By Rajat
Nehru presided over the introduction of a
modified, Indian version of state planning and control over the economy.
Creating the Planning commission of India, Nehru drew up the first Five-Year
Plan in 1951, which charted the government's investments in industries and
agriculture. Increasing business and income taxes, Nehru envisaged a mixed
economy in which the government would manage strategic industries such as
mining, electricity and heavy industries, serving public interest and a check
to private enterprise. Nehru pursued land redistribution and launched
programmes to build irrigation canals, dams and spread the use of fertilizers
to increase agricultural production. He also pioneered a series of community
development programs aimed at spreading diverse cottage industries and
increasing efficiency into rural India. While encouraging the construction of
large dams (which Nehru called the "new temples of India"),
irrigation works and the generation of hydroelectricity, Nehru also launched
India's programme to harness nuclear energy.
For most of Nehru's term as prime minister, India
would continue to face serious food shortages despite progress and increases in
agricultural production. Nehru's industrial policies, summarised in the
Industrial Policy Resolution of 1956, encouraged the growth of diverse
manufacturing and heavy industries, yet state planning, controls and
regulations began to impair productivity, quality and profitability. Although
the Indian economy enjoyed a steady rate of growth at 2.5% per annum (mocked by
leftist economist Raj Krishna as a "Hindu rate of growth"), chronic
unemployment amidst widespread poverty continued to plague the population.
