Second Plan Insights

I read the insightful article by Nasir Tyabji, “Private Industry and the Second Five-Year Plan: The Mundhra Episode as Exemplar of Capitalist Myopia” (EPW, 7 August), with great interest. I had to read it three times to fully grasp the history outlined in this article and its implications because many of the names mentioned do not feature that frequently in current write-ups on economic history. People from TTK (T T Krishnamachari) to D R Gadgil are rarely mentioned in reviewing the policies of the Nehru period. For example, in a recent book review published in EPW (“Trajectory of a Life in Political Eco nomy”, 24 July), Deena Khatkhate does not mention these important people related to the policymaking in India during the Second Plan period, which he criticises.

Tyabji’s article shows the sequence of events in India’s political economy before, during and after the implementation of the Second Five-Year Plan which eventually led to the nationalisation of (big) banks in India in 1969. Since this article ends with bank nationalisation, it does not leave any space for discussing nationalisation in further details. It is, however, convincing enough to me why, later on, Indira Gandhi had to opt for nationalisation to generate funds for poverty alleviation. Many later thinkers in India have forgotten the fact that the Indian government nationalised only a few big banks, and numerous small banks and cooperatives were left to function in the private sector. The oligopolistic manipulators of the masses and the media always complained about nationalisation, as if the Indian government was nationalising the entire banking sector, like China and the former Soviet Union!