The First Five Year Plan

The First Five Year Plan ran from 1951 to 1956. Its aim was to get the economy out of the cycle of poverty: people too poor to save, so no money for investment, so no growth, so they stay poor.

The young economist K.N. Raj, who helped draft it, argued that India should 'hasten slowly' for the first twenty years. Going too fast, he warned, might endanger democracy: forcing rapid change could cause unrest.

Focus on agriculture: farming had been hit hard by Partition: the richest canal-irrigated lands of Punjab went to Pakistan, and food was short. So the plan put big investments into dams and irrigation. The Bhakra Nangal project on the Sutlej was one of the largest.

Land reform: the plan saw the very unequal distribution of land as the main obstacle to agricultural growth. A few landlords owned most of the land, while those who worked it had little reason to improve it. So land reforms were seen as key: abolishing zamindari, fixing ceilings on how much land one person could own, and protecting tenants.

Savings: to invest more, the country had to save more. The plan tried to raise savings in order to raise national income. Savings did rise until the Third Plan, but not spectacularly; the government had to rely on its own investment and foreign aid as well.

The First Plan was cautious and patient: agriculture first, then industry.