Planning Democracy

On August 15, 2014, on the sixty-eighth anniversary of India's independence, Prime Minister Narendra Modi dismantled the Planning Commission, an institution that had existed since 1950. It was replaced with a new organization, the National Institution for Transforming India (NITI Aayog). However, unlike its predecessor, which had wielded vast powers to direct the allocation of governmental resources to various parts of India's economy on a five-year basis, the new entity would mostly serve as an in-house socioeconomic research organization for the government.The dismantling of the Planning Commission was fraught with considerable political significance. It was a self-conscious move on the part of Modi's government to distance itself from India's historic commitment to the planning process—one that harked back to the era of the country's first prime minister, Jawaharlal Nehru. Simultaneously, it also signaled an end to what remained of India's socialist proclivities—yet another Nehruvian legacy.Since the early 1990s, following the Cold War's end and an unprecedented fiscal crisis in 1991, India had started to move away from its original commitment to state-led economic growth and industrialization. Instead, it had started to fitfully embrace market-oriented reforms. Nevertheless, this venerable institution, the Planning Commission, had survived.Despite the Planning Commission's long existence, there are few academic accounts of its provenance and evolution. Scholars, most notably the British political scientist A. H. Hanson, in his 1966 book The Process of Planning,1 had sought to explain the enterprise, placing it in its wider political context. Later, two eminent economists, Jagdish Bhagwati and Padma Desai, in 1970 had published Planning for Industrialization,2 a very thoughtful, if scathing, critique of the shortcomings of Indian planning. Finally, in 1972 another political scientist, Baldev Raj Nayar, published The Modernization Imperative and Indian Planning.3 In this work, Nayar had argued that the planning enterprise involved more than economic development and was instead integral to the forging of the modern Indian state.Given the paucity of a definitive account of the origins of the Indian Planning Commission, Nikhil Menon's book Planning Democracy more than adequately addresses an important lacuna in the extant literature on the subject. Menon's book, based on substantial archival research, displays an extraordinary grasp of the sociopolitical milieu within which the organization had its origins. It also highlights the Herculean role that a talented Indian physicist and statistician, P. C. Mahalanobis, played in the genesis of the organization.Apart from his statistical prowess, Menon demonstrates that Mahalanobis was a deft political operative and a dedicated institution builder. From the outset, with his interest in and knowledge of conducting sample surveys, he succeeded in persuading Prime Minister Nehru of the importance of reliable and valid data on the country's economic status. This was no mere academic concern—after nearly two centuries of British colonial rule the country lay utterly impoverished. Yet, there was little or no systematic knowledge about its economic conditions. Nehru, who was passionately committed to promoting economic development, was also enamored of what he saw as the success of the Soviet planning process. Menon shows that, given these inclinations, the two stalwarts quickly found common cause.Over a decade before independence in 1947, the Indian Statistical Institute (ISI) had formed a learned society. However, at Mahalanobis's initiative, after independence it moved to a suburb of Calcutta (now Kolkata). Shortly after the creation of the Planning Commission, the ISI took on the monumental task of formulating and implementing the National Sample Survey (NSS), designed to ascertain the economic status of households across the country. Menon, with consummate skill, describes how this enterprise was undertaken while also underscoring the intellectual differences that arose between Mahalanobis, a physicist and statistician, and Dhananjay Gadgil, an economist who was tasked with the development of a formula for disbursing funds from the central (national) government to the states. These differences aside, the NSS, both during and after Mahalanobis's tenure, became an extraordinarily sophisticated survey instrument providing a remarkably accurate account of prevailing economic conditions.Menon also describes in granular detail the heroic lengths to which Mahalanobis and his colleagues had to go to acquire even the most rudimentary computing facilities for the use of the ISI and the commission. India, in the 1950s, was acutely starved of foreign exchange, and the best computer technology was available only from the United States. Both considerations of cost and Cold War concerns about transferring technology to India, a country friendly toward the Soviet Union, often thwarted Mahalanobis's relentless efforts.Despite these hurdles, his dogged persistence enabled the ISI to acquire the requisite technological wherewithal. It also attracted considerable talent from India and across the world. Given his intellectual stature, as well as inexorable personal drive, the Planning Commission, with the ISI as its intellectual backbone, for over a decade played an outsized role in India's developmental project. However, the status of the latter, Menon shows, would undergo a decline from the late 1960s owing to both exigent circumstances, such as a critical foreign exchange crisis, and the roles of political leadership and personality conflicts.In later decades, while the commission still remained a standing entity, the ebbs and flows of national politics affected its ability to shape economic policy. Today, following its abolition, even the NSS is now at risk, as the Modi government has been reluctant to release data that could depict the results of its economic policies in an adverse light. Given the immense effort that Mahalanobis and his colleagues had invested in forging a world-class survey, it is lamentable that the crass considerations of electoral politics are now undermining an extraordinary legacy

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