and shortcomings of planned development.
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