Basic Principles of Planning

Summary

J. H. Doshi, then President of the Forum of Free Enterprise, delivered this address to the Forum’s 22nd Annual General Meeting in Bombay on 18 September 1978 — roughly eighteen months after the 1977 ballot-box defeat of the Emergency-era Congress government. He opens by acknowledging that the new government has rightly shifted economic priorities (towards agriculture and rural development, towards employment-intensive technology, towards small and cottage industries, and towards decontrol of food zones and sugar), but argues that growth has nevertheless stalled because the Government has failed to grasp “the basic principles of planning, viz., strict priorities and its own limitations as an instrument.” The state, he insists, possesses coercive power but is not omniscient; when it spreads itself thin over too many objectives, it wastes resources mobilised from “some of the poorest people in the world.”

Doshi’s positive prescription is a sharply truncated state focused on a small set of irreducible public goods: defence, law and order, an efficient judicial system, and physical infrastructure — irrigation, flood control, rural roads, drinking water, primary education, and rural marketing. He devotes substantial space to land and water mismanagement, quoting at length from B. B. Vohra’s Indian Express piece of 11 September 1978 on deforestation, soil erosion, water-logging and the absence of basic field-level irrigation works, to argue that India’s recurrent floods and famines are “virtually manmade.” He attacks the Government’s reflex of running bakeries and bus services while neglecting these basic duties.

On industrial policy he defends large business houses against the “monopoly” label (the only true monopolies, he notes, are in the state sector), warns against artificially favouring small units without marketing support, and rejects the campaign against business families on the grounds that family-run firms also incubate professional managerial talent. He calls for the Government to sell 49% of its public-sector shareholdings to employees and the public, list them on stock exchanges, strip public-sector units of their monopoly character, and subject them to competition — and applauds the recent removal of the 10% public-sector price advantage. Two printed pages (10–11) covering, by inference, state-government finances and centre–state fiscal relations are missing from the scanned booklet; the rendered text resumes on printed page 12 with a closing passage attacking octroi as “the most obnoxious form of taxation” and warning that the real constraint is not mobilisation of resources but their proper utilisation. The address ends with an urgent appeal: “Our scarcest resource today is time. It is running out. So is the patience of the people.”

Key points

• Frames the 1977 general election as a ‘ballot box revolution’ for Rule of Law, basic freedoms and relief from poverty after 30 years of independence.

• Concedes that the post-Emergency Government has rightly reoriented investment towards agriculture, employment-generation, small and cottage industries, and decontrol — but argues implementation has been faulty and bureaucratic ‘deadwood’ has not been cleared.

• Central thesis: the state is coercive but not omniscient, so planning must observe strict priorities — defence, law and order, judicial efficiency, irrigation, flood control, roads, drinking water, primary education, rural marketing — and stop spreading itself thin over low-priority items like ‘making of bread, beverages, running buses’.

• Quotes B. B. Vohra (Indian Express, 11 September 1978) at length: 90 million hectares suffering water erosion, 50 million from wind erosion, 20 million susceptible to flooding, 10 million canal-irrigated hectares producing at fractional capacity — making 60% of the land surface in urgent need of attention.

• Defends ‘big business’ as pygmies by international standards, rejects the ‘monopoly houses’ label (true monopolies sit in the state sector), and warns that the campaign against business families curbs the rare entrepreneurial spirit needed for growth.

• Proposes selling 49% of Public Sector shareholdings to employees and the public, listing them on stock exchanges, ending PSU monopoly status, and subjecting them to competition; welcomes the removal of the 10% PSU price advantage.

• Identifies octroi as ‘the most obnoxious form of taxation’ and a marker of politicians’ lack of seriousness about economic development.

• Closes by reframing the development question as one of utilisation rather than mobilisation: ‘Our scarcest resource today is time. It is running out. So is the patience of the people.’