The Untold Story of the Bombay Plan: India's Economic Blueprint of 1945

Back in 1945, 2 years before our independence, sir JRD Tata Ghanshyam Das Birla, Ardeshir Dalal Lala Shri Ram, Kashtoor Bai Lalbai

Ardeshir Darabshaw Shroff, Sir Purushotam Das Takur Das, and John Mattai. These people were some great industrialists of that time, who together prepared a brief memorandum outing a plan of economic development for India. And presented this to our first Prime minister after independence, Shree Jawahar Lal Nehru.

This Bombay plan was never implemented but according to many people, if this place would have got implemented then Our country would have industrialized a long back. The capitalist ideology that India has adopted now would have been adopted a long back.

There would have been major changes in the incomes of farmers and the lifestyles of Indian citizens. But this plan was neither officially accepted nor officially rejected. This plan was hanging in the center. But if you are wondering what were the main goals of this plan then

We are gonna discuss that in this video. -Music- Around the mid of 1940s, it was clear that world war 2 was over.

Which caused the UK to lose its wealth and inturn raised the chances of our freedom. It was sure that we would have obtained our independence, the problem that this the situation arose was that the industrialists in the British cannot function properly.

And the major issue was regarding the industrial imports. Many industrial products which can be easily made in India were being imported from other countries. And since world war 2 global income was devasted hence the imported goods were too expensive.

This is why some major industrial personalities wanted the industrial products to be made in India. And they also wanted to strengthen the agriculture stature of that time. Few of the social reformers were also included here to make the life of common class people better.

The basic goals of this plan were To increase the industrial output up to 5 times. And to increase the agricultural output up to 2 times.

For which the government along with some private entities would invest 100 billion rupees which would be 72 billion pounds or 18 billion dollars at that time. This plan is big at this time too so during that time you can easily imagine how big this plan was. Let's discuss about the after-effects of this plan's submission, when this plan was

Submitted to the first government formed then this plan was not approved. But some parts of this plan were implemented in the Panchasheela plan. Let me explain what this 5 years plan is, after the independence our country was

Not poor than UK or USA but it was very weak in comparison to Russia's economy. And since USSR was a socialist-communist country many sectors were handled by the government And a special kind of administrative technique was in use called the 5 years plan.

In this 5 years plan the government used to set goals that had to be reached in the 5-year duration. This plan was implemented right after our independence and included some fragments of the Bombay plan. but the major parts were ignored. And the fragments that were implemented gave more negative outcomes than positive outcomes.

Let's understand what this is. According to the Bombay plan the industries we're supposed to grow but the The government was scared of letting the indigenous companies to lose the market.

And they did not want the free market economy to be created here. The government has run into deficit finance which means it had to invest more money than the budget they had at that time. In simpler words when the government does not have enough money for its functioning then they issue equivalent bonds.

And the printing of new notes during the return of these bonds. You might have heard that US and Japan has more debt than its economy. And this was what would have happened if they approved the plan which would have bought India a huge debt.

This was pretty much a protective step that resulted in not approving this Bombay plan. Let's know the fragments that were included in the 5 years plan. In the Bombay plan, more importance was given to the participation of the state government.

The heavy industries were supposed to run in mixed economy models. The government rather created governmental companies in important sectors. Which could work with the private industries and therefore result in their fast growth.

But what actually happened was that the government created a lot of PSUs but private bodies' participation was low. Divergence majorly occurred in human development and social levels. Visionaries within this Bombay plan strived to make this the plan affects the working class and farming class's lives.

Since there was not much differentiation between the colors so we can consider the social standings This plan was meant to make these people on the lowest social level better. But the measures which ensured the benefits of this class of people were not implemented in the 5 years plan.

The national planning commission of that time never recognized the 5-year plan even after the implementation. And one more reason why this plan was not brought to use was undoubtedly politics. Around the 1950s communalism had huge influence within our country.

And these communal bodies did not like the idea of letting private companies set up industries. If the government had approved this plan then this would have significantly affected the vote banks. Corporate agriculture and human development also contradicted communalist ideology.

Hence the opposition was exhibited publicly. Not all parts of this plan were clear, criticism for many segments of this plan was valid. This plan did not provide direct advocacy for socialization instead, there were mentions for all.

There were possibilities that this for all could lead for the benefit of the upper-class people. And right after the war, there was anti-property moment and anti-Collison moment. Which was actually right since the country was adversely affected by many private company owners.

So the private companies which had already caused so much loss to the country had no standing to work here again. And according to the people in the far left of our country believed that the creators of this plan were mostly capitalists' hence This plan will not stay beneficial for only common people in a long run.

Many economists were also included here who gave reasons base d on technical terms such as fast-growing capital will lead to Inflation in the country's economy and thus resulting in a raising in prices. And this plan did not explain the source of the additional capital within the Indian economy.

This led to the build-up of opposition towards the Bombay plan. And guys it was told that if this plan would have been executed then the rate of industrialization in India would be high. The development would have been from modern standards.

And the agricultural output that was increased in the 60s-70s could have increased in 50s. The service sector was formed after the acceptance of capitalism could have been formed during the 60-the 70s itself. But they were created in the late 90s and the private companies which were capable couldn't execute anything on a huge scale.

We cannot be sure about what would have happened as this plan was never implemented. This was one of the plans that were made to shine but never once came into light. I hope this video was fascinating as the the topic of this video was a little different.

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