Avant garde it certainly was, but more than that the Bombay Plan articulated the economic aspirations of the business leaders in the country. It is perhaps the only comprehensive document on planning prepared by a group of businessmen who decided to rise above the usual frustration of operating in an exploitative and unfair colonial economy and look into the future

They could clearly envisage that independence was round the corner and India would need a developmental blueprint. The core group included JRD Tata, G D Birla, Kasturbhai Lalbhai, Sir Purshotamdas Thak-urdas, and Sir Shri Ram and technocrats Ardeshir Dalal, A D Shroff, John Matthai. The newly created department of economics & statistics of the Tata Group also supported this group.

Throughout the plan, economic logic has been buttressed by empirical evidence and analysis. This was done during a period when statistics and econometrics were still in their infancy. It may not be out of context to point out that Mr Tata nurtured and mentored economic research in an era when the corporate sector had not become aware of its benefits.

The key objective was to bring about doubling of per capita income within 15 years after allowing for the usual increase in population. In the course of this exercise it was realised that doubling of per capita income would necessitate trebling of the national income. Given the sectoral composition, this called for a doubling of farm income and increasing industrial income by five times. This would have meant a significant step-up in investment.

The plan projected an expenditure of Rs 10,000 crore, of which, Rs 4,000 crore was to come from internal savings, Rs 2,600 crore was expected from external savings (including Rs 1,000 crore of India’s sterling balance), the remaining Rs 3,400 crore was expected to be met through "created money". This financing process had often attracted criticism, but the robustness of this logic is best demonstrated by the fact that almost a similar method was accepted by the Planning Commission in independent India. One is often tempted to think that the BP was developed like a strategy document of an enterprise. It had a clearly articulated vision; it had identified the key drivers of growth — basic and consumer goods industry. It had identified the constraints, e.g. power and non-availability of capital equipment etc. As a consequence the funds were to be allocated accordingly. Further, the BP was to be executed in three stages, its underlying logic is somew-hat similar to the current day three horizons model used by strategic planning groups.

From a pure economist point of view, 15 years provided the perspective with-in which was ensconced each of the three five year plans. What is often glossed over is the fact that the plan had an extremely visible ‘human face’ long before it had become fashionable to talk about human development index. It focussed not only on the need for basic nutrition, clothing and housing but also articulated the health care and educational needs.

It is a bit unfair that in the history of Indian economic thought, BP has not got the place it deserves. The concept of a mixed economy, eradication of poverty, role of foreign capital and deficit financing in an economy aspiring to enter a higher growth trajectory, etc. are there. There was an emphasis on infrastructure and basic industries but unlike the Mahalanobis-inspired Second Plan it did not ignore consumer goods.

Further it did foresee planning as an ‘indicative process’ not as a prescriptive tyranny, a concept to which we have reverted in the post-reform phase. The year 2004 is the 60th anniversary of the BP, it is also the birth centenary year of JRD Tata; with a merry chuckle one can add this is possibly also one of the best years in terms of growth for the Indian economy. Is the rate sustainable? Let’s ask the new stakeholders.

The writer is the head of department. of economics and statistics, Tata Services