Parv Tyagi and Prem Parwani

In this episode of Arbitrary, Parv Tyagi (former Managing Editor, LSPR) and Prem Parwani (Editor, LSPR) speak with Dr. Nikhil Menon about the history of planning in India. They discuss the centrality of planning in the project of nation building, the legacy of P.C. Mahanolobis, the economists who dissented from his central-planning orthodoxy, and the continued impact of planning in Indian policy making. Menon is a historian and Professor at the University of Notre Dame, USA. His book, Planning Democracy: Modern India’s Quest for Development, tells the story of how India wedded western-style democracy and Soviet-inspired economic planning in the mid 20th century.

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Parv:

Hello and welcome to Arbitrary: the flagship podcast of Law School Policy Review. Today we have with us Dr. Nikhil Menon, Assistant Professor of History at the University of Notre Dame. Menon is a historian of modern South Asia, specializing in the political and economic history of 20th-century India. He grew up in Chennai and studied at University of Delhi as well as Jawaharlal Nehru University and he did his PhD in history from Princeton. As noted, his research interests include twentieth-century India, particularly histories of democracy, development, and diplomacy in independent India.

Menon’s book, Planning Democracy: How a Professor, an Institute, and an Idea Shaped India forms the crux of our conversation today. The book reveals how India wedded western-style liberal democracy and Soviet inspired economic planning in the mid-twentieth century, when the Cold War pitted them as incompatible. It shows how planning enabled the establishment of independent India’s data infrastructure, the role of P.C. Mahalanobis and more. Parallely, the book shows how the rhetoric of ‘democratic planning’ led to the government engaging citizens through means as varied as films, plays, and even Hindu ascetics, and the centrality of planning in the narrative of the Indian nation-building.

Together with Prem, I welcome you to the show Nikhil! Thanks for agreeing to do this!

Nikhil:

Thank you, Parv, so much, and thank you Prem for inviting me, for engaging with my book. It’s a real pleasure to be here.

Parv:  

At the outset, what an absolutely well-written book. As someone deeply interested in the history of economic thought, I found this book both riveting and useful. So, may I begin by asking what made you write the book?

Nikhil:   

What made me write the book? I mean, I suppose some of it was a compulsion. I was doing a PhD and I was doing research, but more seriously, the reason that I was interested in the topic is that I grew up in India in the 1990s and planning was something that was still very much around. There were five-year plans, and the planning commission was written about in newspapers, it was all around us. But it seemed to have been something that had seen a fall from grace, had once been extremely popular, but was now seen as a vestige of an earlier era. And, as I was beginning my PhD, I knew that I wanted to work on independent India. This was a time in which they were, I began my PhD in 2011, and there were just a few works that were beginning on the histories of the 1950s and 60s. I felt that this was something that I hadn’t studied in school; our histories, at least till when I was an undergrad in Delhi, stopped in 1947, right with independence and partition. I thought that there was actually lots to be done on the history of independent India and planning was something that, again, I felt seemed extremely important to the time, but one that was under historicized. All the writing about it seemed to be from either ex-planners or by economists, but there seemed to be, I thought that there must have been some fascinating history about why planning became so popular in a country which had a liberal democracy. That is why I began to research for this book. The topics that I ended up writing about, those were more by happenstance. Some of it, as with all historians, driven by what you find in the archives and how your interests evolve as you are in the archives. But that is how I broadly came to the subject.

Parv:

Do you see any continuity between the colonial and post-independence narrative of statistics? We know and as you point out, our colonial administrators also tried to map India. The census we all know began under the British. Later, the interwar period witnessed the onward march of planning so to speak. Central planning is very much in vogue back home, in Britain.

Nikhil:  

You are right to say that there are some continuities, but my research really tries to focus on the discontinuities or the ruptures between these periods. As you mentioned, from the late 19th century, statistics in India was becoming more elaborate, more detailed, but what most of these colonialists did is that they dealt with trade and administration. Apart from that, they were also disaggregated by province. So, Madras province, the United Provinces would have their own separate statistics on trade and administration. And what the first half of my book tries to argue is that the establishment of a centralized national statistical infrastructure or a centralized data infrastructure was really a postcolonial phenomenon. This national statistical infrastructure involves the founding of institutions like the Central Statistical Organization, the position of a statistical adviser to the Government of India, a statistical service cadre in the in the ICS, the Civil Services, the regular measurement of national income, or what today we call GDP, and perhaps the most significant achievement institutionally was the National Sample Survey. As many of your listeners will perhaps recognize many of these institutions still are in use till today. The argument that I am making in the first half of my book is that these institutions, these statistical or data institutions, were developed in direct response to the needs of centralized planning. India had chosen to plan its economy and the actors involved in this institution building, this data institution building, pointed to Five-Year Plans as the impetus behind setting up the state infrastructure. So yes, there was a continuity. But I think that there is more insight to be gleaned from looking at the ruptures rather than the continuities.

Prem:

Thank you for that. I would like to proceed to the next question that we have lined up. So regarding the origins of why we felt that we needed planning at the time, you mentioned a couple of central reasons, some of them being that it was a nationalist counter reaction to colonialism and it was India’s middle path in the Cold War. My question would be, would you say that planning is in some sense, an imported idea? The reason this question comes up is because we saw how a lot of Mahalanobis’s inputs were from foreign scholars at the time. At the time, planning was not something that was peculiar to India as such, particularly in the light of the Soviet influence. There was also push for import substitution, which was incorporated in planning, which, as you noted, was Western or thought orthodoxy at the time. Would you then say that perhaps planning was a sort of important idea?

Nikhil:   

Thanks, Prem, for that question. I think that when thinking about whether something is imported or indigenous, it is worth pausing to consider what we mean by those terms: imported or domestic or indigenous ideas. Because I think historians find it notoriously difficult to definitively identify the origin of an idea, right? I mean, ideas do not come with a birth certificate. So, it is very hard to pin down an idea to one geographic location. So while I agree with the description of centralized planning as drawing from foreign inspiration in the early 20th century from Japan, the Soviet Union, Britain and the United States, Indian planners, like Mahalanobis, thought there were actually antecedents in Indian history as well. Mahalanobis would point to things like a statistical development in the Arthashastra, Kautilya’s Arthashastra, or in the administrative systems of the Mughals, and say that those actually are also examples of when there are booms in state-building, that there is also an architecture of statistics and data that is developed. And so, I think that for the purposes of Indian history, it is more useful to think about how Indian planning acquires its unique character, which is a combination of foreign influence and homegrown contributions. But you are certainly right to point towards its a very global character. During the mid-20th century, there is certainly this global wave of planning, and though, I say, planning, it does not mean that the rest of the world was following exactly the same economic policies is India, because planning was this umbrella term that included very different strategies on levels of control, on centralization, on trade and industrial policy, etc. But I think that the influence of the Great Depression should not be underestimated. The Great Depression really showed to global markets the vulnerability of the capitalist system, and close on the heels of that is the Second World War which proved to many and demonstrated the effectiveness of state involvement in the economy. So, I think that both the Great Depression in the late 1930s, early 1940s, and the Second World War in the 1940s, were both important backdrops to the popularity of planning globally at the time.

Prem:

Right. It makes sense to me that you mentioned that what is most significant is perhaps to pay attention to the unique character, the way that planning developed in India. My follow up to that would be in what manner do you think the failure of planning, as such, has affected how we see our modern economic order today in the same way that the Great Depression affected how we brought planning into existence?

Nikhil:  

Yeah, I think that again, there is sometimes a sort of nostalgia for planning as well. I mean, in the final pages of my book, I talk about how, during the 2019 campaign to the general election Rahul Gandhi talked about scrapping the Niti Aayog and reviving the planning commission. Mamata Banerjee, when campaigning in West Bengal, talked about having a planning commission for her state, which will include these famous economists like Abhishek Banerjee, Amartya Sen, some homegrown talent on its own planning commission. I also talk about how there have been editorials in financial newspapers in India asking ‘Who will be the BJP’s Mahalanobis?’, about ‘Rebuilding the House that Mahalanobis had Built’. So, I think that there is a yearning for a kind of technocratic savior. I think that the popularity of Raghuram Rajan, the sort of celebrity status he enjoyed a few years ago, is sort of a part of this. So, I think that 10 years ago, the stock of planning was even lower than what it is today. I think that today, in some ways, there is almost in certain circles a nostalgia for a body that was comprised of experts and that was put on a pedestal by the government. In a political climate today where many people feel that the government looks down on intellectuals and on expertise, I think that there is a nostalgia of the planning commission. Whether that is an appropriate response, or sort of misguided response to the situation is, I think up to your listeners to discern. But I do think that while India has turned away from planning, it is hard to say where that leads India. I mean, it certainly has not led India to become a laissez faire economy, or even a capitalist economy, even to the extent that say, the United States is. Interesting enough, in the United States, there has been a debate over the last 2-3 years, especially after the COVID pandemic, about industrial policy and return of industrial policy in the United States. A turn away from globalization and from free trade, especially in the battle against China, towards providing subsidies for domestic industrial production. In some ways, you see America as the sort of arch-capitalist nation on the planet, itself, turning back towards policies that would remind people of import substitution of the 1950s in India. So, I think that today those questions are once again being opened up. again. So, I don’t think that the certitude that we might have had in the 1990s, or the early 2000s, about the path that India might take or the path that India should take, I think even amongst very mainstream economists, there has been a turn in those ideas.

Minoo Masani, N.G. Ranga and C. Rajagopalachi (from light to right)

Parv:  

Just to sort of steer back to the book:- while planning is the orthodoxy of the day, there was some resistance to it too. How powerful was the resistance to statistical planning? We had the Swatantra Party, Rajaji, Masani – the entire political cohort. You had B.R. Shenoy, C.N. Vakil and PR Brahamananda – the economists. How was this resistance/opposition channelized systematically (if at all)? Was it scattered: which perhaps explains why it failed? What support (if any) did the free marketeers outside India extend to this opposition.

Nikhil:   

That is a great question and I think that what we need to remember and what I think we are trying to do in the book is to remind us that these figures of opposition, all of whom you rightly mentioned, represented collectively a marginal position in the Indian political discourse. That is what I’m trying, in some ways—to recover through the early pages of my book, that all of these figures who today you might think of as representing mainstream economic opinion, in the 1950s, they were marginal. It was not as if Nehru was choosing an idiosyncratic path in choosing planning. Actually, though, the majority of economists backed the strategy. So, what I was actually very surprised to see was how popular the idea of planning was in the 1940s and the 1950s. And as I said, part of that surprise comes from having grown up as broad as you did, much younger than me as you are, and having grown up in a post-liberalisation India, where the market has already ascended to this hegemonic place. So, what I am trying to do in the book is to cover the intellectual context of the mid-20th century. In that context, you find that amongst politicians, planning was backed by the people seen as the economic modernizers in the Congress Party like Nehru, and like Subash Chandra Bose. Bose, in fact, is the one that proposes a National Planning Committee. Amongst sort of moderniser scientists Meghnad Saha and Mokshagundam Visvesvaraya are arguing for planning from the late 1920s onwards. Amongst industrialists—again, a group that you might imagine would be just to whom planning will be anathema—JRD Tata, GD Birla, Lala Shri Ram – they are all for planning. In fact, they come up with their own plan, as many might recognize as the Bombay plan of 1940s. In the 1940s planning of different kinds is proposed by the Congress, by communists, by businessmen in the Bombay plan, by Gandhians, even by the Muslim League. I was also amazed at how popular planning was internationally at the time. As you mentioned, Britain’s labour manifesto in the mid-1940s mentioned planning, the Soviet Union is planning, China’s planning, South Korea is planning, Japan is, Vietnam, Malaysia, France, Mexico, Argentina, Ghana, Sudan, Tanzania in Africa. These are just some dozens of countries that are planning in different ways. And the reason for this, of course, is that mainstream development economics, at the time, recommended policies of state led industrialization, of import substitution and of planning for late industrializing countries that were in what is called the Third World countries of the Global South that were sort of just decolonizing. So once again, India and Nehru at the time, were making fairly orthodox choices. Now, you can say that those were bad choices to make but, if you were arguing that you will be arguing against the preponderance of what economists in the country were arguing (and internationally, were arguing) was appropriate for India at the time. So, I think that what we need to remember is that mainstream opinion within a field like economics changes over time, and that that has its own effects, right? So, even for those who believe that expertise is important, just simply saying to follow the expertise is not always a panacea. There were some dissenters in the 1950s, as you mentioned, but they were few and far between, and one set of critics were the Gandhians who believed that the Planning Commission’s emphasis on industrial growth and urbanization was abandoning Gandhi’s belief in a village based decentralized sort of agrarian economics. Someone like J.B. Kripalani, who was the former president of the Congress, falls into that category. Another sort of critic were people like ‘Rajaji’ C., Rajagopalachari and Minoo Masani who would form the Swatantra Party in 1959. These were economic conservatives who believed in a modern industrial economy, unlike, say, Gandhi, but wanted the state to play a much smaller role in it. So, the Swatantra Party would be this kind of liberal pro-market political outfit. And amongst economists, there were critics, but they were marginalized even in the academy. These were the people who were referred to as the Bombay school – B.R. Shenoy, C.N. Vakil, P.R. Brahmananda,  people of the Bombay School of the wage goods model. But they talk about the hostility that they had to face and sometimes they talked about how being critical of the Plan was sometimes to be seen as anti-national and sometimes even a CIA agent. But while their critique was important, again, I want to stress that their criticism was one that would gain widespread acceptability only from the late 1960s after the crises of the initial plans. And it is important to remember why the Mahalanobis model won out and it was because it was popular amongst professional economists in India at the time. So many of the biggest names in economics from that time, V.K.R.V. Rao, K.N. Raj, Sukhamoy Chakravarty, Amartya Sen, even Jagdish Bhagwati, were all very pro planning in the 1950s. So, for example, what I tried to do in the book is to not just present the views of planners, but also present the views on planning by people who are critics of planning and their assessments of why planning did not succeed in terms of it being effective, but succeeded in that it was implemented as opposed to a non-plan economy being pursued. The British economist Peter Bauer was a lifelong opponent of protectionism and state planning. He talks about how, and I’m going to quote, he talks about how the Mahalanobis plan frame and the second five-year plan very largely reflected the “then dominant opinion of development economics in the West”, that it was then the “current orthodoxy”. Then he goes on to talk about how it was not just orthodoxy amongst these development economists, but it also received endorsement from prestigious and influential publications in the West, and by international aid agencies like the Ford Foundation, and USAID. Somebody who today is seen as very much a champion of the market, and of laissez faire economics, Jagdish Bhagwati; today, he is a famous critic of planning. But even he recalls. coming under the influence of Mahalanobis in the 1950s, and he said, and I quote, again, “back then we were all export pessimists” and sort of he jokes afterwards saying that “India’s misfortune was to help brilliant economists.” That is the context in which we need to think about the criticisms of the five-year plan and why the criticisms didn’t land a bigger blow on them.

Parv:

That’s actually very useful. And as we are on the subject of critique of planning, we we discuss political and economic critiques, let’s turn to sociological critique of central planning. You note that the adoption of centralized economic planning elevated the discipline of statistics to a status rivaling economics – quite obviously, planning is made possible by accumulating masses of statistics about people. Now, anthropologists and sociologists like Foucault and James Scott have critically examined the centrality of statistics in the project of state control – these accounts are critical of the political rationality embedded in statistics. In similar spirit, Austrian liberals say: Statistics foster in the interventionist a sense of knowledge and expertise (and it is this sense of expertise and precision that the Austrian tradition has long challenged). Do you think that in India, the project of planning led to depoliticization of sorts – where citizens and their lived realities became numbers for the state or put differently, the citizens were abstracted into population groups that were to be managed? And were the policymakers of that time cognizant of this pitfall of overreliance on statistics to solve the problems of the community?

Nikhil:     

Yeah, Parv, I think that you have put your finger on one of the key themes of the book. In the first half of the book, one of the arguments I tried to make is that planning and the development of this data infrastructure that it sparks leads to a technocratic mode of policymaking. The Planning Commission itself was created as a body that was meant to be insulated from and unresponsive to political pressure, and you find that to someone like Mahalanobis, economic questions had either right or wrong answers. Of course, he was trained as a physicist and he thought of economics in some ways, like physics, that there were plainly right and incorrect answers. In the book, I talk about how the then young Milton Friedman, who would you know, in the latter half of the 20th century become a celebrity economist and champion of the free market, in 1950s, Milton Friedman meets Mahalanobis and is of course, is very impressed with Mahalanobis’s intellect, but completely disagrees with Mahalanobis’s solutions to economic problems. And he has, I think, quite an insightful take on Mahalanobis which is that Mahalanobis, as brilliant as he was, is like other young, gifted mathematicians in that they believe human beings are pieces on a chessboard. Here, Milton Friedman is channelling Adam Smith from ‘The Wealth of Nations’, in which he says that, some people believe that planners think of human beings as pieces on a chessboard, who can move according to the will of the planner. This is the sort of thing, Milton Friedman argues, that is very likely with someone who develops talents in mathematics at a very young age, and they become very used to having a very clear solution to a problem. But unlike in mathematics and unlike in physics, in economics, there is a lot of grey – there isn’t always a clear right or wrong answer. And that, to Milton Friedman, is the problem that planners have, which is that planners expect that these problems can be solved and that they can have all the information that is necessary to move pieces on a chessboard. But of course, human beings and human and economies are much more complex than a chessboard and you cannot predict all of the variables involved in them. And so, I think that for someone like Mahalanobis, at least, the criticism of de-politicization is justified. But on the other hand, other members of the government, who were ardent supporters of planning, like Nehru, were susceptible to political pressures. They could not afford to think of the matter of planning in this cold and technical manner. But Nehru too, and I think that this sort of strengthens your argument, Nehru too would often speak of development as a domain beyond or outside of politics. So, the first half of my book is really about how planning becomes this technocratic domain and planning operates as a technocracy, and of course, the second of my book, about democratic planning, which we will come to, hopefully in a few minutes, tries to see the ways in which the government tried to work against that technocracy at the same time. But before we move on to another question, I would like to caution against the tendency to think about this trait of de-politicization as unique to centralized planning or to socialism, because we have seen similar depoliticization in the discussion in India of issues like the UID and Aadhaar with the belief that technology offers an obvious and apparent solution, one that will not have costs or trade-offs, regardless of other concerns, such as those of privacy, that the technology itself offers all the solutions. I think that we see this de-politicization as sometimes an unquestioning celebration of the market, where it is assumed that the market can resolve everything efficiently, and that they will not be costs that are effectively political choices about wealth concentration, inequality, access. These are all political questions, which I think that politicians or policymakers have to engage in, and that while the market can provide answers, those answers are political answers, which have political ramifications for things such as inequality. And I think that sometimes that can be overlooked as well.

Parv:

Taking cue from your answer- let’s now pivot into, or turn our attention to the second half of the book- In theory and in practice, central planning is seen as being inconsistent with democratic freedom. The Indian government, however, as you note, sought to negotiate an unorthodox marriage between the two – ‘democratic planning’ emerged as a product of that marriage. The government called upon the citizens to help build the new state through mass participation. This was affected by a colossal and mammoth programme of outreach, of making people ‘plan conscious’. Success of the plans depended heavily on the citizens actively working towards the plan. But how democratic could this planning be said to be when the government instructed its citizens to save, consume and invest in accordance with the plan? Planning brings with it a great deal of control and coordination and interference with individual freedoms? Do you then think that ‘democratic planning’ was just a mode of state legitimation that deployed the rhetoric of democracy?

Nikhil:     

If you don’t mind, I’d like to begin by pushing back just a little bit on the premise, which is that planning is seen as being inconsistent with democratic freedom, because most people in India across the political spectrum in the 1950s in India would have, I think, disagreed with that claim or found that claim to be strange. And I think that we need to be sensitive to how historically conditioned our own attitudes on these matters are. So, for example, in the 1950s in India, there didn’t appear to be a reason to assume that planning and freedom were mutually exclusive. In fact, the fear in India, I think, was more about a rampant and unchecked capitalism – that this rampant unchecked capitalism, which was associated with British colonialism, which of course India have just very recently been under the yoke of, was an extreme form of unfreedom, that capitalism, which could lead to colonialism was the threat of unfreedom and not planning. So planning was sort of seen by many as a way of fight against unfreedom and of course, then we can sort of debate whether it becomes a form of freedom in itself. But just so your listeners, who may not be familiar with my book, get a sense of what we are talking about – we talked about this rhetoric of democratic planning that the government had – I would just like to give your listeners some sense of what this was. So, democratic planning was this idea the Indian government had and it was a phrase they repeated ad nauseam to the 1950s and 60s. It was the idea that Indian planning was different from communist planning. That Indian planning was different from what was happening in China and the Soviet Union, basically, because in India, what there was, was only carrot, only incentive, but no stick – no coercion was possible. Unlike in China, where you could just expropriate property, you could not just sort of compel people through the threat of jailing, for example, if they didn’t do certain things. So, you are right to say that there are sort of some limits on people’s freedoms, but it is through incentives and disincentives. And I think at that point, one of you might argue about how different is data from say, a central bank raising interest rates thereby, influencing consumer patterns in society, or government raising taxation rates, thereby impinging on the consumers ability to spend or to save, etc. So, I think that that is the Indian government is talking about when it says democratic planning, which is that there will be plans. But I think that we need to remember what Indian planning was, effectively, was not like what planning in Soviet Union or China was or could be. So, what any democratic planning was, was this kind of mixture of real idealism, some might say naivete about democracy and public participation and citizenship, combined with I think, also a realism about state capacity, about how limited Indian state capacity was. And that is because Indian state capacity is so limited that you need it to engage in this sort of all out public outreach program in order to get citizens excited and enthused about the five-year plans and, therefore save and invest and contribute towards it, even if you are not getting any money, or remuneration for it – so just voluntary contributions. I spend a chapter in the book talking about these voluntary contributions towards the plan and so, what democratic planning is, is a concept that really smacks of Nehruvian India. It is a concept that I think, might appear faintly ridiculous today. But at the time, we have to remember the 1950s, this is a generation of Indians that had spent decades, if you are an adult, under British colonialism, and had been a part of a freedom struggle. So, perhaps the idea of calling upon people to make voluntary contributions was not as absurd then, as it might sound today. So democratic planning was socialist inspired, of course, but not quite socialist. It was romantic in its vision, but often fell short in its practice. And so, the Indian state really put a lot of time, money and effort behind popularizing these plans. It took a remarkable number of forms and if you don’t mind, I would just like to give your listeners a sense of the kinds of forms that this democratic plan took and this campaign took. So, the Ministry of Information and Broadcasting had an entire wing dedicated to planned publicity, and they were publicity officers in districts across India traveling on bullock carts, on Jeeps, on boats, carrying publicity materials about the five-year plans, showing films on film projectors with a bedsheet that they would put perhaps between two trees or like two poles on which they project a film – planned propaganda. There was a song in Drama Division in which dramatic troops across the country were hired and paid to perform skits, and plays, and musicals about the Panchvarshiya Yojana, or the five year plan. There were university planning forums across the country. Most central universities in the country and colleges had the university planning forum where undergraduate students debated aspects of the five-year plan. There was a magazine called Yojana, which still exists today, which was about the five-year plan. There was a voluntary organization called the Bharat Sevak Samaj. There was, of course, films division that was producing a huge amount of films about development and five-year plans, and some of these films are really absolutely fascinating. I talked about one in which a villager visits the Planning Commission in Delhi, another about an alien visiting from a distant planet, checking in on the progress of the five-year plans. And I also talk about how this was just the government’s own effort at popularizing the plans. But I think that we have to also consider the ways in which democratic planning became part of the popular culture of the era, and how plans seeped into the popular culture of the era. As I discussed in the book, there were novels in the 1950s like the highly regarded Jhutha Sach by Yashpal, which talks about planning. There were popular players like Mr. Gowen that had planning as its key backdrop, Bollywood movies like Naya Daur, which featured Dilip Kumar, Char Dil Char Raahen with Raj Kumar, Raj Kapoor, Shammi Kapoor and Meena Kumari, Bollywood song sung by Lata Mangeshkar and Mohammed Rafi that talks about planning. And of course, there is the experiment that I end the book with, called the Bharat Sadhu Samaj. A quite surprising experiment between the Congress Party and its politicians and Sadhus or Hindu ascetics in which figures in the Congress Party, like Gulzarilal Nanda especially, thought that the way to really reach the Indian population and to convince them about the applicability and desirability of planning and citizen involvement then was by reaching out to them through a religious medium, through Sadhus, and having Sadhus sort of preach the gospel of the five year plan and sort of incorporate the five-year plan into their kathas of the Ramayana and Mahabharata. So, these are the sort of many ways in which the democratic planning unfolded, and I mean to just briefly come back to the question of how democratic it was. This is the central tension that I identify in the book – the push and pull between these competing urges of technocracy and democracy. That is what makes it fascinating to me as a historian because there were enough people both in in the Indian government and in India at the time, who, seemingly paradoxically, were committed to both technocracy and democracy at the same time, and they seem to have held both these ideas, for obviously intention, in their heads and in their policies at the same time, and that is what I am trying to uncover through this book.

Parv:

Yes, I think you may be right. In fact, as we speak of the incompatibility between planning and freedom: perhaps, it might be useful to distinguish between the economic coercion of the 1970s under Indira Gandhi and the Nehruvian central planning in the 1950s which as Jagdish Bhagwati and Arvind Panagariya note somewhere, was not marked by heavy Nationalization, decimation of private property rights etc. of the sorts witnessed under Mrs Gandhi.

Nikhil:

Again, if you go to critics of planning, even there people like, say, as you said, Arvind Panagariya, or Jagdish Bhagwati, or Vivek Debroy, or Niranjan Rajadhyaksha, they all make this sort of distinction between, even though they don’t really approve of all Nehruvian policies, they still say that there is a qualitative difference between the policies that were pursued in the 1950s and 60s, and in the late 1960s, and 1970s. And that, under Indira Gandhi, especially you see, again, without getting into whether it’s good or bad, a much greater level of state control and intervention in the economy, and an environment that is much less hospitable to private industry.

Prem:

Right, thank you for that, if I can just circle back to looking at planning globally, the way that we previously discussed it, the way that the planning commission was sort of legitimized and promoted was by using democratic rhetoric as justification. Now it would seem to me that this was neither new nor peculiar to India. Would you say that this use of rhetoric of democratic planning of the Indian kind have any parallels elsewhere? If so, could that inform our understanding of the trajectory that planning eventually took?

Nikhil:

There were, as you say, of course, other countries that retained democracy and had planned economies, but I think India was even amongst those- that cohort of countries- particularly prominent, and particularly noteworthy. And the reason is that India was the one of the countries, like, for example, France which also had a democracy and planned economy,  that globally was seen as the test case as the one that had the greatest stakes. Why? Because of India’s size, at the time, a population of around 300 million people already at the time, the second most populous country in the world. The depth of its poverty was another factor, the geographic location in Asia, right in the backyard of the two largest communist countries in the world, the Soviet Union, and Mao’s China. all of these combined to make India seem – for example, if you read the sort of the headlines from The New York Times, from the late 1940s, early 1950s, when they talk about planning in India, they refer to India – as a sort of last bastion, as a global experiment because if India was not able to maintain this, they believed that India would be another dominant pole to communism. And so, I think India was seen as having the greatest stakes amongst these cohort of countries, and the manner in which each of these countries went about the economic organization was, of course, unique to each. And so as a historian of India, to me, it is India’s path that I find most interesting. But apart from those very sort of narrow reasons of being from India and being a historian of India, I do think that even globally, on an objective level, I think the Indian case was the case of democratic planning with the great stakes. And I think that sets apart some of the ways in which democratic planning played out in India, such as, say, the use of Sadhus that I alluded to, a few minutes ago, were absolutely unique to India.

PC Mahanalobis

Parv:

As you note, the congress government often defended the plans by pointing to the electoral mandate it continually secured. But using that, as Minoo Masani said, was to miscalculate the real feelings of the people – planning may not have been such a popular undertaking after all. In any case, how much of democratic planning was a means by which the congress’ position as the party in power was legitimized? You mention that despite uneven results, the government remained committed to plan publicity campaigns – Is that explained at least in part by the congress’ desire to keep these campaigns alive for political/electoral purposes?

Nikhil:

I think that it’s a question that is important, and is one that I tried to address to some extent in my book, but it’s one that I found hard to answer. Because, I think that in some ways, the most obvious answer is that the Congress Party continues with this planned publicity campaign well into the 1960s and early 1970s because it must have had some electoral purchase, there must have had some, you know, positive ramifications electorally. But I don’t see any real evidence of that. I mean, it’s not the most efficient way of spending money. If you were to, of course, you could say that it’s not the Congress but it’s pretty much the government of India spending money and so this is a sort of proxy for Congress propaganda. [But] I think that it still doesn’t seem to be an efficient allocation of election campaign resources of the Congress party’s time. I think that some of it is explained by institutional inertia: that things are set up in the 1950s, it’s just continued. Some of it has to do with the identity of the state, which is the identity of the post colonial state which comes to be associated with development and the state and the government wants to associate itself with, you know, as today the government talks about Vikas: about being the engine that is delivering development to India. Some of it has to do with the genuine idealism, about planning, this idea of democratic planning, which is that citizens should be aware of the plans, and they should participate in it. But among the more cynical parts of government (and we still are planning our economy… by the 1960s, and 70s,  planning is still seen as central to how the economy is organized, and then so if you’re going to plan the economy, and yet the Indian states capacity is so little, we certainly need people to be investing in accordance with what we want, we still want them to be sailing in accordance with what we want, we still don’t want them to, you know, consume in accordance with what we want, right? So, and this is something that other scholars like Taylor Sherman, Benjamin Segal, have talked about in their work as well, which is that there is this whole emphasis on self help, this emphasis that Indians, for example, during the famine [or food shortage] , they skip a meal, that they not spend on certain items in order that foreign exchange needs to be preserved, that they save in accordance with what the five year plan recommends, that they bank with certain banks in accordance with what the five year plan recommends, that they buy gold in accordance or they sell gold, according to what the government wants. All of this is because the government realizes that without citizens doing these things voluntarily, with some nudging by the government, the government’s 5 years plans had no hope at all to succeed and I think is partly why there is this continuing effort at propaganda about plans, about spreading the message about plans, because it’s seen as being essential to making the economy tick.

But I think apart from that, you’re right, that some of it has to do with citizens’ money being paid for Congress campaigns. Some of it has to do with also the fact that planning had become, as I argue in the book, this kind of grand narrative for the nation after independence, a master narrative that held the country together, the idea that all of the aspects of what we want this country to be is held together by the plan. And if the plan and the plan was a good way to convey all of the messages the government wants to convey. I think that combination of institutional lethargy, inefficiency, cynical Congress propaganda, and some idealism/naivety/realism were some of the ingredients that went into these plan publicity campaigns continuing.

Prem:

Just want to circle back to something that’s contemporarily relevant. Do you think that a lack of strong computational abilities was one of the significant reasons why planning didn’t seem to work out as well back then, because we saw in many parts of the book how procuring computers was always a challenge and how planning was always a conundrum, a dilemma as such? To what extent would you say the lack of computation abilities ultimately led to the triumph of laissez faire model of economic organization, but definitely more significantly market oriented model economic organization? Given that now we have extremely advanced computational technology, do you see planning making a comeback, in some sense or are things different this time around?

Nikhil:

I think that the question has been raised in economic circles about whether the triumph of Big Data heralds a new era for economic planning, I refer in the book to pieces in the last four or five years, from the Financial Times, from Wall Street Journal, which asked the question, which is that now that we have supercomputers and big data, since information and the ability to crunch information was one of the significant flaws of the planning system now that that is much more easily available, good planning, may make a comeback. And in some ways, China continues to be a planned economy, right? China is considered one of the most successful economies in the world, and a threat certainly to US supremacy. And certainly, China has beaten India for decades now, and is far far ahead of India. And it continues to plan its economy. So again, I think that when it comes to planning, I think we need to separate what we mean, within the umbrella of planning. Are we talking about import substitution policies, which is certainly not what China follows now, especially after Deng Xiaoping, or is it export-led strategies that are still planned? Are we talking about some level of government controlled industry and some level of private industry? Or are we talking about an economy that’s completely controlled by the government? And I think the continued resilience and success of the Chinese economy does throw open the question of whether good planning still work today? I mean, the question of whether we should adopt or not is a different question. But the question of whether it could survive in the modern day environment, I think, is pretty clear from the Chinese example which shows us one way in which it can be remarkably resilient. But I don’t think that it’s India’s insufficient computational abilities in the 1980s that led to the downfall of planning and the rise of a more market oriented economy. I think that that has more to do with the inability of the new economy, the Indian planned economy to match growth expectations, even compared with other planned economies, such as that of China or South Korea from the 1980s onwards. So India’s planning was seen as a failure because it was not matching that of many other economies in the world. And also combined with that the fact that by the 1980s economic orthodoxy and the mainstream view of development economists had changed on these questions on the questions of whether the state should be as centrally involved on questions of import substitution. So, again, Indian economic policy is perhaps sort of lagging indicator of where mainstream professional economists views on these matters are. And not to mention that one of the reasons that I think planning loses its cachet is the epochal events of that decade of the 1980s, which is the downfall of the Soviet system, which of course, discredits the plan model to an enormous degree. The Soviet system was the system that was most associated with planning and the fact that the Soviet Union crashes in on itself leads to planning itself losing some of its sheen.

Parv:

You note that the Planning Comm’s prestige began losing altitude during the II FYP – parts of the plan had to be scrapped etc. When Nehru died, the Planning Comm lost its most powerful champion. Fast forward to 2014 – the Planning Comm was consigned to history. But even though the Planning Commission – the institute tasked with planning – met its demise, planning as the dominant governance philosophy remained central, and arguably continues to remain central, to Indian policy making. And when I say planning, I mean planning as understood very generally. What do you think?

Nikhil:

I think that when we talk about continuities, it’s best to be very careful about what we think is continuing, right? Because even though the planning commission existed from 1952-2014, they were very different organizations at those two ends of that chronology from 1950 to 2014. And so, in some ways, the planning commission of the final years of UPA II say 2010 to 2014 was closer to today’s Niti Aayog than the planning commission of say 1956. I mean, just to sort of clarify, the planning commission in 2010 is perhaps closer to Niti Aayog today than the Planning Commission of 2010 is to the planning Commission of the 1950s. And whether planning still continues, I guess, again depends on what we mean by planning. If we mean by planning the government’s veneration of expertise, of placing technocrats on a pedestal, appropriately or not, on a pedestal even above politicians, then we certainly do not see any similarity there or any continuity there between Nehruvian planning and today. If it is, because as we know, today, intellectuals don’t quite have the same influence, or even economists don’t quite have the same influence in or over government. You know something like demonetization, which has very, very, very, very few professional economists backing it is sort of the exhibit-A for that claim. But we also know that today, the finance ministry, and the Prime Minister’s Office wield much more power than a body like the Planning Commission or the replacement for the planning commission, the Niti Aayog. Again, that is a discontinuity from the 1950s, where the planning commission was seen as being problematic precisely because of how much power it had in comparison to say the finance ministry and other more political branches of the government. But again, if planning you mean central control from New Delhi, and inadequate federalism and inadequate state powers, then that of course persists even if in a very altered form.

Parv:

Right, it’s actually the latter version of it that I meant; as in, when I meant planning, I meant planning as understood generally. So, unlike market economies, which have informational compactness, information about preferences is revealed in demand supply prices in the market, planners, on the other hand, because they lack that critical information, rely on carefully calculated, granular, in fact, astonishingly granular knowledge about production and utility functions, which again, is obtained through collecting masses of statistics, an exercise that I think continues to this day, as far as Indian government is concerned.

Nikhil:

Yeah, right, but also in very problematic ways, right, because I’m sure you’re aware of the many debates happening right now about what statistics the government of India chooses to acknowledge and chooses not to acknowledge, the meddling with some of India’s national statistics, including national sample survey, not releasing consumer expenditure data, delaying the census. So I think there’s a big debate also about, you know, even if India’s economy is more market oriented, that India still needs these statistics, to show whether India’s economy is progressing, or how well it’s doing, or how poorly it’s doing. And I think as I say, in my book the government has realized that good data is not always good politics. And so we see that there’s been a push back amongst many statisticians and economists across the board from the economic right to economic left, saying that we need much more independence with statistics. And that’s a whole debate.

Parv:

How do you organize your research, how do you retain what you consume, I am sure one continuously consumes a lot of knowledge on a daily basis to be able to come up with a book as thorough and rigorous as this and how do you break monotony? Are you reading or watching anything these days?

Nikhil:

Thank you. The process by which I organize and retain information, I am not the most organized. And so I’m always jealous of other scholars who are more organized. But I think that the way I go about it is to spend as much time as I can with the primary materials, to not go in with the overdetermined picture of what I want to argue, have some sense of the themes I want to approach but allow for the evidence to guide me. I think trying to make sure that you are scrupulous and this is, you know, a professional necessity as a historian: to be scrupulous about maintaining records of where you got information from, or, keeping records of citation information, etc. I think that the more time you spend with it, the people will come up organically with their own ways of organizing it. For me, I probably came up with methods that had a lot of inefficiencies in them quite honestly. And so I think that the longer you spend with reading you become comfortable with the material, you’ll never become fully comfortable, but you find your way to navigate the maze of documents. But of course, along with that you have to keep up with the work that other scholars are doing. And so I tried to keep up as much as I can with the scholarship of others and to try to keep, such as summaries of books and articles that I’m reading so that I have some sense of what others have argued. And I mean I am no paragon of administrative efficiency, I’m quite the opposite. And so this book is, whatever it is, despite all of my lack of efficiency and not because of it. And what do I break the monotony with? I’m, you know, a fiend for popular culture. I consume movies, television shows. I’m happy this summer to be back to reading some novels I’ve really enjoyed. So yeah, all the usual culprits that consume time but are happy with distractions. But if you’re asking me what I’m consuming right now, I’m reading a novel right now by this novelist called Rebecca Makkai, I am certainly forgetting the name of the novel. It has a long name, but it’s about a broadcaster returning to a boarding school to solve a murder that seemed to have been solved decades ago. I just finished watching Dahaad, which I thought was excellent. And I am beginning a show called Kohra, which is a Punjabi show and which seems to be interesting so far.

Parv:

Nikhil thanks for agreeing to record this. It was delightful to finally sit down and discuss this with you. Thank you very much.

Nikhil:

Thank you so much, Parv. I really appreciate you taking the time to read my book and to spend this time engaging with it.