Lecture 1

Abstract

This chapter draws a distinction between the intrinsic and instrumental values of India's development. It argues that since long before independence, there was a consensus on the intrinsic overarching objective of development of India among the polity and society — the eradication of mass poverty within a reasonable time horizon. The chapter identifies accelerating growth, ensuring its appropriate distribution and sustainability, and reforms as instruments for achieving this intrinsic objective. It focuses on the period of the ‘Hindu Rate of Growth’ from 1950–1 to 1979–80, when the infamous License-Permit-Raj was in full sway. It covers the Industrial Policy Resolution of 1956 and the 1970s when many draconian laws, such as the Industrial Disputes Act (IDA) and its amendment, Monopolies and Restrictive Trade Practices (MRTP) Act, Foreign Exchange Regulation Act (FERA), and Conservation of Foreign Exchange and Prevention of Smuggling Act (COFEPOSA) were enacted. It also discusses the severe macroeconomic and balance of payments crisis of 1966 and economic liberalization of 1966–8.