interview
The Minute of Dissent
2019
Summary
The speakers recount how economist B.R. Shenoy coined the phrase "licence permit quota Raj," later popularised by Rajaji, and served on the Planning Commission with a reputation for independence and integrity that won him the presidency of the Indian Economic Association. They recall his 1958 Minute of Dissent against the Second Five Year Plan, arguing that with limited funds India should invest in light industry and agriculture, which generated far more jobs per unit of investment, rather than the Soviet-style heavy industry the government chose.
Though the dissent reads mildly today, it was radical and courageous when Nehru's prestige was at its zenith and opposing him was almost unthinkable. Shenoy resigned and the committee was reconstituted without him, but his stand signalled to the outside world that India's path was not unanimously endorsed. The speakers relay an account, heard through the Forum of Free Enterprise, of Shenoy refusing an emissary's request to withdraw the note, and reflect on an era when people disagreed without being disagreeable. They note Shenoy was defeated in his time but vindicated by the 1991 reforms, which he did not live to see, having died around 1978.
Key points
- B.R. Shenoy originated the phrase 'licence permit quota Raj,' later used by Rajaji and others.
- Shenoy served on the Planning Commission and became President of the Indian Economic Association, respected for his independence and integrity.
- He argued a given investment yields ten jobs in heavy industry, a hundred in light industry, and a thousand in agriculture.
- He concluded India's scarce funds should go to light industry and agriculture rather than heavy industry.
- His Minute of Dissent opposed the Second Five Year Plan's turn to the Soviet heavy-industry model.
- The dissent was radical and courageous at a time when Nehru's prestige made opposition almost unthinkable.
- Shenoy resigned and the committee was reconstituted without him, but signalled to the world that India's path was not unanimous.
- Defeated in his time, Shenoy was vindicated by the 1991 reforms, which he did not live to see, having died around 1978.
Transcript
The Minute of Dissent
Source: https://www.youtube.com/watch?v=23wPEvn1puU Duration: 245.7s
Speaker 1 (00:00): In fact, that very phrase you mentioned, license permit quota Raj, actually originated with him and then it was used by Rajaji Chakravarti Rajagopalachari and others and so people use it without knowing where it came from but he was the originator. He was on the Planning Commission and well he was a respected economist. He became President of the Indian Economic Association because even if people did not like him, they recognized this independence and integrity
Speaker 2 (00:50): which was good for the profession. As a child I remember, this would have been 50, I must have been quite small, minute of descent. We didn’t quite know what it was but we knew it was important. And later on I found out that the import was very sensible. Namely,
Speaker 1 (01:14): as he used to write, a certain amount of investment would generate 10 jobs in heavy industry, a hundred jobs in light industry and a thousand jobs in agriculture. So what do you invest in since you have very limited funds? Nowadays we would call it a no-brainer. You
Speaker 2 (01:32): would invest in light industry and in agriculture. But in those days this was shockingly radical. And so when the government decided to go on with the second plan, I think, to turn to the Soviet model of heavy industry, he wrote this Minute of Descent. And reading it now, it’s quite mild. But in those days, it was radical and it was courageous because Pandit Jawala Nehru’s prestige was really at its zenith and nobody thought of opposing him. So then of course he resigned
Speaker 1 (02:19): and then it was reconstituted without Bihar Shanoi. But yeah, it had an important impact
Speaker 2 (02:29): because the outside world also realized that no, it is not unanimous within India to follow this particular path. And I heard from a senior person in the Forum of Free Interprice about the background to this, that apparently the Prime Minister sent some emissary to
Speaker 1 (02:52): B.R. Shwanoy and he replied something like, tell Panditji, I will not withdraw the merit.
Speaker 2 (03:01): This also tells you of the atmosphere at the time that even when people disagreed, they were not disagreeable and they respected each other. And unfortunately that is in short supply right now. But it was an honorable intellectual debate
Speaker 1 (03:19): in those times and BRS was defeated in the earlier years. But he won in the end in 1991,
Speaker 2 (03:27): but unfortunately he did not live to see it, having passed away around 1978.
Speaker (03:35): Thank you.
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