The Socialist Pattern and the Second Plan
T P Subramonian
SOCIALISM is, of
course,
a
technical term.
B u t as on
several other concepts in social
science, t h e r e is no
universal
agreement on t h e precise meani n g or definition of
the term,
Socialism m a y refer
either to
t h e end o r t o the means'
By
socialism one m a y m e a n m e r e l y
t h e ideals
of social
justice,
greater equality
and security,
w h i c h are the ultimate aims of
socialism;
or the
term may
signify the
particular method
b y w h i c h socialists hope t o att a i n these ends.
A g a i n , socialism m a y mean,
on
the
one
hand, a n e w pattern of society
t h a t is envisaged; and, on the
other hand, a
movement that
strives to
substitute this new
p a t t e r n f o r t h e e x i s t i n g social
order.
Thus the term British
Socialism
would
mean
the
movement
striving
for
the
achievement
of
socialism in
Britain, while the t e r m Russian
Socialism
would
signify the
social system t h a t actually prevails in the Soviet U n i o n .
It is true t h a t socialism, as a
social system, stands in contrast
to
capitalism
mainly on the
issue
of
property
relations.
While
capitalism stands
for
private ownership of the means
of production and
for the incentive of
p r i v a t e g a i n , socialism
reserves
the
right
of
ownership of the means of production
to public
bodies and
eliminates the motive of private
profit. L i n k e d w i t h the doctrine
of
public
Ownership
of the
means
of production
is the
doctrine of equality.
B u t all
these refer to 'pure' capitalism
and 'pure' socialism w h i c h are
mere figments of the imagination. In the actual world, there
could w e l l be some elements of
t h e one s y s t e m u n d e r the other.
E v e n in the Soviet
Union, a
limited extent of private ownership of the means of
production is permitted.
In fact, in
the actual w o r l d there is no such
thing as
'socialism'
in itself
there are m a n y f o r m s of sociali s m w i t h considerable differences a m o n g t h e m . S o m e s o c i a l i s t s
are moderate
and gradualist,
while others
favour a
quick
transformation of the existing
order; and there are m a n y intermediate positions too. T h e pace
w i t h w h i c h a c o u n t r y proceeds
on the r o a d to socialism is set
by a number of factors w h i c h
include, a m o n g others, the circumstances of the country, the
trend of national thinking, the
relative
urgency of
various
needs a n d t h e p o l i t i c a l
line of
the p a r t y in power.
Countries
on
the
socialist
r o a d differ n o t o n l y o n the pace
w i t h w h i c h t h e y advance but o n
t h e f e a t u r e s o f t h e socialist soc i e t y t h e y seek t o b u i l d u p .
In
fact, socialism cannot develop
effectively in any c o u n t r y in a
f o r m unrelated to that country's
history and
living traditions,
and t h e values held dear in t h a t
country.
"The socialism
of
each area moulds itself to fit the
shape of the national or regional tradition".
Thus the totalitarianism and centralised bureaucracy of Russian C o m m u n i s m
are b u t the natural and inevitable results of Russian h i s t o r y
and tradition.
The parliament a r y methods
and democratic
institutions
insisted on by the
B r i t i s h Socialist M o v e m e n t are
equally the products
of the
British situation. Similarly, if
the socialist p a t t e r n of society
t h a t is sought to be created in
I n d i a is, i n some respects, d i f f e r ent f r o m forms of
socialism
conceived or e x i s t i n g elsewhere,
one need n o t hasten to question
its v a l i d i t y or get alarmed at
its deviation f r o m o r t h o d o x y ;
it o n l y means, perhaps, t h a t it
tries to incorporate, w i t h the
central
socialist ideal, certain
values
held in esteem in the
Indian tradition so that
the
idea w o u l d
take
firmer
and
deeper root.
II
In this light let us examine,
firstly, the
objective of
the
Second F i v e Y e a r Plan
and,
secondly, t h e approach of the
Plan to this objective.
The overall objective of the
Second F i v e Y e a r Plan is the
creation of a socialist
pattern
of society,
This is sometimes
681
c r i t i c i z e d as t o o vague a concept,
about w h i c h nobody has a precise n o t i o n ( A K D a s G u p t a :
"Socialistic P a t t e r n of Society
a n d the Second F i v e Y e a r Plan",
Economic
Weekly
Annual,
January 1957),
L e t u s see i f
t h i s concept of "socialist pattern of society" is an innovation in national
thinking, a
mere shimmering shadow or an
e m p t y slogan.
A f t e r all, a national plan f o r India m u s t conf o r m to the Directive Principles
of the Constitution. The Directive Principles call upon
the
State to promote the welfare
of the
people by
creating a
social o r d e r i n w h i c h
justice,
social, economic a n d
political,
w i l l prevail.
T h e y f u r t h e r ordain the
State to direct
its
policy
towards
securing
(a)
" t h a t the citizens, m e n and w o men equally, have the r i g h t to
an adequate
means of livelihood", (b) "that the ownership
and control of the material resources o f the c o m m u n i t y are
so d i s t r i b u t e d as best to subserve the c o m m o n g o o d " and
(c) " t h a t the operation of t h e
economic s y s t e m does n o t r e s u l t
in the concentration of wealth
and means of production to the
common detriment". Undoubtedly, a socialist p a t t e r n of society
could best fulfil these requirements.
The Plan would,
nat u r a l l y , also b e i n line w i t h t h e
policy resolutions of the p a r t y
in power.
The
Congress
has
been
committed
to
socialist
principles
for
a
long
time.
Its
resolutions
in
recent
years have o n l y re-stated these
principles.
The Avadi
session
(1954) declared t h a t planning
in India should aim at
"the
establishment
of a socialistic
p a t t e r n of society, w h e r e
the
means of p r o d u c t i o n are under
social ownership and
control,
production
is
progressively
speeded up a n d t h e r e is equitable
distribution
of
national
wealth". It is in
conformity
with
these t h a t the P l a n n i n g
Commission lavs down, in the
Second Plan, t h a t "essentially
t h e s o c i a l i s t p a t t e r n o f societym e a n s . t h a t t h e basic c r i t e r i o n
June 1, 1987
THE
682
ECONOMIC
WEEKLY
THE
ECONOMIC
June 1, 1957
W E E K L Y
solutely but relatively to
the
private
sector.
E v e n i f one
ignores the proposed new investment, and examines the ratio of
the shares of the public and
private sectors in the ownership
of productive capital prior
to
the First Five Year Plan, the
importance of the public sector
c o u l d b e e a s i l y seen. T h e b o o k
v a l u e o f gross f i x e d assets o w n ed by Central and State Governments, together w i t h
the
w o r k i n g capital in the enterprises
concerned,
amounted
to
over Rs 1200 crores a t - t h e end
of 1950-51.
T h e e s t i m a t e excludes
investment
in
motor
transport.
If account is taken
o f t h e p r o d u c t i v e c a p i t a l assets
owned by port trusts, municipalities and
other semi-public
agencies,
the
figure
would
exceed Rs 2200
crores.
The
v a l u e o f p r o d u c t i v e c a p i t a l assets i n t h e p r i v a t e sector (exc l u d i n g a g r i c u l t u r e , s m a l l scale
industry
and
transport
and
residential housing) in 1950 was
n o t m o r e t h a n about R s 1500
crores. ( F i r s t F i v e Y e a r Plan,
O n t h e a p p r o a c h o f t h e Se- p 3 2 . )
c o n d P l a n , t h e opinion is someA p a r t f r o m t h e size o f p u b l i c
times expressed t h a t the P l a n
i
n
v
estment, the lines of investhas v e r y l i t t l e of socialist content i n i t ( i b i d ) . L e t u s exa- m e n t undertaken b y the public
are such as to
bring
mine the P l a n w i t h reference t o sector
s
t
r
a
t
e
g
i
c
c
o
n
t
r
o
l
o
f
t
h
e
e
c
o
nomy
its approach to the
objective
i
n
t
o
i
t
s
h
a
n
d
s
.
F
o
r
i
n
s
t
ance,
o u t l i n e d , a n d see h o w f a r i t i s
the accent of the Second P l a n
adequate f o r its realisation.
development
If the
basic
criterion
for is on industrial
a
n
d
f
o
r
t
h
i
s
t
h
e
m
a
j
o r responsid e t e r m i n i n g the lines of advanb
i
l
i
t
y
i
s
t
a
k
e
n
u
p
b
y the State.
ce must not be private profit
T
h
i
s
i
s
a
s
i
g
n
i
f
i
c
a
n
t
departure
b u t social gain, it is i m p o r t a n t
f
r
o
m
p
r
e
v
a
i
l
i
n
g
t
r
e
n
d
s
,
as could
to
eliminate
the
profit
b
e
s
e
e
n
b
y
a
c
o
m
p
a
r
i
s
on w i t h
motive from
strategic sectors
of the economy.
It means t h a t the investment pattern of the
major
decisions
regarding F i r s t Plan and w i t h State actiproduction, distribution, con- v i t y prior to planning. A large
s u m p t i o n a n d investment m u s t outlay (Rs.890 crores) by the
b e m a d e b y agencies i n f o r m e d p u b l i c sector is envisaged f o r
by
social
purpose". (Second i n d u s t r i a l development and of
F i v e Y e a r Plan, p 2 2 E m p h a s i s t h i s t h e b u l k (Rs 690 crores)
m i n e ) . A progressive e x p a n s i o n i s f o r t h e development o f basic
bring
o f t h e p u b l i c s e c t o r i n size a n d i n d u s t r i e s . T h a t w o u l d
i
n
t
o
t
h
e
h
a
n
d
s
o
f
t
h
e
S
t
a
te an
influence is therefore inescapaentire
b l e , t h o u g h i t does n o t neces- i n d i r e c t c o n t r o l o f t h e
sarily i m p l y the annihilation of industrial structure.
for determining
t h e lines o f
advance
must not be
private
profit b u t social gain, and t h a t
the
pattern
of
development
a n d t h e s t r u c t u r e o f socio-economic relations should be
so
planned
that they
result not
o n l y i n appreciable increases i n
national income and
employment, b u t also in greater equal i t y in incomes
and wealth".
This
statement,
though
it
might permit of slightly varying
interpretations, brings out the
m a i n features of the socialist
p a t t e r n of society t h a t is envisaged as the goal of planning
in
India. Higher
national
income and standards of living
and fuller employment are undoubtedly of importance in it.
B u t the crucial factors which
would distinguish the
future
socialist p a t t e r n f r o m t h e socioeconomic system of t o d a y are
the elimination or control of the
profit motive and the creation
of substantial equality in i n come, wealth and opportunity.
lll
t h e p r i v a t e sector.
It is this principle t h a t is reflected in the investment pattern
o f the Second Plan.
N o t only
does t h e Second P l a n envisage
a heavy investment by the public sector b u t represents a h i g h e r
proportion of it than found in
the First Plan.
Thus the public
sector is g r o w i n g n o t o n l y ab-
The Industrial Policy Resolut i o n o f 3 0 t h A p r i l 1956 c o n t a i n ed in the Second P l a n is p r i m a r i ly oriented to the objective of
creating a socialist pattern. The
policy of nationalising enterprises o f b a s i c i m p o r t a n c e i s a l s o
dictated by this objective.
The
nationalisation of the Imperial
B a n k of India and of the Life
683
Insurance companies and
the
setting up of the State T r a d i n g
C o r p o r a t i o n are significant steps
in this direction. A n d more
m i g h t follow. The continuance
and, in certain lines, t h e expansion of the private sector do n o t
r u n c o u n t e r t o t h e basic objective.
For, firstly, the bulk of the
p r i v a t e sector consists of t h e
unorganised sectors of a g r i c u l t u r e a n d s m a l l scale a n d c o t t a g e
industries. T h e socialist p a t t e r n
c e r t a i n l y does n o t conceive o f
n a t i o n a l i s i n g these sectors. T h e
abolition of landlordism,
the
expansion of peasant proprietorship and the progressive organisation of co-operative f a r m i n g
are t h e steps envisaged by t h e
socialist p a t t e r n i n t h e spBere
of agriculture. The principle
of co-operative organisation w i l l
be steadily pursued in the small
scale a n d c o t t a g e i n d u s t r i e s also.
A n d w h e n these are done there
w i l l be n o danger o f t h e profit
motive t a k i n g anti-social manifestations as under capitalism.
Secondly, the organised sector
of private industry w i l l have to
f a l l i n l i n e w i t h t h e socio-economic policies of the State.
As
the Second P l a n puts i t , "Gove r n m e n t can influence
private
decisions
t h r o u g h fiscal measures, t h r o u g h l i c e n s i n g and, t o
t h e e x t e n t necessary, t h r o u g h
direct physical allocations so as
to promote and facilitate the
realisation of the targets proposed" (p 28).
The policy of
focussing t h e State's a t t e n t i o n
m o r e on developing new enterprises r a t h e r t h a n nationalising
e x i s t i n g ones a n d c o m p e n s a t i n g
t h e i r owners, has the m e r i t of
e x p e d i e n c y b u t does n o t v i o l a t e
the
basic
objective.
There
could w e l l emerge a socialist
pattern of society in India w h i c h
consists of a d o m i n a n t
public
sector d i r e c t l y m a n a g i n g enterprises of basic i m p o r t a n c e and
exercising strategic control over
the entire economy, and a p r i vate
sector
that
is
either
decentralised and co-operatively
organised or is dependent
on
a n d controlled by the State.
IV
T h e o t h e r i m p o r t a n t aspect
o f t h e s o c i a l i s t p a t t e r n o f society is the establishment of a
substantial measure of equality
in income, wealth and opportunity.
T h e Second Plan aims t o
reduce inequalities b o t h by the
June 1, 1957
process o f levelling u p a n d b y
that of levelling down, w i t h a
relatively greater emphasis on
the
former. Taxation is not
the only method thought of by
the
Plan; welfare
measures,
fiscal devices a n d i n s t i t u t i o n a l
changes are a l l envisaged f o r
the purpose.
L i f t i n g up the lowest rungs
of the c o m m u n i t y ' s ladder rests,
to a great extent, upon the prov i s i o n of social services w h i c h
w o u l d raise real incomes a n d
standards of l i v i n g and
thus
reduce disparities.
T h e Second
Plan makes a substantial outlay
of
Rs 945
crores for
these,
w h i c h is about twice the p r o v i sion made in the First
Plan.
The development of medical and
educational facilities
and the
advancement
of
industrial
labour and other under-privileged classes w i l l help p r o v i d e
greater equality of opportunity
in the
country.
The labour
p o l i c y l a i d d o w n i n the P l a n recognises t h a t the
creation of
i n d u s t r i a l d e m o c r a c y is a prerequisite for the establishment
of a socialist society.
Recent
labour legislation has bought to
further this policy.
The community
development
and the
national extension programme
constitute a significant step to
improve living conditions in
r u r a l areas
and progressively
reduce gross disparities.
Measures f o r the substantial reduction of rent and
provision of
s e c u r i t y of tenure find a place
in the land r e f o r m programme.
Co-operative
farming
is put
f o r t h in the Plan as the ultimate
solution to the problems of small
holders
and
tenants.
Under
the
pattern
of
co-operative
village development
visualised
as the goal in the r u r a l sector
a n d f o r w h i c h the f i r s t steps
are to be t a k e n by the Second
Plan, w o r k opportunities
are
expected to develop to such a
m e a s u r e w i t h i n t h e r u r a l econ o m y " t h a t t h e d i s t i n c t i o n between those w h o have land a n d
those w h o are landless w i l l lose
m u c h of its significance".
(Second Plan, p 207)
THE
tax system
and through
institutional
changes
which
place an increasing p r o p o r t i o n
of the community's
resources
directly in the hands of public
authorities t h a t an effective reduction in the
incomes
and
spending power accruing to the
few can be b r o u g h t about"
(Second Plan, p 3 6 ) . A d d i t i o n a l
taxation
is thought of under
the Plan not
only to acquire
additional resources f o r developm e n t b u t also t o i n t e r c e p t t h e
margins available w i t h the rich.
T h e estate d u t y a n d t h e c a p i t a l
gains t a x are appropriate beginnings.
The
taxes on w e a l t h
and expenditure proposed in the
C e n t r a l B u d g e t f o r 1957-58 are
steps t h a t l o g i c a l l y f o l l o w . T h e
principle of redistribution
of
land ownership is d u l y recognised in the Plan
a n d steps are
recommended for the imposition
of
ceilings
both
on
future
acquisitions and on
existing
holdings.
V
If a socialist society is the
goal and democratic planning
the means, the approach of the
Second F i v e Y e a r P l a n is correct.
One five-year plan or t w o
T h e process o f levelling d o w n
t h e t a l l poppies also
finds
a
place in the Plan.
T h e use o f
fiscal measures f o r the purpose
i s sanctioned.
' I t is through
progressive adaptation of
the
684
ECONOMIC
W E E K L Y
m a y not take us straight to the
goal.
C h a i r m a n M a o Tse T u n g
of China said it w o u l d
take
t w e n t y years f o r C h i n a t o establish socialism. I n d i a then is
certainly not too slow in her
advance to socialism.
Thus, as far as the Plan is
concerned, it c e r t a i n l y
has a
large measure of "socialist content" in it.
B u t one m a y feel
dissatisfied
w i t h t h e pace a t
w h i c h o r t h e efficacy w i t h w h i c h
particular
measures
recommended in the Plan are implemented by the
Central and
State Governments.
That is on
account of legal loopholes, conctitutional
obstacles
and
the
influence of
vested
interests.
The land reforms introduced in
various
States have been t h e
victims of such factors.
But
t h a t is n o t the defect of the
Plan.
Silver Exide
Silver Exide M o t o r Vehicle
Batteries will henceforth bear
the I S I Mark, conveying
the
added assurance t h a t t h e y have
been m a n u f a c t u r e d under controlled conditions and are of the
q u a l i t y laid d o w n in the relevant Indian Standard.