A Forerunner of Economic Reform

Not many seem to know that Shastri tried to decentralise governance by moving decision-making on projects from the Planning Commission to the ministries dealing with economic subjects. Indeed, there was an attempt to reduce the dominance of the Planning Commission by the setting up of a national planning council. In 1965, Shastri announced in Parliament that there would be a reconsideration of government controls over the economic activities; consequently, there was a relaxation in regulations for some sectors, such as steel and cement. Shastri’s economic team comprised people like L.K. Jha, I.G. Patel, Dharma Vira and S. Bhoothalingam who were tilted towards reforming the economy through modernising agriculture and allowing more private sector freedom. Even the decision to devalue the rupee was taken in principle by Shastri though the actual step was implemented by Indira Gandhi. Unfortunately, Shastri died before effective steps could be taken in all the fields. If he had lived longer, it is possible, as P.N. Dhar says, that Shastri might have pursued “an agenda of economic reform of the kind that was taken up only twenty-five years later” (under the prime ministership of Narasimha Rao).

The slogan that he gave India during the war with Pakistan aptly reflected his view: “Jai Jawan Jai Kisan” showed Shastri’s firm belief that the security of the nation upheld by the soldier was closely linked with food security,

Views

He (Shastri) wore no ideological blinkers; he saw facts as they were in all their starkness. Chronic food shortages made him sift from basic industries to agriculture. Roaring black markets persuaded him to make relative shift from controls to incentives, and the glaring inefficiency of the public sector made him accept a larger role for the private sector and foreign investment. He also took measures to shift the locus of economic decision- making from the Planning Commission to the ministries and from the Centre to the states.

P.N. Dhar

food production that was the farmer’s forte. The slogan implied that the farmers’ work on the field was equivalent to the soldier’s action on the battlefield in the service of the nation.

The Seeds of Green Revolution and White Revolution India faced a food shortage and things were in a bad shape when Shastri drew in C. Subramaniam as his food and agriculture minister. Shastri gave full support to his minister in laying the foundations of the Green Revolution, although it was Indira Gandhi who is usually given the credit, as the gains of the new methods came to be seen only after about a decade. But in fact, it was the result of Shastri’s initiatives to transform Indian agriculture.

The Green Revolution involved a threefold thrust– technological, economic and organisational. The Indian Council of Agricultural Research was reorganised and, for the first time, a scientist, Dr B.P. Pal, was appointed as its head. M.S. Swaminathan of the Indian Agricultural Research Institute brought the government to an awareness of the new high- yielding wheat varieties developed by Norman Borlaug’s team in Mexico and how India must launch field demonstrations. In the face of opposition from various quarters, including the Congress party, Shastri approved the import of 250 tonnes of wheat seeds in 1965. Later in 1966 some many thousands of tonnes were to be imported. And the Green Revolution in wheat was set in motion, as Indian scientists improved upon these varieties. In November 1965, when C.S. Subramaniam and Orville Freeman, the US agriculture secretary, met in Rome, they signed an accord that put on paper what had already been launched with the support of Shastri. As per the accord, India was committed to end imports of food grains by 1971 by investing more in agriculture, irrigation, research, seeds, fertilisers and put in place suitable economic and marketing policies. The Americans, for their part, agreed to send more wheat to India in 1965 and 1966.

Incentives to support the new technology were also put

in place. The Agricultural Prices Commission (APC) and the Food Corporation of India (FCI) came into being in January 1965. The National Seeds Corporation and the Central Warehousing Corporation were also set up around this time.

Shastri was also instrumental in setting in motion the White Revolution – a national campaign to raise the production and supply of milk. On his visit to Anand in Gujarat in October 1964 to inaugurate the Cattle Feed Factory of Amul at Kanjari, he was impressed by the milk cooperative. He wished that Verghese Kurien, who was the General Manager of Kaira District Co-operative Milk Producers’ Union Ltd (Amul) at the time, would help in creating such cooperatives in other parts of the country so as to improve the conditions of farmers. The National Dairy Development Board (NDDB) was established, as a consequence, at Anand in 1965.