The development policies during the Nehru era (1950–64) were marked by a unique blend of economic planning, social transformation, and optimism, often referred to as Nehruvian Humanism rather than socialism. These policies laid the foundation for India’s transition from a stagnating colonial economy to a self-sufficient, growth-oriented nation.
Economic Growth and Structural Transformation
- Growth Performance: India’s GDP grew at around 4% during the Nehru era, a significant improvement from the colonial era’s sub-1% growth. By the early 1960s, GDP growth reached 5%, higher than the average for low- and middle-income countries (4.3%) and close to the global average (5.2%).
- Challenges to Growth: Despite the gains, growth was hindered by events like the 1962 war with China, wars with Pakistan (1965, 1971), and the political turbulence following the Congress split and the Emergency.
- Shift in Focus Post-1980s: The post-1980s saw a rise to 6% average growth, attributed to export-oriented reforms missing in Nehruvian policies, which emphasized import-substitution industrialization.
Industrialization and Public Sector Expansion
- Public Sector Dominance: Investments in public sector enterprises rose from 22.7% of GFCF in 1950-51 to 47.7% in 1960-61, focusing on steel, engineering, chemicals, oil, and infrastructure.
- Private Sector Collaboration: Contrary to critiques, private industries expanded alongside public enterprises, with their share of GFCF rising from 9.5% to 16.2% during this period.
- Policy Motivation: The focus on public investment was driven by the private sector’s limited capacity to fund large-scale projects, especially in critical sectors.
Education and Research
One of the most significant contributions of the Nehru era was the expansion of higher education and research, which set the stage for India’s later advancements in technology and innovation:
- Establishment of key institutions like the IITs, IIMs, and research centers in agriculture, atomic energy, and space science.
- Creation of commissions like the University Education Commission (1948–49) and the Kothari Commission (1964–66) to strengthen educational frameworks.
- Increased availability of skilled labor became critical for India’s rise in technology-driven growth in later decades.
Social Change and Vision for Equality
- Community Development: The First Five-Year Plan aimed to integrate economic growth with social transformation, emphasizing community development and institutional change.
- Inequality Reduction: Data from the World Inequality Database shows a decline in the wealth share of the richest 10% from 40% to 30% during this period, reflecting efforts to reduce economic disparity.
- Optimism and Unity: The era fostered a spirit of cooperation and national solidarity, exemplified by cultural icons like the song “Saathi Haath Badhana.”
Legacy and Criticism
While the Nehruvian strategy is often criticized for being overly focused on self-sufficiency and import substitution, it must be evaluated within the global context of the 1950s:
- Limited Global Trade Opportunities: Stagnant trade growth post-World War II left few export opportunities for developing nations.
- Strategic Self-Sufficiency: The policy of economic independence was a pragmatic choice in the absence of global support or robust trade networks.
Conclusion
The Nehru era was a time of foundational change, combining economic growth with social reform, emphasizing education and research, and fostering a vision of shared national progress. While not without shortcomings, the period’s legacy endures in the institutions and optimism it cultivated for a modern India. This was an era not just of planned economic development but also of humanistic aspirations for a more equitable society.