attention to the strategy of growth with equity and the issues of concentration
and distribution in industry and agriculture, while giving priority to rapid
growth. But, in both these respects his policies were not altogether
successful. In the rural sector he received Panchayat Raj with a view to
growth from the grassroots level, but here again his bold initiatives failed to
involve people as full participants in developmental activity .
    Unfortunately, these processes involved the setting up of an elaborate and
complicated system of controls and industrial licenses. As a result of the
import substitution industrialisation strategy, with heavy protection given to
indigenous industries, certain structural features developed over the years that
led to inefficiency and technological backwardness. The large public sector
controlling ‘the commanding heights of the economy’ began to be charged as
the major source of industrial inefficiency. The acute shortage of foreign
exchange in 1956-57 led to the imposition of stringent import and foreign
exchange controls. In Bipan Chandra’s words: “The seeds of a Kafkaesque
web of license quota rules and regulations were thus laid and in later years it
was found that it was not easy to dismantle a system that had acquired a
vicious stranglehold over the Indian economy. The bureaucracy-politician
nexus and certain sections of business that were beneficiaries of the system
resisted such a change.”
PLANNING AND STATE-CONTROLLED
INDUSTRIALISATION
Background of Planning and First Plan
The central concern in the beginning was to articulate and determine a broad
framework for planned development, on behalf of the independent nation that
had come into being on August 15, 1947, while putting into place the
necessary situations and structures consistent with such a broad framework.
The quest for such a framework had begun much earlier and the formation of
a national planning committee was a serious early venture in this regard. A
planning committee of 15 eminent men, drawn from different walks of life
and led by Jawaharlal Nehru as