A Job-Oriented Fifth Five-Year Plan

Summary

J. M. Lobo Prabhu, a retired ICS officer, economist, and former Member of Parliament, argues in this 1972 Forum of Free Enterprise pamphlet that India’s forthcoming Fifth Five-Year Plan will fail unless it reorients itself around full employment as the primary goal rather than treating employment as a by-product of aggregate development. He opens with the stark observation that the Plan must offer work to five million registered unemployed and many times that number in rural areas — including 80 million agricultural workers with only five months of employment per year — and warns that persisting with the existing approach will produce nothing more than another five-year collection of budgets providing restrictions rather than resources.

The bulk of the essay advances a series of institutional and sectoral proposals. On institutional design, Lobo Prabhu calls for a Bureau of Agricultural Costs and Prices to set rational floor prices, a Bureau of Wages and Fees to anchor all wages to a minimum pegged at 25 per cent below current market rates, a Bureau of Construction Rates and Costs to stabilise the building sector, and anti-corruption vigilance committees at every district level. He argues that the Joint Sector — with mandatory minimum public dividends and up to 49 per cent private participation — should replace both purely private and purely public enterprise, partly as an anti-inflation device. For agriculture, he proposes 16.6 million hectares of idle land development, a Land Development Corporation, expanded minor irrigation funded without additional Plan allocation, and crop insurance for small farmers. For industry, he indicts the Planning Commission for ignoring data showing that a crore of rupees invested in agriculture yields employment for 4,000 people while heavy industry yields only 500, and calls for an end to the sheltered market conditions and labour regulations that make Indian industry uncompetitive.

On trade, he is sharply critical of the State Trading Corporation, arguing that its import monopoly insulates domestic prices from international competition and suppresses export competitiveness, as illustrated by steel pipes and tubes selling abroad at Rs. 915 per tonne while the internal price was Rs. 2,162. For transport and communications, education, and health, he offers detailed Plan-allocation critiques, advocating Railway conversion to the joint sector, a Kerala-style shift-system in schools to absorb illiterates, and a frank assessment that Family Planning expenditure (Rs. 437 crores) has failed. The essay closes with a finance section arguing that an employment-oriented plan need add only Rs. 5,000 crores to the Fourth Plan baseline and that the Planning Commission’s Rs. 30,000 crore total would be dangerously inflationary.

Key points

• The central argument is that employment must be the primary goal of the Fifth Plan, not a by-product: ‘Development being a product of full employment’ rather than employment being a by-product of development.

• Four new institutional bureaux are proposed: Agricultural Costs and Prices, Wages and Fees (with a minimum wage 25 per cent below current wages), Construction Rates and Costs, and Industrial Costs and Prices — all intended to introduce transparency and curb inflation.

• The Joint Sector model — combining public minimum dividends with up to 49 per cent private participation — is presented as the solution to both the inefficiency of state enterprises and the anti-social tendencies of purely private capital.

• Lobo Prabhu marshals productivity-per-rupee figures from Prof. Mahalanobis to show that agriculture and roads create far more employment per crore of investment than heavy industry, and criticises the Planning Commission for ignoring these ratios.

• The State Trading Corporation and Cotton Corporation are singled out for practices that raise internal prices, suppress exports, and enrich intermediaries at the expense of producers and consumers.

• 16.6 million hectares of idle and waste land are identified as developable for agriculture, and the Maharashtra Government’s Standing Offer of Work programme is held up as a constitutional model the Fifth Plan should generalise.

• The total Plan outlay proposed by the Commission (Rs. 30,000 crores) is condemned as inflationary; Lobo Prabhu argues the employment objectives can be met by adding only Rs. 5,000 crores to the Fourth Plan baseline.