The Bombay Plan

 The Bombay Plan

(Memorandum Outlining a Plan of Economic Development for India)

 

            The Economic History of 20 the century India would not be completed without referring to an important document, rather a Vision Document called 'A Plan of Economic Development for India' which is also popularly known as 'The Bombay Plan'. It was published in 1944-45 and divided in to two parts. The contributors or writers of The Bombay Plan were the stalwarts from the world of business from different parts of India including Bombay city. They were already the estlished and reputed business leaders. The who's who from Indian business world viz. Sir Purshotamdas Thakurdas, J.R.D. Tata, G. D. Birla, Sir Ardeshir Dalal, Sir Shri Ram, Kasturbhai Lalbhai, A. D. Shroff and John Mathai were the people who penned this document in order to help government to design its economic policies in post second world war period. The writers of the Bombay Plan were assuming that after the Second World War some sort of national government would be constituted in India with a total freedom to make decisions in economic sphere of the country. Some of these businessmen were having the title of 'Sir' i.e. they were knighted by the British Monarch which shows that they were respected by the British government as well. Their contribution in the business related matters were aptly recognized by the government of the time.

        Sir Purshotamdas Thakurdas was a cotton trader and was highly respected in the government circles.

        J. R. D. Tata can be considered as the doyen of Indian business world from 20 th century. He was born in Paris on 29 July 1904. He was half Parsi and half French. His father, Ratanji Dadabhoy Tata was Parsi and first cousin of Jamshedji Tata. As most of us know, Jamshedji Tata was a premier entrepreneur from India who had started the Tata Iron and Steel Company in 1807 at Sakchi, a place in erstwhile Bihar and now it falls in Jharkhand. Around 1919, this place was renamed as Jamshedpur by Lord Chelmsford, the then Governor General of India in the honour of Jamshedji Tata. The name of J.R.D. Tara's mother was Suzanne Briere. He is considered as the first pilot of India and credited with expanding the Tata conglomerate by starting new companies such as Tata Consultancy Services, Tata Motors, Tata Salt, Voltas, other ventures. He was given the 'Legion of Honour', the highest Award of France. This Award was constituted long back by the legendary French Emperor and Warrior, Napoleon Bonaparte. Government of India also honoured him with the 'Bharat Ratna', the highest Civilian Award in India. It was JRD Tata who had recommended the name of Ratan Tata in 1991 to succeed him as Chairman of Tata Sons. and lead the Tata Group.

            Ghanshyam Das Birla a.k.a. G. D. Birla was born on 10 April 1894 in Pilani Rajasthan. Since pre- independence time he was known as the 'Nationalist Businessman'. He often used to meet Mahatma Gandhi and they used to write letters to each other. In 1918 he started the jute mill in Calcutta and a cotton mill in Bombay, which he larer on shifted to Calcutta. He also started paper mills and made a foray into automibe industry by establishing the Hindustan Motors. The famous car models produced by Hindustan Motors were Contessa and Ambassador. Contessa was also dubbed as the Indian Mercedes by some people. He had started the United Commercial Bank on 6 January 1943. This bank is known as UCO Bank at present. It was one of the banks nationalised by Mrs. Indira Gandhi in 1969. G. D. Birla along with Purshotamdas Thakurdas had established the Federation of Indian Chambers of Commerce and Industry (FICCI) in 1927. In 1964, he started one of the top most Institutes of Higher Technical Education in India at Pilani, in Rajasthan, it was named as Birla Institute of Technology and Sciences (BITS). Some of the prominent alumni of BITS, Pilani are Nanaji Deshmukh (Social Reformer), Prof. S. P. Kothari (Academecian), Baba Kalyani (Businessman/Industrialist- Bharat Forge-Kalyani Group), Sunil Duggal (Dabur India), Prithviraj Chouhan (Former Chief Minister of Maharashtra).

            Sir Ardeshir Dalal was known as the technocrat and administrator. In British India he had served on important adimistrative posts of government. In 1928 he became the first Indian to be appointed as the Municipal Commissioner of Bombay City. He was ICS officer. He joined the Tata Group in 1931 as Director of Tata Iron and Steel Company. He was with Tata Group from 1931 to 1941 and again from 1945 to 1949. Lord Wavell (Viceroy and Governor General of India between October 1943 to February 1947) appointed Dalal as the Member of Viceroy's Executive Council in 1944 to look after the Planning and Development.

            Sir Shri Ram or Lala Shri Ram was born on 27 April 1884 in Delhi. He was associated with the Delhi Cloth Mills (DCM). He was the main spirit behind the establishment of important educational institutions in Delhi viz. Shri Ram College of Commerce ( Some of the notable alumni of this College are Late Arun Jaitley- the former Finance Minister of India, Rakyesh Omprakash- noted film maker of ,'Rang De Basanti' and 'Bhaag Milkha Bhaag' fame and actor Gulshan Grover) Lady Shri Ram College for Women (Notable alumane of this College are Aung Saan Suu Ki- the famous political leader of Myanmar, Archana Puran Singh-actress, Nidhi Razdan-journalist, Mrudula Mukherjee-historian) and Shri Ram Institute for Industrial Research among others.

            Kasturbhai Lalbhai was born on 19 December 1894 in Ahmedabad. It is said that he was the descendant of Shantidas Jhaveri, the royal jeweller of Mughal Emperor, Akbar. His father, Lalbhai had started the Saraspur Cotton Mill in 1896. He became the President of Federation of Indian Chambers of Commerce and Industry in 1934. Ahmedabad Textile Industry's Research Association (ATIRA) was formed by Kasturbhai Lalbhai along-with Vikram Sarbhai and Shanti Swaroop Bhatnagar in 1947. He was the Director of Reserve Bank of India (RBI) from 1937 to 1949. He had donated the land for the establishment of Indian Institute of Management (IIM) at Ahmedabad.

            A. D. Shroff was born on 4 June 1899. He was Industrialist, banker and economist. He is regarded as one of the guiding spirit behind the banking and insurance business in India. He attended the Bretton Woods Conference on post war monetary and financial systems in 1944. He was the founder Director of the Investment Corporation of India and Chairman of Bank of India and New India Assurance Company Limited.

            John Mathai was born on 10 January 1886 in Calicut now known as Kozhikode in Kerala. He was the Professor of Economics in Madras University. He also served as the Railway Minister and Finance Minister under Pandit Nehru. He was the first Chairman of State Bank of India. He was also the Vice Chancellor of University of Bombay from 1955 to 1957. Verghese Kurien, the man credited for bringing White Revolution (Milk Revolution) in India was his nephew. Mathai had also served as the Director of Tata Sons Ltd.

            The brief profile of the authors and signatories to the Bombay Plan indicates it's significance. These were the people who had created the niche for themselves in administration as well as business affairs of India during British rule. Their achievements had made the British government to take cognizance of it and accordingly not only to honour them but also exploit their expertise in designing and implementing government decisions, wherever needed.

            The Bombay Plan(ners) were contemplating the idea that there would be National Planning Committee and the Supreme Economic Council for designing and executing the economic plans respectively. And these two would function under the control or supervision of central government. The most important objective of the Bombay Plan was to double the per capital income of India within fifteen years from the implementation of the Plan. The Planners emphasised that the prime attention to be given for producing power and capital goods in the beginning while not neglecting the production of consumption goods for consumers. While pondering over the financial aspect of implementation of the Plan, the authors said that the real capital of the country is resources in material and man-power. Once these are mobilised and properly canalised in to economic activity most important thing is done. The Bombay Plan had envisaged the reasonable standard of living with the emphasis on food, clothing, shelter, medical relief and education. The Plan believed that the people should be able to get balanced diet with 2,800 calories per day. The Plan stated that on the basis of the population of 1941 India would require 11,670 million yards of cloth for fulfilling the clothing needs of the country. Regarding housing space it stated the need of 100 square feet per person and the estimates for number of persons per house in 1941 were 5.1. Hence, it recommend the minimum 500 square feet as the average area of house where five persons can live comfortably.

            For achieving the Minimum Health Standards, it recommend the steps such as proper sanitation and water supply, dispensary for every village, general hospitals and maternity clinics in towns and special institutes for treating the tuberculosis, cancer, leprosy, venereal diseases, etc. The Plan also discussed the nitty-gritties of above mentioned measures in detail.

            The Planners had recommended that all the persons above the ten years of age should be able to read and write. It had suggested the school for each village with minimum basic facilities. It also gave emphasis on adult literacy. The Plan believed that for ensuring the minimum standard of living the per capital income of Rs. 74 was essential at pre-war (Second World War) prices.

            The Plan aimed at threefold increase in the national dividend or income within fifteen years from the implementation of it.

            The Plan classified the industries in to two categories i.e. Basic Industries and Consumption Goods Industries. The former included power, mining and metallurgy, engineering, chemicals, armaments, transport and cement companies and that of latter textiles, glass, leather goods, paper, tobacco and oil Industries mainly.

            As far as agriculture was concerned it proposed increasing agricultural production by 130 per cent with the suggestion of co-operative farming for increasing the size of agricultural holdings. It felt the need of liquidation of the rural or agricultural indebtedness. The Plan recommended the provision of Rs. 200 crores capital outlay and Rs. 10 crores as recurring amount towards conservation of soil and other measures for improving the quality of land. Apart from these aspects, it also advised extending the area of agricultural cultivation and increasing the production per acre. It talked about the Model Farms for educating the cultivators.

            The Bombay Plan touched most of the important areas of economy and infrastructure such as transport and communication, railways, roads, shipping, education, sources of finance, needs of consumers, distribution of the national income, full employment i.e. suitable sources and opportunities of earning to every adult, urban and rural wages, agricultural prices, free social services which included the free primary and middle school and adult education and medical treatment both in urban and rural areas, due emphasis on utility services such as electricity, gas, transport, provision of National Relief Fund, social security measures, taxation of income, regional development, etc.

           The Bombay Planners also recognized the role of State and its need based intervention in the economic affairs of the country. In addition to State functions such as managing currency and public finance, collection of statistical information/data, safeguarding the interests of economically weaker sections, it expected the State to deal with matters of ownership, control and management of economic enterprises. It suggested that enterprises owned by the State, public utilities, basic industries, industries using scarce natural resources to be controlled by the State. Thus, the Bombay Plan suggested the model of mixed economy in a way by giving space and defining the role of both the private Enterprise and the State in economy and industiral sector.

            The authors of Bombay Plan were of the opinion that the Bombay Plan should be split in to three five year plans and to be implemented accordingly in total fifteen years.

           The Bombay Plan was published in two parts. The second part of the Plan was not signed by Sir Ardeshir Dalal as by the time second part was published in1944, he was appointed as the Member of Viceroy's Executive Council as the Member for Planning and Development.

            It is advisable for the students of economics, commerce and management in particular and all other students in general to study and analyse the Bombay Plan as it is very important Document which tried to give important piece of advice to government on economic affairs. In 2018, the Rupa Publications India Pvt. Ltd. has published a fantastic book on Bombay Plan. The title of the book is 'The Bombay Plan: Blueprint for Economic Resurgence'. It has been edited by Sanjaya Baru who was Media Advisor to Dr. Manmohan Singh, the former Prime Minister of India and Lord Meghnad Desai, the UK based economist and politician. It's a must read book.

Asst. Prof. Subhash G. Shinde

Vice Principal and HoD, History

VPM's Joshi-Bedekar College, Thane