“Nowhere in the developing world, in no colonized nation, is there a parallel to the Bombay Plan. Native business leaders were seeking their place in the sun, battling colonial rule from Asia to Africa, from Latin America to Eastern Europe. The inter-war years of the twentieth century witnessed many anti-colonial and anti-imperialist movements. Nationalism was on the rise and was a pervasive sentiment. Patriotic leaders and nation builders were dreaming of a new era of self-reliant economic development. India was not the only country battling for freedom. Yet, it was in India that a group of business leaders, among the most successful business leaders of their time, came together to write a manifesto for development that had no parallels...

The Bombay Plan was one such effort. Indian business leaders showed remarkable understanding of the necessary role of the government in promoting industrial development in a postcolonial situation. More importantly, they understood the importance of public investment in health, education and social development and looked for ways to fund it. In purely Marxian terms, the Bombay Plan could be described as a manifesto of ‘State Capitalism’. It was a manifesto of a social class that signalled its evolution from being a ‘class in itself’ to becoming a ‘class for itself’.

State capitalist manifesto

What made the ‘Bombay Plan’ unique in the decolonizing world of the mid-twentieth century was the fact that it was a document written by business leaders but with a focus on national development — both economic and social. It was not a set of demands made by businessmen to a government. It was not merely a statement on industrial policy. It was not a pre-budget memorandum. It was a national plan for long-term economic and social development sought by the leadership of indigenous business in their own interest as well as in the national interest.

The Bombay Plan was written against the background of ongoing discussions on post-war economic policy, including the discussions at the NPC. There was a Gandhian Plan written by the Mahatma’s more dogmatic disciples, there was Jayaprakash Narayan’s Sarvodaya Plan, and radical humanist MN Roy’s Peoples’ Plan. Each document presented a perspective on the kind of economic and social policies that independent India ought to pursue.

What set the Bombay Plan apart from all other contemporary exercises was its focus on specifics. In opting to look at numbers and fiscal implications of their proposals, the Bombay Plan went beyond the largely political manifestos of the day, written by Congressmen, communists, Gandhians and an assortment of nationalist groups.

There is one more feature of the Bombay Plan that set it apart from other contending vision statements of the times. Here was a document being written by India’s biggest business leaders seeking policies for rapid industrialization and yet it devoted considerable space to a discussion of the foundational role of public investment in education and public health as well as the importance of a progressive tax policy that would address distributional concerns even as the focus remained on rapid enhancement of production. ‘The ultimate objective of any planning’, asserted the authors, ‘should be to increase the volume of India’s economic production.’ Yet, they admitted that this search for growth in output must ensure that enough is provided in terms of food, clothing, housing and healthcare for all. The Plan explained what it defined as the ‘the minimum requirements of human life.’

These pertained to nutrition, literacy, sanitation and housing. The detailed discussion of the requirements of education and public health was way ahead of its time. An important criticism of economic policymaking in the late 1980s and early 1990s has been the overemphasis on economic growth and relative neglect of social and human development.

Clearly, the Bombay Plan authors were more mindful of the distributional dimensions to growth than India’s more recent policy planners. Not surprisingly, therefore, and also reflecting the dominant liberal thinking of the mid-twentieth century, the Bombay Plan authors declared, ‘A planned economy must aim at raising the national income to such a level that after meeting the minimum requirements every individual would be left with enough resources for enjoyment of life and for cultural activities.’...

Finally, the authors of the Bombay Plan were keen that decolonization should facilitate the integration of a subcontinental market, thereby creating the economic space for the consolidation and growth of a nascent, indigenous capitalist class. In the very opening paragraph of the document the authors state, ‘The maintenance of the economic unity of India being, in our view, an essential condition of any economic planning we have assumed for the purpose of our Plan that the future government of India will be constituted on a federal basis and that the jurisdiction of the central government in economic matters will extend over the whole of India.’

It took seven decades after that for a nationwide Goods and Services Tax (GST) to be finally introduced, integrating the home Market. The significance of the Bombay Plan does not derive only from its uniqueness as a manifesto of a nascent capitalist class in a post-colonial developing economy, nor merely from the breadth of policy vision of its authors, but from the fact that it became the basis for national economic policy after India attained independence, sidelining all the other contending visions, namely, the Gandhian Plan, the Peoples’ Plan and so on. The first Five Year Plan and the second Five Year Plan were constructed on the policy foundations offered by the Bombay Plan.”

Extracted from the essay ‘Business, Government And Politics: From Plan To Plea’ by Sanjaya Baru. With permission from Rupa Publications

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