3.6. The First Five Year Plan

The First Five Year Plan (1951–1956) sought to get the country’s economy out of the cycle of poverty. K.N. Raj, a young economist involved in drafting the plan, argued that India should ‘hasten slowly’ for the first two decades as a fast rate of development might endanger democracy.

The First Five Year Plan aimed to improve India's economy and lift it out of poverty, which had been a significant issue post-Independence. K.N. Raj suggested a cautious approach to development. He believed that rushing into rapid growth could threaten India's developing democracy. This caution was rooted in the understanding that quick changes could lead to instability.

Think of a young tree growing in a garden. If you water it every day and give it enough sunlight, it will grow strong and tall. But if you try to stretch and bend it too fast, it might break or uproot. Similarly, India needed to grow slowly and steadily to ensure its democratic foundations remained intact.

The First Five Year Plan addressed mainly the agrarian sector including investment in dams and irrigation. Agricultural sector was hit hardest by Partition and needed urgent attention. Huge allocations were made for large-scale projects like the Bhakhra Nangal Dam. The Plan identified the pattern of land distribution in the country as the principal obstacle in the way of agricultural growth. It focused on land reforms as the key to the country’s development.

Recognizing the unrest in the agricultural sector due to the Partition of India, the First Five Year Plan prioritized agricultural development. Investments were made in infrastructure such as dams and irrigation systems to boost farming. The planners identified unequal land distribution as a significant barrier to growth, thus focusing on land reforms to promote fair access to land and increase agricultural productivity.

Imagine a village where one person owns all the fertile land while others have none. If the land were more evenly distributed, more farmers could grow crops, leading to more food and prosperity. The First Five Year Plan aimed to ensure that everyone had access to land, similar to giving more villagers a plot to plant their crops.

One of the basic aims of the planners was to raise the level of national income, which could be possible only if the people saved more money than they spent. As the basic level of spending was very low in the 1950s, it could not be reduced any more. So the planners sought to push savings up.

To improve national income, the planners knew they needed people to save more money. In the 1950s, the average spending was already low, so the focus shifted to encouraging savings. By promoting savings, the goal was to increase the capital available for investments in development projects, which would eventually contribute to economic growth.

Think of a piggy bank where you save some money every week. If you want to buy something big like a bicycle, you need to save enough money first instead of spending everything you have. Similarly, the government wanted people to save to build up resources for larger development projects.

It, however, had its problems as well. India was technologically backward, so it had to spend precious foreign exchange to buy technology from the global market. That apart, as industry attracted more investment than agriculture, the possibility of food shortage loomed large.

Despite the ambitious goals of the First Five Year Plan, several challenges emerged. India lacked advanced technology, resulting in dependence on foreign imports, which strained its finances. Additionally, as more resources were diverted toward industrial growth, the risk of neglecting agriculture led to fears about potential food shortages, highlighting the difficulties in balancing priorities.

Imagine you're trying to build a house but you lack the right tools. You might need to rent them or borrow money to buy them. While you're busy constructing your house, you might forget about maintaining the garden that provides you food. Similarly, India faced the challenge of managing its focus on industry while still ensuring agricultural needs were met.

Nevertheless, people’s savings did rise in the first phase of the planned process until the end of the Third Five Year Plan. But, the rise was not as spectacular as was expected at the beginning of the First Plan.

In the initial phases of the planned development, savings began to increase, which was a positive sign for the economy. However, the growth in savings did not meet the ambitious expectations set at the project's start. This indicated that while the plan had positive effects, it also revealed the slower-than-anticipated economic transformations.

Consider a student who decides to save money from their allowance to buy a new video game. Initially, the savings grow fast, but as time goes on, they end up spending some of it on snacks and outings. While they are still saving, it's not at the rate they first imagined. This reflects the reality of the economic situation during the early years of the First Five Year Plan.

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