vol tion o the ndian onom 3.9
this stage, to be utilised for investment along new private sector in the economy. In a sense, India was
lines rather than in acquisition of existing productive increasingly getting more dependent on the latter
capacity. Public ownership of the means of production for the promotion of growth and development.
may be necessary in certain cases; public regulation By early 2015, we saw some major changes
and control in certain others. The private sector has, taking place in the area of planning in India.
however, to continue to play an important part in The Government replaced the existing body,
production as well as in distribution. Planning under Planning Commission, with the NITI Aayog (a
recent conditions thus means, in practice, an economy new economic ‘Think Tank’), with the aim of
guided and directed by the state and operated partly ‘overhauling’ the very process and method of
through direct state action and partly through private
planning in the country. This move is believed to
initiative and effort.”18 the above-quoted lines are
originate out of India’s experiences of development
imaginatively ahead of the times. It will be suitable
planning spanning over six decades. Co-operative
to note here that as 1950s and 1960s made the
federalism, bottom-up approach, holistic and
world experts favour state intervention in the
inclusive development with the need of an Indian
economy, the East Asian Miracle19 of the coming
model of development are some of the hallmarks
three decades was going to define the very limits
of such an intervention. The East Asian economies of the new design. The move is also seen in light
were able to sustain a high growth rate over three of the changed needs of the economy.
decades and had revived again the discussions
regarding the respective roles of the state and the emPhasis on The PuBlic secTor
market as well as the nature of the state’s role in The state was to be given an active and dominant
the economy. The kind of conclusions drawn were
role in the economy, it was very much decided by
very similar to the view presented in India’s First
the time India became independent. There were
Plan itself which was presented by the World
no doubts about it in the minds of the people who
Bank in 1993.
formed the dominant political force at the time.
The real nature of the Indian brand of mixed Naturally, there was going to be a giant structure
economy, though beautifully outlined in 1951 of the government-controlled enterprises to be
itself, went through a process of detailed evolution
known as the public sector undertakings (PSUs).
in the decade of the 1950s.20 By the end of the
Criticism aside, there were at that time, a strong
1950s, the concept of the mixed economy was
logic behind the glorification of PSUs. Some of the
almost buried and rose from hibernation only by
reasons for heavy investments in the PSUs were
mid-1980s and finally early in 1990s, in the wake
purely natural while others were consequential in
of the process of economic reforms.
nature. There were certain highly commendable
We see the government modifying the
objectives set for them, some other goals would go
process of planning and functions of the Planning
on to serve the very soul of the mixed economy.
Commission in wake of the reform process—an
We must go for an impartial and rational analysis
attempt to redefine the roles of government and
of the matter, in the midst of all the criticism of
18. Planning Commission, The First Five Year Plan: A PSUs and the contemporary moves of privatising
Draft Outline, GoI, New Delhi, 1951. them, to understand their roles in the Indian
19. The East Asian Miracle, World Bank, Washington
D.C, 1993.
economy. We may understand the reasons behind
20. We see the process of evolution specially in the the ambitious expansion of the PSUs in the face of
industrial policies, India pursued since 1948 to 1956. the following major requirements.