In this episode, Shruti speaks with Nikhil Menon about the history of Indian socialism and central planning, government-artist relationships, economists who dissented from the central-planning orthodoxy, the legacy of P.C. Mahalanobis and much more. Menon is a historian of modern South Asia, specializing in the political and economic history of 20th-century India. His research explores the histories of democracy and development in independent India. His book, “Planning Democracy: Modern India’s Quest for Development,” tells the story of how India wedded western-style democracy and Soviet-inspired economic planning in the middle of the 20th century.
SHRUTI RAJAGOPALAN: Welcome to Ideas of India, where we examine the academic ideas that can propel India forward. My name is Shruti Rajagopalan, and I am a senior research fellow at the Mercatus Center at George Mason University. Today my guest is Nikhil Menon, assistant professor of history at the University of Notre Dame, specializing in the political and economic history of 20th-century India. We discussed his latest book, “Planning Democracy: Modern India’s Quest for Development.” We talked about how India implemented central planning as a postcolonial democratic republic, the role of P.C. Mahalanobis, attempts to increase plan consciousness in India, the role of technocrats, India’s centralized economic system and much more.
For a full transcript of this conversation, including helpful links of all the references mentioned, click the link in the show notes or visit mercatus.org/podcasts.
Hi, Nikhil. Thank you so much for being here. It’s a pleasure. I’m so thrilled that we’ve been planning, no pun intended, this conversation for months and months, and we finally get to do it.
NIKHIL MENON: Thank you so much, Shruti, for having me. Yes, we planned to do this several months ago, but illness came in the way of both of us, and I’m glad that we’ve finally overcome these hurdles in our planning.
A Democracy With Central Planning?
RAJAGOPALAN: Yes. The book is just wonderful. In the background is this postcolonial nation-building exercise that is taking place. In the foreground, it is a question of economic policy at its core, but really, there are two parts to it. One is the ideological lens or the goal, this idea that many of the socialists and the Fabian socialists in the Indian National Congress had: that economic growth is the most important thing that India required as a newborn constitutional republic, and the best way to achieve that, as the mainstream was at that time, is a planning exercise.
The second part is the tools or the infrastructure that is required for any country, a developing country or a new country or even an advanced country, to actually execute on the planning exercise. Your book is really focused on the latter. It is talking about how this infrastructure was built out, how it was related to the nation-building exercise. And the protagonist is, of course, the Professor, as we like to call him, who is P.C. Mahalanobis. What is a good way of thinking about the tools of planning that were relevant for India because it was a democracy, which is different from virtually any other place where such an extensive planning exercise was implemented?
MENON: Yes, thanks, Shruti. The book is about what I think is one of the great experiments of the 20th century: postcolonial India, independent India, after centuries of colonial rule, trying to put together two ideas that were considered institutionally and intellectually incompatible—on the one hand, Soviet-inspired economic planning; on the other hand, liberal democracy of this Western parliamentary style.
The book is not really an attempt to look at whether or not plans worked in terms of GDP growth, et cetera, or per capita growth, but really, in terms of how did planning become so central to the idea of modern India and to the story of modern India. I do that through the figure of P.C. Mahalanobis.
Then I look at how this idea of democratic planning was quite central to the narrative of early independent Indian nation-building, this idea that India is embarking on this new project, and that it has something to teach the world as part of its nonalignment, as part of its posture at international institutions and as part of the beacon that it shines for newly decolonizing nations. India, of course, was one of the first to decolonize. And so, for lots of decolonizing Asia and Africa, this seems as a model by which to navigate the choppy waters of the Cold War by not belonging to either bloc—with, of course, very mixed results, as we know.
It seems amazing today, but planning was once an exciting idea. Planning was once seen as an almost romantic idea. Why is it, for example, that Bollywood films are talking about it? Lata Mangeshkar and Mohammed Rafi are singing songs about panch-varshiya-yojana [Five-Year-Plan]. That’s what I’m trying to recreate with this book.
Now, coming to your question about the ideology of planning as opposed to the institutions that make it work, I actually made a conscious decision not to delve too much into the ideology of planning. Because in some ways, I think that that is better served by the literature on planning in India going back to the 1960s, the works by A.H. Hansen to then, later on, Partha Chatterjee, Medha Kudaisya. But even more recent books such as the volume by Cambridge University Press on the Planning Commission from last year, in which you yourself have an essay on the origins of the Planning Commission, the intellectual origins, ideological origins of it.
Just to summarize for those listening, I would say that the ingredients or the strands that I think of as most important for planning were, one, the Meiji Restoration of 1868, which provides a spark for Asian nations of what an Asian nation could do, what a centralized government with everything going in concert could achieve.
Then there is the Fabian socialism that you alluded to from the late 19th century. The Fabians were, of course, a kind of Marxist group that believed in a gradualist Marxism or a democratic socialism. It included people like Sidney Webb, Beatrice Webb, Harold Laski, major intellectuals of the late 19th and early 20th century. For the purposes of India, the reason they’re relevant is that they influenced a very important cohort of Indians including Ambedkar, including Nehru, including Krishna Menon and several others who were at Cambridge and the LSE [London School of Economics and Political Science] at the time.
Apart from that, of course, there is the influence of Marxism, straight-up Marxism and the Soviet Union. The Soviet Union with its own five-year plans in the 1920s, the New Deal in America under FDR, under Franklin Delano Roosevelt, which is also providing a model of what an avowedly noncommunist, capitalist country can do in terms of state-led growth as well.
Aside from that, there is the Second World War, which in some ways is a global planning moment in which, whether you’re communist or not, whether you’re Axis or Allied, the state is directing so much of the resources within America, England, Germany, Italy. And so much so that by 1945, the Labour Manifesto in England talks about the Labour Party believing in a planned economy. In some ways, even the country that colonized India believed in a planned economy.
MENON: I think that those are some of the ideological elements that go into planning. But I’d say that the Nehru government was ideological about planning, but it was not doctrinaire. I say so partly because this is something that Nehru would constantly return to in his letters. When, for example, he got barbs from the left, from the Communist Party, saying, “Well, if you believe in planning, shouldn’t you be doing this and that?” he would say that, “Well, we don’t believe in socialism in a doctrinaire manner. We believe it in the way in which it organically fits our conditions.”
His obsession—and the Nehru government’s obsession, really, including that of Mahalanobis—was industrialization. This is something the economists with him also allude to, whether you look at the writings of J.J. Anjaria, I.G. Patel, people who went on to careers that were not necessarily socialistic in any sense. I.G. Patel, of course, went on to lead the IIM [Indian Institute of Management] Ahmedabad, LSE, et cetera. They all said Nehru’s obsession was industrialization, and in a sense, socialism was a means to an end.
Also in terms of ideology, I think it’s curious to note that socialism itself in early independent India is this shape-shifting ideology such that you could have—
RAJAGOPALAN: Exactly. They can’t agree on what it is, first of all.
MENON: Exactly. I think that part of it is artful as well. Part of it is that you just feel like there’s a confusion about what socialism is. But part of it, I think, is for a generation that had actually read—like Nehru has read “Das Kapital” by Marx, et cetera—part of it, I think, is an artful framing by which you can have people from the communist parties, people from the Praja socialist parties, people from the Congress, even the Jana Sangh all claiming to be socialist.
And so, in the Avadi Congress in 1955, when the Congress Party declares the socialist pattern of society to be the goal for India, and then the parliament adopts it the next year, there’s not very much opposition except for very minority opposition. It’s because everybody describes himself as a kind of socialist.
RAJAGOPALAN: This comes up in Constituent Assembly debates. There’s a question of whether they should include the word “socialist” in the preamble. Everyone agrees that they are socialist and it’s a good idea, but none of them agree upon exactly what it means. On a very technical point, it is left out. Of course, it’s brought in later in the 42nd Amendment by Indira Gandhi and so on. Now it does find itself in the preamble, but you’re absolutely right. It’s that they’re all socialists, but to all of them, the goals are similar, but the means or the planning aspect of it means quite different things. In fact, each one of them come up with their own plans, which you talk about.
MENON: Yes. I think that the one-stop departure from that is, from the late 1950s onward, liberal conservatism—it seems a contradiction in terms, but the liberal economic vision and the social conservative vision of people like Rajaji with the Swantantra Party. That is diametrically opposed to all kinds of socialism. It includes people who are former socialists like Minoo Masani, somebody that you’ve written about as well. In the early 1950s, if socialism is an umbrella term, it’s a very crowded space underneath that umbrella because everybody claims to be a socialist. And Sudipta Kaviraj says it leads to this confusion about what socialism itself means at that time.
Legitimizing Development Planning
RAJAGOPALAN: You spend a lot of time in the book—and that part is just delicious to read, the kinds of efforts that were made to legitimize the planning exercise and the five-year plan specifically in public consciousness, to publicize these ideas to make sure that they get some legitimacy.
Given that socialism was so much in the air, I guess one of the questions that I was thinking about is, why did it need to be legitimized? Was it because this was mostly an intellectual movement that most Indians—this was a very agrarian economy; most people were not literate. Is that one of the reasons that this needs to be legitimized in public consciousness? Is it because there is a continuation from British war controls and price controls and quantity controls?
There is a reminiscence of things that happened after 1939, and now that you’re continuing the same policies after 1950, is there an effort to Indianize this and break from the colonial moment? Is it because they’re worried about the spreading communism? There are two states which have democratically elected communist parties to represent them in government. Why is there this burning need to legitimize these plans? To me, it seems there was so much buy-in. But then, I’m only reading the English elite literature.
MENON: Right. I think that that’s a great question. In some ways, the whole second half of my book is dedicated to trying to grapple with this idea of, well, planning, we think of as this entirely technocratic exercise. There’s good reason why most scholars are focused on that. What I was surprised by is how much effort, time and government and public money is spent for at least two decades on trying to convince Indians to become, as the term went, “plan conscious,” to convince people to participate in the plans. I think there are many reasons for it, some of which you alluded to. I think that those all go into the factor mix.
One is that there is definitely—certainly in the ’50s and the ’60s at least, and after that it wanes, as with many other things—there’s an idealism. From right to left, there’s a generation of politicians who have spent much of their professional lives and their youths fighting in this national struggle, in this struggle against colonialism. There’s a belief that people can participate, that you can exhort people to do things that are not necessarily in their material interest. There’s a conception of what this new democracy will be.
There’s a conception that it needs to be participatory. That citizenship—and this is something that Niraja Gopal Jayal has written about in her book on Indian citizenship—that Indian citizenship was meant to be something in which you got the fruits of citizenship, such as liberty, et cetera, but it came with obligations. It came with responsibilities, especially in a poor country like India.
Those responsibilities included doing things such as—this is not Niraja Gopal Jayal, but in my interpretation, what her analysis suggests is that one of the obligations that the citizenry is to participate in is national development goals. Not necessarily government policies, but national development goals.
Because planning becomes so closely fused with national development, in a sense, it’s an exhortation to the Indian public to participate in this goal of national development. The idea being that we’ve struggled, we’ve got independence, you’re now independent Indian citizens, but the struggle doesn’t end there. We are overwhelmingly, as you said, agrarian, overwhelmingly illiterate, overwhelmingly poor. We depend on most countries for foreign aid, but you can participate in this goal of national development.
That’s why I think that the term “plan consciousness” was used a lot, and as opposed to say, “class consciousness,” which a more Marxist theory would advocate. Because plan consciousness allows everyone to participate, right? It allows you to have a vertical line of identity, as opposed to a lateral line that cleaves populations apart from each other, as opposed to class, caste, et cetera, religion identity, linguistic identity. Plan consciousness is something that the mill owner and the proletariat and the agricultural laborer—everyone can theoretically have plan consciousness.
There’s this idealism that is certainly prevalent in certain parts of the government. Nehru certainly—his writings (having spent a lot of time in his writings)—he certainly subscribes to this. Apart from this idealism, there’s also some realpolitik going on. There’s a recognition of extremely low state capacity, and there’s a recognition that all these highfalutin plans that we have, especially with the second five-year plan, they’re just not going to work, especially at a time in which we have this dollar squeeze.
We don’t have foreign exchange. The savings rate is low. One of the ways in which we can do it is to have people voluntarily contribute to it. “Without recourse to wage payments” is one of the phrases that I found in the plan documents. You have people contributing to laying embankments, to laying roads, to building dispensaries and hospitals without getting any payment, and that’s part of this plan consciousness.
Thirdly, I think, it’s also part of just political legitimation. The Congress Party realizes that if it wants to be popular in the public’s eye, fusing itself to development programs, just like in 2022, in the 1950s, is a good way of doing it. If you constantly talk about development, then the common person—the least that they hear about you is that this is what you seem to want to be doing. I don’t think that you can completely remove electoral considerations from it, but I do think there’s a good deal of, as I said, idealism, but also an eye toward low state capacity.
Plan Consciousness vs. Democratic Consciousness
RAJAGOPALAN: There were times when I was reading the book when I was feeling a bit cynical, in the sense that if you think about another slightly foreign idea, which was brought in wholesale, it is universal adult franchise. India is very unique in that at the birth of the republic, even though such a large percentage of the population is illiterate, they bring in universal adult franchise, very similar to the beautiful narrative you’ve painted for us on how this happens. Ornit Shani has this fantastic book on how India really became democratic.
Ram Guha has written about how elephants were sent to really far-flung places deep inside the forest, and Sukumar Sen was trying to get India to vote. The interesting thing is, even though that was a bit alien—and there was a lot of publicizing and propaganda that happened by all political parties, not just the Indian National Congress or the government—this idea of constantly selling India as a democracy, it went away. We didn’t have to sell it. People took to it quite naturally. It worked wonderfully. India has had a continuous—except for a 22-month period, and President’s Rule in many border states, unfortunately—it’s had a very good record of holding elections, very high voter turnouts.
It’s not that in the ’60s and ’70s, enormous government budgets are being spent to publicize the idea of voting or participating in the democratic endeavor. On the other hand, that’s happening for plan consciousness. Is it because it’s just not giving results, that there are still these massive shortages, people are waiting in line, the poor are hungry, young people cannot get a job? Everything that was promised to them is simply not coming through. Is that one of the reasons there needs to be such a huge narrative, which is very much designed around this Indian nationalist notion of sacrifice?
That’s another thing that pops up a lot. My romantic view is, “Wow, this was this great nation-building exercise. There was this collective consciousness,” very much the Niraja Gopal Jayal story. The cynical economist in me is like, “Of course they had to publicize this. People were starving. This whole thing is bonkers.” How do you think about that?
MENON: Yes, it’s interesting to compare it to a simultaneous experiment, in some ways, of instituting the adult franchise. I think that two distinguishing features come to mind. One is that India—though universal adult franchise accepted in toto is new, and new in the world when India does it, India still had at least some baby steps toward electoral democracy from the early 20th century onward. In some ways Indians are being tutored to the idea of elections with an expanding franchise from the early 20th century. It goes from municipal to provincial, and it’s very elite, very male-dominated, et cetera.
At least the idea is that—part of the decades-long nationalist campaign is that we will extend the vote to you and that once you have the vote, things will change. In some ways, that work that is being done for planning from the 1950s is being done for voting from before itself, which is that an idea is being propagated of people needing to adopt these new political forms, these new political identities and new political actions in order for the country to move forward. I’d say that in some ways elections had that benefit going for it.
The other difference is that I think that if we judge the success of electoral democracy just by the fact that elections happened, maybe that is too low a bar when we’re comparing it to planning. I suppose the supporter of planning would say, “Well, five-year plans were instituted.” That’s the bare minimum that happened. The question would be: Substantively, did electoral democracy yield results that helped the Indian citizen in ways in which we would expect the five-year plans to help Indian citizens?
And so for example, when the V-Dem Institute looks at Indian democracy today and says it’s only electoral democracy, but it’s not really a democracy in substantive aspects, I would say that that would be more (to my mind) the like-for-like comparison. If in the first 10 years, we have 4% growth as opposed to 1% growth, between 1900 and 1950 that is maybe some appreciable growth, which is bad compared to the 1970s, where it’s much less and you should be doing more.
How do you compare that? What is the like-for-like comparison with electoral democracy? Not just that people have the vote, but are the aspirations of the people when they go to the electoral booth being translated by the political class that they’re voting into power?
RAJAGOPALAN: For me, the question was more about, do they buy into it, not so much the outcome. For instance, Rohit De has this wonderful book, “A People’s Constitution.” Again, the constitution was a project that was a very elite project. I mean, a large part of the assembly is chosen through the elections that happened in 1946, the provincial elections, but that is on a very limited franchise. This is very much the elite. The assembly is cognizant of the fact that it is an elite and keeps the amendment provisions fairly easy so that once there’s universal franchise, people can actually change things in the constitution.
Yet, the moment you have the post-constitutional moment, Rohit describes wonderfully how this is no longer an elite enterprise. It is regular folks, butchers and prostitutes and cotton sellers and ordinary businessmen, who have taken the idea that these rights are now guaranteed to them very seriously and run with it. In a sense, we do have a constitutional consciousness. At least, that’s what I learned from Rohit’s book. I’m curious about—we have a democratic consciousness. Maybe doesn’t give us the outcome. We have a constitutional consciousness, though it may not extend to everyone, for instance, in tribal regions. I’m not suggesting it’s universal. But it seems like a lot of effort has to be made for a plan consciousness.
RAJAGOPALAN: I think that’s where I was going with it. I agree with you that the outcome is different, and they’re not an apples-to-apples comparison. But for me, it’s also like, why do they even need to legitimize this? Everything that needed to be legitimized, people just picked it up and ran with it.
MENON: Yes, I think you’re right to say that the democratic consciousness and certainly a constitutional consciousness is more readily accepted. Again, not as readily accepted, or not in the way that, say, Ambedkar in his last Constituent Assembly debate would talk about Indians having a constitutional morality—not in that way. But at least in the formal modes of participating in a constitutional democracy, of taking up the vote, participating in elections, filing public interest petitions, petitioning the court in the way that Rohit’s book talks about. So that is definitely true.
Part of it, as I think you are suggesting, is just that plans are somewhat more alien to people than the idea that you can vote and you can get somebody to represent you. That idea is alien in its form. Perhaps we take it from other parts of the world. I think the idea that you can have someone represent you and your interests comes more easily to people than the idea of a plan, which is a technocratic body that tells you from high up above what will be best for you in your village.
I think it is also, for that reason, less empowering than the vote. In some ways, what it’s telling you is that you can have plan consciousness, but we don’t really want your input on what the plans should be. Though, as I point out, there are efforts made, or at least there is the fig leaf of it trying to be a two-way dialogue between the people and the planners. I refer to experiments like the planning forums in colleges and in universities.
St. Stephen’s College still has something called The Planning Forum, which I think most people today don’t know, but was set up in the 1950s (along with many other colleges and universities across the country) as a way for people to debate the different five-year plans and aspects of it. And the idea, again, filled with these romantic ideals of—students will debate these ideas presumably in different colleges of Delhi University and Madras University and elsewhere. Then the best ideas will filter up to the Yojana Bhawan [Planning Commission], and then they will possibly take on board the best ideas. Of course, none of that happened.
I think that gives you a sense of how distant the idea of planning as an empowering mechanism is. On the other hand, you do wonder—it is alien, but at the same time, why is it that Lata Mangeshkar is singing in 1956 a chorus that goes “Kamyab hum karke rahenge pan saal ke plan ko”? Why is it that Sadhus are taking up the plan and combining it with “Ramayana” and “Mahabharata”? Again, all to ends that in the end would blow up in the Congress’ face. But there is a way in which it does filter, but it is, as you say, much more forced. It doesn’t happen quite as organically.
Indian Mysticism Meets Planning
RAJAGOPALAN: Now that you mentioned Lata Mangeshkar and Dilip Kumar and the Sadhus, I mean, those parts of the book are just so fun to read. I’m a big Bollywood buff, especially the ’50s, ’60s, so I’ve picked up when these things come up in songs or in the odd movie. The Sadhus, I just absolutely had no idea about it, and how much of the Hindu right wing at the time also bubbled up from socialism. We have this technocratic socialism, the Mahalanobis five-year plan kind. We have Gandhian socialism, which Jayaprakash Narayan and that wing has been thinking through for a long time. Of course, it peaked during the Emergency.
MENON: Kripalani, et cetera.
RAJAGOPALAN: Kripalani, et cetera. Then we have this Hindu Mahasabha socialism-ish thing—I don’t know what else to call it—which is a very different kind of socialism. To me, the most bizarre thing about the Sadhus (and I think you point this out) is they are supposed to be past any kind of material attachment. And they’re not the prototypical person to worry about economic growth and material well-being and modernization, quite the contrary. Talk to me about the Sadhus. And what is this bizarre thing going on in India?
MENON: I found this also bizarre and completely surprising, and I didn’t know anything about it. When Sadhus started turning up in these archival papers I was looking at, I felt like I had to tug on that string. What happens is this, to give your listeners some idea: In early 1956, there’s a meeting at Birla Mandir, this Hindu temple in Delhi, between 50 Sadhus (Hindu ascetics) and members of the Nehru government, including ministers and including the then-minister of planning, a longtime Gandhian, Gulzarilal Nanda.
Gulzarilal Nanda, we know, was a trade unionist who then taught economics for a bit in Bombay, was a Gandhian, was very well respected in the Congress and outside for being extremely upstanding, abstemious, personally unimpeachable in his morality. But also an extremely devout Hindu and a believer in many spiritual causes and in some also, I would say, some kind of obscure causes as well.
This is one of them, in which Gulzarilal Nanda is meeting with these Sadhus in 1956 at this meeting. And it’s a meeting that has been set up by the Sadhus and Gulzarilal Nanda. Curiously enough, Nehru doesn’t have very much to do with it, and it’s a program that really has the backing within the Congress of Gulzarilal Nanda and the president of India, Rajendra Prasad.
Rajendra Prasad, you remember, is also somebody who shares this Hindu conservatism, but a longtime stalwart of the Congress Party, somebody that Nehru was of two minds about becoming the president of India, somebody that Nehru disapproved of—the fact that Rajendra Prasad was present at the re-inauguration of the Somnath temple. Believing not that the Somnath temple should not be rebuilt, but that doing so by the president of India right after Partition was reopening those wounds, given that Somnath had been raided by medieval Muslim looters like Muhammad of Ghazni.
Both Rajendra Prasad and Gulzarilal Nanda are behind this venture, and the venture is to set up an organization called the Bharat Sadhu Samaj, or the Indian Society of Ascetics. The explicit charter for this organization is for the Sadhus to help with the propagation of the five-year plans. As you said, it seems quite mad because Sadhus are meant to have given up a material life. They are meant to have gone beyond the material sphere into the spiritual sphere, but as Gulzarilal Nanda says in one of the meetings, actually, the Sadhus can help be a bridge between the material and the spiritual, between the lok and the parlok, as he says.
To him, the problem with Nehruvian planning, the problem with Nehruvian socialism, the problem with people like Nehru and Mahalanobis is that they did not understand the ways in which the ordinary Indian would understand these ideas and the idioms and the language in which these ideas may best be communicated to the ordinary Indian. To him, that idea needed to include religion. There was no way to go around religion, and the way to do it is to include Sadhus. Interestingly, Nehru is extremely ambivalent about this. In his writings between Nehru and Nanda, Nehru keeps hemming and hawing, saying, “Do we really need to do this? Can we really trust these Sadhus?”
Of course, at the time, if you read the newspapers in Delhi, the newspapers don’t have a very bright view of the Sadhus. They talk about how Sadhus are implicated in all kinds of criminal cases, including kidnapping, molesting women, kidnapping children. In this kind of humorous episode when Nehru’s finally convinced by his minister to address a gathering of these Sadhus, Nehru is literally scolding them. He’s saying that “You guys are rascals.” In some of his writings, he refers to them as scoundrels.
He said that “Some of you are, of course, great human beings, but some of you are barely worth being called human beings because some of you are engaged in pretending to be a Sadhu but using it as a guise for criminal activities.” He says it’s actually very hard to know who the real Sadhu is from fake Sadhus, which leads to another very humorous enterprise in which the Sadhus form a registration drive, by which the Bharat Sadhu Samaj is now handing out identity cards.
RAJAGOPALAN: Card-carrying Sadhus.
MENON: Exactly, so you become a card-carrying Sadhu—which, again, is ridiculous because you think of these men who are usually sometimes close to naked, who have no material possessions, but they’re supposed to carry a card saying that I’m a member of the Bharat Sadhu Samaj.
I was reminded of this recently when I was at the National Archives when I confronted a similar situation, where I was registering in for the day at the National Archives, and a man who obviously looked like a Sadhu also wanted to go into the National Archives. The question that is asked of anyone who is registering is “ID dikhao” (show the ID). They want to see an ID. Of course, the man who came with him said that, ye baba, he’s a baba, he’s a Sadhu, he doesn’t have ID. They wanted an AADHAAR or they want a driver’s license. It put me in mind of this Bharat Sadhu Samaj, which at the time was actually giving identity cards and might have been able to help this poor gentleman who was next to me.
It leads to this strange situation where at Kumbh Melas, the Bharat Sadhu Samaj has a Pandala, has its own Shamyana where they are trying to meld the language of the panch-varshiya yojana, of the five-year plans, with that of ancient Indian Hindu epics like the “Ramayana,” the “Mahabharata.” They are trying to include Bhagwan Ram in the ideas of the dwithiya panch-varshiya yojana, and so it leads to things that you really would not associate the five-year plan with.
RAJAGOPALAN: Austerity, that’s an important bridge. The austerity part that you must sacrifice and build on the savings rate. This can’t be a capitalist material economy. There’s an element of sacrifice. So it’s bizarre how they connect.
MENON: Exactly. In some ways you’re right: They find an organic link point, and that link seems to be that moral improvement involves sacrifice. As part of this Bharat Sadhu Samaj, they are also, of course, propagating against drinking alcohol, against eating meat. But at the same time, they’re saying part of this model improvement is also saving according to what the second five-year plan wants you to, investing in the national bond as opposed to buying jewelry. All these are part of this savings, this sacrificial ethic that is required to be a better Indian citizen/also perhaps a Hindu as well.
The median citizen is a median Hindu, and it leads eventually, of course, to the Sadhu Samaja allying itself with causes that would come to be to the detriment of the Communist Party. As I go into in the book, it would ally itself with the VHP [Vishva Hindu Parishad]. One of the founders of the Bharat Sadhu Samaj is one of the vice presidents of the VHP. By the time the Babri Masjid issue is bubbling up at the same Kumbh Mela Pandals at the Bharat Sadhu Samaj, they’re basically saying that the mosque should come down at Babri Masjid and a temple should be built there. You see this drift from being an organization that was meant to be dedicated to five-year plans becoming just a Hindu conservative organization.
RAJAGOPALAN: I want to come back to the Lata Mangeshkar thing, just to stick with the very fun part of the book, but they’re so informative. How much of the Bollywood involvement was the government elite and the cultural elite having close proximity? You’re all part of the same cultural moments. You do what the government says.
How much of it was forced, explicitly or requested? How much of it was paid for, or how much of it was an implicit threat? The government is controlling all kinds of things. How much raw stock you can buy is limited because you have price and quantity controls. How much of this is coerced, and how much of it is just this was part of the cultural moment, movies reflect society, and then that’s how these things find their way into these songs and films and protagonists and so on?
MENON: I actually found it curious that I didn’t find too much evidence of coercion except for with the Films Division. The coercion there is not on Bollywood as we know it, but on, for example, the fact that before any film is screened—as people of our age know, this went up to the 1990s, that before a film is screened, you will have 10 minutes of sermonizing by the government through documentaries.
You might say that actually some of the documentaries I looked at from the 1950s were quite entertaining because of the fact that the state was the only outlet for lots of these creative artists. Ravi Shankar worked for All India Radio. Lots of these artists were working for the state, and so you did have some very creative output at the time. I’d say that that is just plain old state propaganda aspect. The Films Division puts out these documentaries that might provide some patronage to artists that might not otherwise be able to make money.
Not the Dilip Kumars, not the K.A. Abbas, not the Lata Mangeshkars. There’s so many other artists that are looking for employment, and they can find employment in doing some time with All India Radio or the Films Division, which is the largest documentary filmmaker in the world at the time. In terms of Bollywood and these films that I looked at—say, for example, “Naya Daur,” which has Dilip Kumar, or “Char Dil Char Raahein,” which has Raj Kapoor, Shami Kapoor, Meena Kumari. I think there it is more the aspect that you mentioned, the aspect that this is part of the zeitgeist of the time, that a lot of the artists of that time also belong to the IPTA, the Indian Progressive Theatre Movement Association.
They come from this world in which many of them perhaps are more to the left of the Congress than the Congress is. Many of them had been part of the socialist movement. Many of them had been part of theater societies that were deeply left-wing if not Marxist. For example, Khwaja Ahmad Abbas is a major filmmaker of the 1950s and ’60s, in fact gives Amitabh Bachchan his launch in “Saat Hindustani” later on, so a really big filmmaker. He describes his relationship with Nehru—of course, from afar, and they didn’t meet that many times—but he says that from when he was a youth, it was his lifelong love affair, that he thinks of Nehru as inspiring figure sometimes, who disappointed him because he becomes a politician.
But he talks about the first time that he sees Nehru in person is the time that Nehru’s coming to Allahabad. This is before independence. He jumps onto a train without a ticket with a friend of his, trying to catch a glimpse of this hero who is coming to his town. There is this aspect of this generation of movie makers and film stars who do think of these people and this ideology as broadly what they agree with.
There’s also this rumor that—this story that is probably apocryphal—Dilip Kumar was once offered five lakhs for a film, and that Dilip Kumar said, “No. Instead, invest it in the national plan loan.” The point is not to say that he actually said it. Probably not, but the idea that such rumors go around gives you a sense of the time, that it’s even plausible that someone would think in this way, plausible that a film star would carry a copy of Yojana, to be a brand ambassador of it. I think that also the Chopra family of producers—I also have a quote in the book about how they talk about how Nehruvian socialism was just part of the water that we drank at the time. This is just what we all broadly believed in.
I don’t know how much . . . Maybe there are episodes of the state intervening, but I didn’t come across it. On the contrary, I found essays written by Khwaja Ahmad Abbas, the same director, in Yojana, the magazine that is funded by the government as planned propaganda, in which he has an article titled “Nationalize the Cinema.” He’s actually arguing for something that is much more radical than what the government wants. He says that actually, all these movies, it’s just riffraff. There’s no high ideals, where all these movies have these women cavorting and playing to very base instincts. Instead, we need to have movies that celebrate national ideals, and we can develop an audience for it.
That’s the evidence that I came across, though I’m sure that there are ways in which the government offered inducements, et cetera. For my next project that I’m just doing some research on now, which is on Indian culture, diplomacy and soft power, there you see the way in which Indian film stars and the government interact.
RAJAGOPALAN: Oh yes, Raj Kapoor and Nargis are sent to the Soviet Union.
MENON: Exactly. For example, you see there the power dynamics are actually quite different. It’s actually, I came across letters from ministers writing to Nargis saying, “Nargis-ji, we heard that you are traveling to the United States. Could you please stop in Turkey on the way? Because we hear that you’re known in every village, and we will pay for your fare from the U.S. to Turkey, et cetera.”
The power dynamic there is switched, except when you’re a film star who’s out of favor. Then I found also film stars and different artists, famous dancers and musicians writing to the government saying, “Can I be added to this delegation that is being sent?” Because going abroad was a big deal then and very expensive.
RAJAGOPALAN: Foreign exchange is controlled, right?
MENON: Exactly, yes.
RAJAGOPALAN: If you go with the government, then it’s a completely different gig than if you go privately.
MENON: Exactly, then it is covered for you, yes. In a way, there’s a kind of also give and take that’s happening, in which some artists are also using the government, using the fact that the government wants to promote these arts abroad.
The Carrot and the Stick
RAJAGOPALAN: No, I think you’ve touched on something quite fascinating. The reason, again, I had the cynical view is, for instance, Devika Rani and her husband were given a very large piece of land, which later ended up getting contested because after they died, there was an eminent domain question where the state of Karnataka tried to take the land back and so on.
We know that whether it’s All India Radio or the NFDC, a lot of the people who were in film were given quarters in Delhi. These are not exactly quid pro quos, but quasi. Many people more recently have talked about how the Padma Awards in themselves—or Rajya Sabha membership, for instance, which is technically supposed to be made by the president, but we know that it’s the cabinet that vets that list and so on.
There is this soft—I don’t know if it’s a soft carrot or a soft stick, depending on what form it takes, but we have more examples of the soft carrot than the stick that I can think of. The stick I’ve heard more from, say, newspaper owners. For instance, when I speak with old-time journalists like my grandparents’ generation—who was first with the Hindustan Times, then with The Hindu, Indian Express—they talk about how it was difficult to critique five-year plans because you had to go back to the commerce ministry the next day to ask for foreign exchange to buy newsprint or for equipment to buy a new camera.
This was a complicated relationship. Yes, you could technically critique people, but there were no investigative journalism pieces on the kinds of corruption that took place at the foreign exchange control office or the CCIE, the chief controller of imports and exports. There is something funky going on there. I think it would be a fascinating project.
The reason I also ask is, you don’t exactly bring us to the current moment, but you allude to tying a knot with what’s happening now, whether it is the end of the Planning Commission and the NITI Aayog or various other moments. There is a current saffronization that is happening in Indian culture. Some of this is, it’s quite clear that there is the current dispensation, either the government directly or the political parties that are part of the government, who are explicitly paying and requesting people to tweet on their behalf or supporting certain kinds of movies. Certain kinds of movies are given tax-exemption status.
We also know that there’s a trend of the villain changing a bit. We’re doing a lot more historical characters. The historical characters are now taking a modern nationalist view, very modern Indian nationalist view, when we’re actually talking about Rani Lakshmibai, who had nothing to do with the current Indian moment, was fighting the British for a completely different reason. All that is now being couched in a new Hindu nationalist flavor. Uday Bhatia has this award-winning piece on how the portrayal of religious villains and heroes has changed quite a bit.
Now, once again, I find myself thinking that not all of it seems forced; not all of it is paid for. I don’t think everyone who’s making these movies has sold out. How much of it is because it’s the cultural moment? How much of it is because they think the audience will like it? Because clearly they’re voting for the current dispensation, so probably there’s a market for it, so let’s cash in on that market. How much of it is explicit? Is this just something that we’re doomed toward, whether it’s planned consciousness or Hindu consciousness? Am I reading too much into this longer arc, or do you see some clear parallels?
MENON: No, that’s really thought-provoking. Let me first address the corruption question. I don’t go into corruption explicitly, but it does make me think of, for example, when you talked about that you know of people who ran newspapers who said that it was hard to criticize the government on certain aspects because you depend on the government so much. One is that I would say that that might be so, but I still think that perhaps newspapers were braver then than today because when you read the newspapers of the time, they still carry a lot of critical coverage about the second five-year plan.
Whether it’s The Times of India, the Hindustan Times, The Hindu about the shortfalls in the planned targets, the Bharat Sadhu Samaj, is a point of—as I make in the book, and I provide many cartoons just mocking Nehru openly, mocking Gulzarilal Nanda, saying that they’ve lost it to engage with these Sadhus. Many critical pieces, they’re carried by foreign economists, critiques from Rajaji, et cetera. Even if there was that pressure, which I completely believe, I think that we should be proud that at least many newspapers were still confident enough and independent enough to still carry that, despite the pressure that might have been exerted upon them.
Plan Economists and Dissenters
MENON: I also think that some of the pressure also comes from where the median opinion lies. That was brought to mind for me by a quote that I read by P.R. Brahmananda, who, as you know, is in one of the famous Bombay school economists, who writes—and I quote in the book that, during the debates for the second five-year plan between 1954 and ’55—arguing against the broad ideas of import substitution and the heavy industrialization model that Mahalanobis was propagating. That the reason there was only one dissent (by B.R. Shenoy, famously), and the reason that Brahmananda himself did not file a formal dissent, is because it was seen as almost anti-national. That’s the phrase he uses. It was seen as almost anti-national to be against it.
RAJAGOPALAN: Exactly. When I read that in the book, that’s exactly what made me think about the current moment.
MENON: In fact, I think that it’s not necessarily pressure that’s always coming from the government. Because again, in the footnotes to that very same anecdote, I write that Brahmananda also, in that same interview, writes that it was not Mahalanobis who was doing this. Because he said that he had actually a very friendly exchange of correspondence with Mahalanobis. He thought that Mahalanobis was actually quite open to his ideas, and actually, he describes him as a brilliant man with fresh ideas. It’s not necessarily coming from the government, but it’s this general sense that you will be attacked as being hopelessly right-wing, as being reactionary if you are against the five-year plan.
I find it quite instructive when people that we now associate as critics of five-year plans write about what they thought of at the time. When you look at Jagdish Bhagwati and what he writes about the five-year plans, he writes about how he was swept up in the moment in the 1950s and early 1960s. Manmohan Singh also says that, and Bhagwati says that “I had drunk the Kool-Aid.” To be against import substitution was to be hopelessly right-wing. I think that you get the idea that if someone like Jagdish Bhagwati, who today we associate with a very different kind of economics, could himself feel that, you get a sense of how mainstream the idea was.
As I.G. Patel says, that the basic idea of the second five-year plan came to be fused with a kind of anti-colonial nationalism. The idea that this is what we’ve longed to do for decades while fighting for independence, and we finally are getting a way to do it. To argue against import substitutions, to some who are extremely intolerant, seemed like an argument almost for neocolonialism, to allow these Western powers to once again take a foothold. Many of these people, of course, changed their minds later. As Jagdish Bhagwati says, that perhaps one of the unfortunate things for India was to have brilliant economists. That India’s curse was having brilliant economists.
RAJAGOPALAN: Yes and no. I’ll tell you where I am on the professional economists as a community. There are two things simultaneously going on. One is, of course, you’re right: There’s a median individual, there’s the median news article and then there’s the median economist. Then where do you lie in these things? The moment you’re too far from that median representative person, you get labeled in a particular way. That I completely understand, and it may not be a malevolent action from the state. On the other hand, there is something going on, even if it’s not deliberate, with the government control on higher education, right?
RAJAGOPALAN: All the original statistical departments are very much set up with the idea that they will execute on the survey methods of Mahalanobis. In fact, he’s the one who helped set them up. Every single economics department in the country is supposed to produce people who can help with the plan. They are not designed for a kind of intellectual freedom or a fertile environment where a lot of criticism can come. I’m not saying they were designed such that there could be no criticism, but it was quite clearly designed for a particular purpose.
We were supposed to produce geography graduates for surveying when we had the British colonial government because that’s how they collect land taxes. We’re supposed to produce statisticians, we need X number of statisticians for the plan, we need Y number of engineers for the plan, for heavy industry. There is a kind of groupthink which is happening because the government is in control of higher education in a way that doesn’t happen, let’s say, in the U.K., where even though in the ’50s there’s this major planning ideology—I have personally written about how economics has completely moved away from laissez-faire at the turn of the century and so on.
Because Oxford and Cambridge existed so long before the planning moment came, or before the Labour Party got into power post World War II. Of course, there are people who are in favor of the plan, there are welfare economists, there are Keynesian economists, there are Fabian economists, and there are out and out people working on Leontief input-output matrices. There is a healthy debate, and it is no surprise that when many of these economists left to go get an education abroad, it’s not that they diametrically changed their mind, but they do start getting exposed to new ideas.
RAJAGOPALAN: When I was a student at Delhi University—which was not that long ago; it was post-liberalization, this is 2001 to 2004—in our comparative economics system syllabus, for instance, I didn’t know it was called the socialist calculation debate, by the way. I didn’t know there were two sides to the debate; we only read Lange and Lerner. We didn’t read Hayek and Mises. I remember when I came to graduate school, one of my colleagues now, and my dissertation adviser, Peter Boettke at the George Mason department, said, “How do you know this Lange-Lerner stuff so well?” I was like, “That’s all I know.” Mises was in a footnote in one of those papers that we read.
There is a certain groupthink that is happening, maybe not because they want to control expression, but because they are, again, planning to produce economists for a very specific purpose. There is a loss in an intellectual culture in economics because of it. The moment we start liberalizing and economists start going abroad, you see a big switch taking place.
MENON: If I may offer an alternate reading of this, maybe from a different disciplinary lens on this. I think that in my reading of the sources, it didn’t seem like there was that level of groupthink necessarily because of an education that was, in a sort of propagandistically way, trying to do that. By which I mean that there is much less justification for you not to have been taught other schools of economics in 1990 as opposed to 1950 when the median position in economics has changed, right?
MENON: Whereas in the 1950s—I’m just looking at some quotes that I came across—I was surprised, and these are figures that you and your audience will know. Lionel Robbins, no friend of socialists, says that planning unfortunately is “the grand panacea of our age” and that decolonization and planning are seen as structurally reinforcing each other. That this is the problem in these decolonizing countries, that they think of planning as automatically being the right thing to do.
Peter Bauer, again no friend of socialist economics, also says that the problem with the second five-year plan was not that India was a kind of oddball off on its own, but that the second five-year plan largely reflected the then-dominant opinion of Western development economists and that of current economic orthodoxy in amongst development institutions in the West.
I would say that, in some ways, it’s not that Indian education is producing, but that there is a global zeitgeist in which this is seen—even within development economics, which is then a fledgling discipline by itself—that, in that discipline at this time, this is seen as what is appropriate for poor decolonizing nations. It’s why I think that you have people who, in a sense, recant. People who change their mind on these ideas, but still up to the 1960s have these ideas, like Manmohan Singh, like Jagdish Bhagwati, Suresh Tendulkar, T.N. Srinivasan, Amartya Sen.
All the people are quite independent-minded, but when they go abroad, in some ways, those ideas are only reinforced because who do they study with? They study with, or they interact with, people like Ragnar Frisch, with Jan Tinbergen, with Joan Robinson, with Galbraith. In some ways, these are not idiosyncratic figures. These are some of the titans of the field at the time.
That’s why I’d say that I think there’s much less justification for you not having been taught the two sides of the socialist calculation debate in the 1990s as opposed to the 1950s, it being much more the median opinion. That’s the sense that I get from my reading here.
RAJAGOPALAN: Yes, no, I agree with you. Yes, I definitely agree with you. By the turn of the century, laissez-faire was gone. By the 1950s, planning was very much mainstream, especially for developing countries, where import substitution and a somewhat planned economy was the thing to do. Only developed countries should have free trade models and so on, so that’s clear. None of these people would have been called anti-national or extremist in the departments there. That’s what I was alluding to when I said groupthink.
It was more that, in India, if you were a little bit off this kind of median opinion, you would immediately suspect either not good enough, or to be sidelined, or just plain anti-nationalist. Whereas none of the people who were away from the mainstream abroad, even the Indian economists who moved there and then moved on to other things, none of them would be called anti-national or any particular personal intention would be attributed to their intellectual thinking in a way that happened in India.
And that seems to be a trend even today. You don’t support the government development model, and you’re now anti-national. We are no longer in a world where we don’t have any private colleges. There’s something going on in India where this seems to be a very long-term trend.
MENON: Right. No, it certainly is an affliction that Indians suffer, and I hope that we find a cure for it, but I don’t know if it’s necessarily an exclusively Indian thing. I don’t know if that should make us feel happy or sad. For example, in the same time in the 1950s, McCarthyism is rife in the United States, right?
MENON: You have Hollywood producers, you have actors, anybody who has anything, who’s ever attended any sort of socialist or a social democratic event, is branded a communist and anti-national, as a traitor, and is targeted by the House of Un-American Activities by McCarthy, in some ways, right?
RAJAGOPALAN: It’s true.
MENON: Literally, they have been called traitors. I was at the archives these last few days looking at the Vijaya Lakshmi Pandit papers, who was then the ambassador in Washington, and she talks about this mania. She’s saying many of her friends are being accused and being hauled up in front of these committees. She’s like, “We hang out with these people. They’re not communists. We’re fighting communists at home. These are not communists. These are wealthy people, but they’re being hauled up because they do not—.” I don’t know if it happens to professional economists, but certainly in society in general, even a free capitalist country, a nonsocialist capitalist country like America, I think, can suffer this affliction.
India’s Centralized Executive
RAJAGOPALAN: We’ve talked about how this plays out in popular consciousness, but there is a very technical aspect to planning. There’s literally an arithmetic exercise on what are the total number of resources. Like, how many bicycles does India need? It all starts with, this is our total steel output. This is how much we can invest in heavy machinery and steel production. Now, out of this steel production, we need steel to make glasses, and we need steel for tables and chairs, and we need steel for bicycles, and we need steel for heavy machinery.
Now, we’re going to specifically allot. And these allotments were very specific. You are allowed to make 500 bicycles this year, and if you exceed your quantity, then the inspector would come and make you pay a penalty. If you thought you had demand for more than 500 bicycles, you had to go to the commerce ministry and get an expansion permit. There is a very technical statistical exercise, which is how the professor gets involved.
On the other hand, there is political decision-making for any kind of economic policy that needs to be done in the country. You’ve talked, in the book, about how there is this clean split that takes place between political decision-making and this kind of technical expert-driven decision-making.
One of the things I picked up on is, a consequence for India seems to be a tremendous centralization of power in the office of the prime minister and a tremendous weakening of the cabinet, because the way this was originally designed was that the Planning Commission became so important that every single ministry had to actually follow the plan.
This goes back to the Hayekian critique. This is why Hayek says that you can’t have planning in a democracy because this can’t be done by consensus. You need to have a plan, and everyone needs to agree to that plan because it’s literally numbers that have been fixed for inputs and outputs. In the process, you talk about this, how you have disgruntled finance ministers, other ministers, people are threatening to resign. Mahalanobis is writing letters about how he’s feeling very dejected and disappointed, about how he’s doing this wonderful thing and people just don’t seem to get it.
Is this the long-term cost we’ve paid in the Indian democracy and as a constitutional republic, that we have become so centralized and the prime minister is so important? That’s been both good and bad, depending on who the prime minister is, of course. We have a very weak cabinet. We don’t have a British cabinet system where cabinet members now resign or don’t toe the line, or they can topple the government. There is something funky about Indian parliamentarians.
MENON: Yes, I think that you’re right then. I think that the planning project gets so much of its oomph from Nehru. The fact that the person who believes in this project and is willing to back it so wholeheartedly also happens to be the biggest vote-getter in the country gives it this kind of legitimacy. In some ways, Nehru never says it explicitly, but the final proof of the fact that when he says it is democratic, is the fact that he says, “You keep voting me into power.” His popularity is really more than that of any other person in the Congress Party, certainly after Patel dies. The fact that he’s backing these plans gives it a popular legitimacy in electoral kind, which we might question.
Technocratic Planning and Political Legitimacy
MENON: Let me try address this in two ways. One is to just talk a little bit more about this endeavor for statistical exactitude that a plan entails. In my book, I argue that that is what really gives a fillip to this data infrastructure because one of the side effects of that is that India needs to establish national income accounts, the central statistical organization, the National Sample Survey. And that’s what brings Mahalanobis to the center of policymaking in India.
I found this quote by Milton Friedman about Mahalanobis quite arresting. Milton Friedman writes about the time that he comes to India and that he meets Prasanta Chandra Mahalanobis. He says that the professor impresses him as a person; he’s a very brilliant man. He says that there is a reason why people who are mathematically gifted at a young age tend to drift toward planning. He says the reason is that people who are gifted in mathematics at a young age seem to require that they need to find solutions that are black and white from a very young age. They’re not willing to admit that there is any gray in between.
Milton Friedman then quotes Adam Smith to say that the planner thinks of human society as a chess board upon which the planner can move pieces, but forgets that every piece on this chessboard of humanity has its own agency. He says that this is a problem with a person like Mahalanobis, that he thinks that this is a problem of physics. That’s something I write about, that he does not think that there are any political tradeoffs to be made. He thinks that this is entirely a problem of mathematics and physics, and you just need to find the mathematical solution to it. I think there’s this willingness to jettison politics in a way that I think can be sometimes dangerous.
In terms of whether allowing for this kind of technocratic planning erodes political legitimacy, in terms of a cabinet’s power being eroded and a prime minister becoming too powerful, I think that under Nehru there were some guardrails because Nehru was particularly deferential toward this kind of procedural democracy. And this is something that other scholars have written about, including Ramachandra Guha, Sunil Khilnani, et cetera—that because he knew that he was the first prime minister, he put a lot of attention to, for example, turning up to parliament, sitting during opposition leaders’ speeches, responding to their questions, et cetera. There was some deference to other members of the cabinet.
Yet, as you point out, or perhaps as you were alluding to, India’s finance minister, John Matthai, resigns, saying that the Planning Commission has become a super cabinet and that it is superseding the decisions of the cabinet. On the other hand, you do see that—especially after the relative failure of the second five-year plan, you do see, in some places, antibodies in the system acting up. You do see, even within the Planning Commission, people like V.T. Krishnamachari, the deputy chairman, Tarlok Singh, the secretary of the Planning Commission, pushing back against Mahalanobis. You see the finance ministry, especially, always being in a tussle with the Planning Commission.
This is something that causes Mahalanobis real angst. He’s writing to Nehru saying, “I’m going to resign if this continues,” especially under finance ministers like T.T. Krishnamachari, who do not believe in as powerful a Planning Commission, after him under Ashok Mehta, after Nehru dies, who makes quite significant changes to the powers of the Planning Commission under Morarji Desai.
Another finance minister who is not really so keen on the Planning Commission being this powerful under Lal Bahadur Shastri, the prime minister that, in some ways, Nehru had handpicked as his successor. Again, the Planning Commission’s powers are trimmed, and you see this in a variety of ways. I won’t go into the details in which the Planning Commission’s powers are trimmed. There, in some ways, you are seeing other wings of the government pushing back.
I think that this push and pull is in the favor of the Planning Commission and somebody like Mahalanobis in its most strident phase in the early 1950s, which the first five-year plan was seen as a success, partly just because India had very good sterling balances. It had very favorable monsoons and crop yields.
In the first two years of the second five-year plan with the foreign exchange crunch, then after that, wars with China and with Pakistan, and with two failed monsoons, things really changed for the economy. That, in a sense, becomes the opportunity for people within the Planning Commission and outside, such as within the cabinet and the finance ministry, to push back and to reclaim some of the powers that the Planning Commission had.
I think that there was, in some ways, a tussle, but you are right that when Nehru was in his pomp, he was able to push through a lot of these powers. It was also helped by the fact that those were the most successful years of the plan in terms of just raw economic growth. As a critic of planning like Bibek Debroy writes, industrial capacity did increase substantially during this period.
RAJAGOPALAN: Yes, and Nehru, in his first seven, eight years, economic growth is 3.5%, 4%. Whereas for 40 years before that, it was 1%, right?
MENON: Less than 1%, yes.
RAJAGOPALAN: India was essentially a stagnant economy for most of the 20th century until Nehru comes to power and says, “We need to build this massive capacity.”
MENON: As Pulapre Balakrishnan points out, if India had done a better job perhaps of stemming population growth, the real growth might have been even greater, right? That a lot of that growth was eaten up by a very high population growth as well at the time.
RAJAGOPALAN: Yes and no, because we have countries which had planning and lower population densities, which also didn’t develop. I think now on this, the writing is very clear on the wall that free trade and being part of the global free trade movement does increase the size of the pie and provides a massive amount of wealth and increase in GDP and growth. The things that are praised about planned economy is things like they made this massive investment in universal education. They have very high female labor force participation because communism encouraged that, or they developed good healthcare capacity and had lots of nurses or something. India failed on that count too, but that’s a separate matter.
MENON: Yes, on universal education and healthcare.
RAJAGOPALAN: Yes. That’s a separate matter. That’s a failure in the kind of plan that India pursued. In terms of GDP growth, the difference between the free trade economies and the import substitution/varying degrees of planned economies, it is just startling. The moment China liberalizes and India liberalizes—given what you can do when you have a very large population if you actually unleash private enterprise, even domestic markets, not just international trade—that was the game changer.
Planning and Import Substitution
MENON: I’m curious to know what you’d say about this debate that sometimes comes up about, within different types of planning regimes, between import substitution and export-led planning regimes—like, say, South Korea in the 1960s and ’70s that Vivek Chibber, Atul Kohli have written about, or even planning regimes that become export-led, like China from the 1980s onward. Do we point then at planning or the kind of planning that is adopted?
RAJAGOPALAN: Both. I’ll elaborate a bit. A lot of people have talked about how in S. Korea there was industrial targeting, and there was some state-led development. On this, curiously enough, whether it’s Anne Krueger or Arvind Panagariya, the trade economists who’ve gone through the empirical evidence, lots of people at the World Bank—they show that the industrial targeting that Korea did, those industries never really took off. Most of the industries that did take off are not the ones that the state was heavily subsidizing and paying attention to.
For instance, there’s a point in time when in South Korea, the biggest export is human hair. That is not something that the government is targeting as a heavy machinery growth. There are very few successes of industrial planning that we’ve seen. Taiwanese semiconductor industries is one of them. There are a few things that we can point to, but there are more failures than there are successes, at least from the empirical literature on free trade and industrial targeting.
The Indian situation is slightly different in the following sense. Now, if you’re talking about a closed economy and import substitution and very high tariffs, that is a tax on domestic consumers and foreign producers. India, in addition to that, also had this license permit system, and this comes directly from Mahalanobis’ plan. There is a quota that each producer is supposed to produce, and they can’t cross that. There is a price control. That is a tax on the domestic producer and the domestic consumer, in the sense that you can imagine a country which didn’t have this internal control system, which only had very high tariffs, but at least they did well in the domestic market. They didn’t compete in the global market.
Then when you change the tariff structure, maybe your domestic producers became competitive, and then they could compete with the global producers the way it happened in Taiwan or South Korea. In India, the domestic producers were always hobbled. It was always like they were running the race with one leg tied or on crutches because there was a domestic massive tax that was imposed because of the permit raj. I think that is where a very large part of the difference is. This, of course, comes directly from the planning culture.
They are misallocating resources, as most critics of planning allude to or argue is going to happen. Let’s say your steel production is X number of tons, and now, given the steel production, you have planned priorities, heavy industry is going to get so much. You can only produce, say, 2,000 Bajaj scooters per year. Now, we know that between population growth and between pop culture, the demand for Bajaj scooters is like 10X that, but you can’t expand. So they keep going back to the government. The government doesn’t give them an expansion permit. All this is a matter of record.
What happens? The price of Bajaj scooters starts increasing, but the government cannot allow a capitalist to profit from a shortage that was created by the plan in the first place. Then what comes after that? Price controls. The price controls are a natural consequence of the quantity controls, which are a natural consequence of planning exactly how many tons of steel you’re going to produce in the economy, and so on, so forth. Now that you’ve restricted both price and quantity, there is no way that if you suddenly opened up the economy and liberalized and opened it up to the world overnight, these industries are going to be able to compete with the rest of the world because they never quite developed the capacity to do so.
I think this was one major difference. The other major difference is India punished small-scale industries and cottage industries by having that crazy reservation list. There were certain cottage industries that were only reserved to be small. There was no incentive for any capital investment to enter those industries because you couldn’t scale and you couldn’t really profit, which means India never quite developed textile, leather, shoe manufacturing, the sorts of things that you saw coming out of the rest of the Asian economies.
I think you are right in that, yes, is it just any planning, or is it the Indian kind of planning? I think most planning will hurt GDP growth in some shape or form, but the version that India pursued, that converted into this license Permit Raj, it just really devastated and imposed a massive tax on Indian private enterprise. I don’t know if that answers your question. That’s how I think about that problem.
MENON: Yes, that’s very helpful. As the historian, what I found very interesting about planning is that I think the common assumption is that Indian industrialists at all times would have opposed planning. But again, you go back to the 1930s, in 1934—
RAJAGOPALAN: No, they would support it. It benefits them.
MENON: Exactly. I think that this is something maybe your listeners don’t know: that in 1934, G.D. Birla, one of India’s foremost capitalists, is making a plea for planning at the Federation of Indian Chambers of Commerce and Industry, saying that we need to have the state involved. In 1944, Birla, J.R.D. Tata, Lala Shri Ram, et cetera, fund the publication of the Bombay Plan, which is again less socialistic than the Congress’ planning, but it still has the state owning large swaths of the industrial setup, and curiously and very self-interestedly protects it from foreign competition, right?
MENON: In some ways, in the ’40s and ’50s at least, it served the industrialists to have first movers’ advantage and not have to compete with any outsider and, therefore, basically be inefficient and yet very profitable.
RAJAGOPALAN: Exactly, yes, and they really feel the bite only when Indira Gandhi comes in and then willy-nilly starts nationalizing stuff.
MENON: Exactly, and this is something that Bibek Debroy also writes about. Yes, the license Permit Raj really locks in in the ’70s onward, late ’60s maybe, when bank nationalization happens, LIC gets nationalized, all these other things happen.
RAJAGOPALAN: There’s a lot of discretion, right? You can literally lose your entire life’s work overnight, as it happens with banks and so on. I think there is some change of mind. Even today, I was having a conversation on the podcast with Naushad Forbes, who’s written this wonderful book, and he was leading CII at one point in time. And even now, Indian industry is extremely protectionist because it benefits them.
I constantly ask him, why aren’t they saying, “Hey, we need to liberalize, we need to build ports, we need to have better infrastructure so that we can be more competitive with the global system rather than asking for these imports”? He said that’s way harder. It’s just easier to ask for tariffs. That’s a much easier ask. Then that, of course, imposes a huge tax on the Indian consumer, especially the poorest people, right? Because things are getting more expensive.
Attitude Toward Experts
MENON: If I may just go to an earlier question that you asked, which I didn’t answer but I wanted to, which is the connection between this supercharging of prime ministerial power under planning and where it leads us today with the PMO that’s also extremely confident and extremely powerful. I think that you’re right that in some ways there is this parallel, though Modi and Nehru would hate the comparison that they do so mirror each other’s in terms of being very powerful prime ministers. Perhaps an Indira Gandhi in between is a similar person.
I think the difference, ironically, is that under Nehru there is a deference, some might argue an excessive deference, toward technocracy, whereas it’s the opposite today. It’s not to say that the deference to technocracy always leads to good results, because as you’ve argued that planning has many issues. But it is within the mainstream of what economists think, whereas something like demonetization is the opposite of that, right? It’s something that almost no professional economist is willing to put their name endorsing, right? It’s something that is seen. You can have very powerful prime ministers but with very different impulses with regard to technocracy.
RAJAGOPALAN: I think even Indira Gandhi was probably not to the same extreme as Modi, where there seems to be a suspicion of experts and technocrats. But with Indira Gandhi, she just thought they were dispensable, right?
RAJAGOPALAN: I think Nehru had a genuine regard for certain kinds of expertise. I think that’s a personal trait. It’s curious you mentioned Modi and demonetization. I have written about Modi in newspaper columns, and the way I described him is using that exact Adam Smith quote that you just gave from Milton Friedman, which is things like demonetization, things like a botched-up initial GST [goods and services tax]—these things suggest that he very much thinks of individuals as chess pieces that can be moved around, the COVID crazy lockdown announcement.
These are things that are very technocratic, in a sense that it’s all coming from one person’s mind, and they think that individuals don’t have agency. They’re going to behave in this very robotic or very inanimate way. I think that is something that is very common. Maybe not between Nehru and Modi, but certainly between Mahalanobis and Modi, which is another parallel most people would not draw. I think that is definitely a parallel that I see.
Of course, you’re right. There’s a tremendous divergence on where the expert advice comes from. In one sense, we were talking earlier about how there’s political decision-making and technical decision-making, right? Or economic decision-making by policymakers. Nehru and Mahalanobis were on one extreme of that, and it almost feels like the pendulum is on the other extreme when it comes to Modi, right?
RAJAGOPALAN: Here, it’s like, okay, there is really just no room for technical expertise. Look at how they botched up everything in the past and they created central plans.
MENON: Yes, and there’s also a suspicion of expertise, right?
RAJAGOPALAN: There’s a suspicion of it.
MENON: There’s a suspicion of expertise and experts as a class, because part of this right-wing populist movement, I think, across the world is that these technocrats and these experts belong to a certain privileged group—which they often are—and that they have led us astray. Therefore, in a sense, targeting them becomes a way of buffing your populist credentials, of showing that you’re with the people.
RAJAGOPALAN: Yes and no, in the following sense: that when it suits them, they also like to allude to experts, except that they are their own experts.
MENON: Right, yes.
RAJAGOPALAN: Right? I do think that what’s going on, and I could be wrong, is that they don’t want experts to be above the political decision-making. They want the experts to be deferential to the political decision-making. Whereas when it came to economic planning and many other parts of the economy like, let’s say, the space program or something like that, the view was always, the experts know what they’re doing. Our job is just to allot the budgets or to provide the plan priorities or something like that. We are not the people who are actually going to be building this out.
I think that is a major switch, because if you look at it, now there is a generation of right-wing historians, and a battle is being fought in the supreme court sometimes on these things, right?
MENON: Right. Yes.
RAJAGOPALAN: Now there is a race to credential people who are saying the things that they would like, right? I think there is a bigger backlash against credentialism and elitism than there is with expertise. I think that’s how I see this playing out. Again, we’re in the moment; it’s very difficult to judge it.
RAJAGOPALAN: Maybe 10 years from now when we’re having this conversation, we would see a completely different pattern, and I would go another way.
MENON: I think in some ways it is good to question expertise. It is good to question credentialism and just having fancy degrees, et cetera. I wish that that critique would then go to, well, instead of all this knowledge being held by this narrow class, let’s actually invest in public education so that everyone can potentially be an Amartya Sen or a Jagdish Bhagwati.
Instead, it is that we need to dismiss all of that and that entire culture and have our own people. There would be another way in which you could sort of say that this should be a moment in which, yes, upper-caste elite people have dominated these positions, and so we need to have ways in which pathways for other people to be the next Mahalanobis or the next Manmohan Singh—that would never be set by this government, but the next sort of rock-star economist or whatever.
I think that instead it has become that all people with those signs of credentials are seen as suspect. Unless we have our own cadre of people that go through these institutions, only then can we trust them.
RAJAGOPALAN: Again, yes and no. I think because it also depends on to what end, right?
RAJAGOPALAN: For instance, I agree with you that we need to have policy that is based on a lot more consultation and consensus through the democratic process. On the other hand, should there be a democratic process to figure out what inflation we need to target? Absolutely not, right?
MENON: What I meant by democratizing was not that you have an RBI governor who does not have expertise.
RAJAGOPALAN: No, but I’m saying that’s what they mean. I’m not saying that’s what you mean.
MENON: Yes. Instead of what they’re doing, it could be that you democratize it such that hundreds of millions of Indians are able to be in position, such that they have excellent Ph.D.s in trade policy and monetary policy, such that you have a candidate list of hundreds, as opposed to having to cherry-pick.
RAJAGOPALAN: My suspicion is even if we have that fantastic list of homegrown Manmohan Singhs and homegrown Raghu Rajans and Viral Acharyas, if they are for a more independent RBI and for trimming the sort of spending problem that the finance ministry has and so on, they would not pick those experts. I think it’s very much a question of the experts need to be deferential to the political decision-making, which doesn’t always work well in a system where we like checks and balances, right?
RAJAGOPALAN: Where we like an independent judiciary, where we like an independent central bank, where we like the cabinet to push back on the power of the prime minister or we like a bicameral legislature to hold the cabinet in check. I think that’s where I see this fundamental tension, and India on all margins is just moving further toward centripetalism. We set the stage for this very early on with the British government, where they pretended 300 people could rule the entire country.
It was centripetal for a reason, because everything was being run by Whitehall, and we seem to have continued that. And now, of course, the groups that wish to weaponize it and capitalize on it are always going to do it. We’ve had Indira Gandhi do it. We have a new moment when the Narendra Modi’s government is going in that very similar way.
But whether it’s the finance commission—I can think of so many Indian institutions where this is a problem, like fiscal policy and recommendations. It’s a very technical question. It actually does require calculations, maybe not like Mahalanobis, but quite similar. And then it’s a very “my guy versus your guy.”
MENON: The National Sample Survey is another example, right?
RAJAGOPALAN: Yes. I actually really want to get to that, because if we complete the conversation without talking about the National Sample Survey when it comes to this book, I think the readers are just going to kill me. You’ve, again, talked about the Sample Survey as this wonderful merging of India being on the brink of world-class expertise.
P.C. Mahalanobis has been invited to be one of the royal fellows. He’s not just writing the second five-year plan. He’s one of the foremost statisticians in the world, is very, very well regarded. And he’s simultaneously been drafted into this nation-building project in the ’40s by Nehru when the Congress is working toward a postcolonial moment, and the National Sample Survey is bang at the center of this whole thing unfolding.
Can you walk us through why is that so important to the development planning system, other than, of course, the fact that we do need numbers? But more generally than that, what is going on with the NSS surveys? When I was reading those sections, it’s very reminiscent of, like I said, Sukumar Sen setting up India as a democracy. It’s literally these surveyors, there’s so few of them. They can’t have sampling error. It’s a massive country with 450 million people. And they are also, like Sukumar Sen, traveling by elephant to these far-flung places to actually get a sense of what people are eating and formulating the questions.
It’s the best in the world. It’s emulated by everyone else. Even modern-day UN, World Bank figures, everything we get from Africa, they’re based on the Sample Surveys that Mahalanobis set up. What is it about the National Sample Surveys that are so important for the Indian democratic and nation-building exercise?
MENON: The National Sample Survey in some ways, I think, crystallizes the different ways in which Mahalanobis was plugged into Indian nation-building from the 1950s onward. As you said, Mahalanobis, I think that we almost remember him too much for the second five-year plan. If he never had anything to do with Indian planning, he would still be, I think, known as one of India’s foremost scientists of that period. He was, but he was—
RAJAGOPALAN: I think he would be more revered—
MENON: Perhaps even more revered.
RAJAGOPALAN: —because the second five-year plan was the disaster.
MENON: Yes. He would be the 11th Indian to be inducted into the Royal Society in England. The other people, including Srinivasa Ramanujan, some of India’s most famous scientists.
RAJAGOPALAN: Also his contemporary.
MENON: Exactly, also his contemporary. He used to go on some long walks on Sundays in Cambridge with Srinivasa Ramanujan. And so he was one of the foremost scientists of India, one of the foremost statisticians in the world. Edward Deming, one of the great statisticians of the 20th century, says that no statistician ever had as much influence on their profession as Mahalanobis did. He is behind India’s national income accounts. He is behind the setting up of the Central Statistical Organization. He runs the National Sample Survey. He sets up ISI [Indian Statistical Institute] in 1931. He made Sankhya a world-leading journal of statistics in 1933.
RAJAGOPALAN: Which is based on Biometrika, which is Karl Pearson’s journal that he gets inspired by.
MENON: When the UN decides to have a statistical commission, he’s part of the first meetings about it. In the 1950s, he’s the chairperson of the UN Statistical Commission, numerous times nominated both by the USSR and by the Americans. Again, he’s just considered across the board as one of the leading people in this. As Angus Deaton says, where Mahalanobis and India led, the rest of the world has followed. Even till today, Nobel Prize-winning economists acknowledged that Mahalanobis played this very pioneering role.
I think that is one aspect of Mahalanobis’ or the professor’s career, and I think that the question for many has been, how does he go from statistics to economic policy? One argument that’s been advanced is that it’s all down to a friendship with Nehru. I find that is a really unconvincing explanation, because firstly, Nehru—again, as someone who spent a lot of time reading through his papers—he’s not someone who has many personal friends, and of the acquaintances he knows, he knows many economists. Why doesn’t he just get a regular economist to be—
RAJAGOPALAN: Or Tarlok Singh, who he is so close to.
MENON: Or Tarlok Singh. Exactly. Yes.
RAJAGOPALAN: Right? Who also is part of the first five-year plan and so on.
MENON: Exactly. Yes. The thing with Mahalanobis is that he has this eminence in a scientific domain that comes to be seen as essential for centralized planning. This becomes clear from the late 1930s onward. It’s recognized by Bose, it’s recognized by other members of the National Planning Committee from the late 1930s onward. It’s why, when Nehru meets with Mahalanobis in the 1940s, he’s meeting Mahalanobis after having gotten complaints from many members of the National Planning Committee that, well, we have to write these reports on different aspects of—
RAJAGOPALAN: Yes, new data.
MENON: —the economy, and we’re in the dark. We have no data on this. In some ways, Mahalanobis steps in at the opportune moment. It’s the meeting of an extremely ambitious and industrious personality with a moment—
RAJAGOPALAN: An institution builder.
MENON: That’s very important. And someone who’s built this institution at a time when India has very few homegrown institutions that are seen as having international eminence, genuinely seen as a place where people would come to learn cutting-edge techniques on large-scale sample surveying. At a time when India doesn’t have very much of that, this is a person who’s built it with very little government help and so is seen as somebody who can do these quite amazing things.
I think it’s the merging of this moment where an institution builder and a person with domain expertise meets a rising acknowledgment that centralized statistics will be important for any kind of centralized planning. I think that that’s what leads to him becoming a part of the Planning Commission.
RAJAGOPALAN: I think you’re absolutely right.
MENON: I’m glad.
RAJAGOPALAN: I’m not big on, oh, these people were friends and, oh, Nehru liked Laski and G.B. Shaw, so India went Fabian. I think these are great stories we like as folklore, but they’re not very sensible analytical explanations. Why India turned Fabian has a much deeper history, why Mahalanobis became as important for the Indian economic policymaking world. I think you’re completely right on the structural explanation.
Data and State Capacity
RAJAGOPALAN: Another thing I would add is the British government—now we know that in addition to the extractive policies, there was just a hopeless level of neglect when it came to local investments. And we know now from the economics literature that there’s a difference between British-run parts of India versus those that were run by the monarchs. Also, the difference between, say, zamindari areas and ryotwari areas—where the British are setting up their own local offices to collect tax revenue, there’s better data collection. Even till modern day, there’s better state capacity from something that was set up 200 years ago.
MENON: My colleague Lakshmi Iyer has a—
RAJAGOPALAN: Exactly. Lakshmi Iyer is the pioneer on that paper, and Abhijit Banerjee, of course. I find that this also coincides with the ’40s and, in a sense, the Bengal famine, when there’s literally no data on how many people are starving, how much food are we producing, how does it need to be directed. Can we afford to export this food? In a sense, I feel like the nationalist movement in terms of there’s this extraction, there’s this oppression of people, with the fact that there is just this ridiculous level of disregard for local state capacity-building and investment, because if you build the state capacity, it can collect the data.
Then it’s a question of collating it, but that’s completely missing in India, and it seems like that went hand in hand with the needs of the planning exercise, which comes much later. I feel like your structural explanation not just makes sense for the Nehru-Mahalanobis interaction, but it also fits in quite well in the longer arc of history, if you think about it from the early 20th century.
MENON: Absolutely. I think that the Bengal famine, very often we overlook that and how traumatic—
MENON: The estimates are up to a million or more of people die. In some ways, it’s a forgotten holocaust because it’s not done by violence, though there’s arguments about how much the British could have averted that. Certainly, we know about Churchill’s extremely insensitive attitude toward dying Indian peasants. Mahalanobis lives through this. The Indian Statistical Institute, all of the people there are seeing people dying at their doorsteps.
RAJAGOPALAN: They’re starving themselves.
RAJAGOPALAN: They’re all struggling. The family members are struggling.
MENON: Yet at the time when India’s becoming independent, there are people like Nehru who are talking about the fact that we cannot have a Bengal famine again, and we do not know whether a Grow More Food Campaign is working or not. We don’t know if it’s a success because we don’t have enough data. We do not have a National Sample Survey to know if our Grow More Food Campaign is a success or is it a failure.
I think that this need for data is something, especially relating to hunger—something that Benjamin Siegel has written about in his book, and something that, of course, Amartya Sen writes about in terms of famines and then not being famines in a democracy. But part of it is also a democracy that’s investing in building up capacity such that you can actually track what the levels of hunger are.
I think that that is a moment that is important to the ISI, to Mahalanobis, to seeing the relevance and the importance of knowing, for example, what the average consumption of an Indian is in the rural areas, caloric consumption in rural areas versus urban areas, what the productivity and yield per acre in different parts of the country are. As you said, the National Sample Survey suddenly makes possible something that was seen as a gargantuan task that might have been impossible.
Harold Hotelling, an American statistician, says, “There’s no way that you can do this kind of National Sample Survey in India. It’s too big; it’s too complex. We don’t even attempt it in the United States with all our capacity. How can you do it?” Mahalanobis writes in his diary about how the institute is understaffed. There are 15 different languages from which it has to be standardized back to English. There are over a hundred different systems of measurement across India that have to be standardized.
People are falling ill due to tropical diseases. When they go, they have to be accompanied by armed guards through forests. They have to wait for the snow to melt in Himalayan passes. They encounter tribals, and they’re supposed to ask them about these employment and productivity, and they said that these tribals don’t understand the language they’d be speaking. Some people quit the ISI and don’t want to work for the National Sample Survey because they’re worried about man-eating tigers in these places that they’re serving. So it really is a colossal task.
Innovative Sampling Methods
RAJAGOPALAN: The other thing you also highlight is the innovation. He literally finds a way to sample without bias, minimizing bias and error, because that’s the entire difference between census and sampling. People preferred census because sampling was so error-prone and so biased, and you could get systemic biases. Mahalanobis is the first statistician across the world who comes up with a way where we can actually find a way to sample that will come close to census but at a fraction of the cost.
At the innovation level, the fact that he was an institutional builder and he could execute and he was entrepreneurial, of course, those are wonderful things. But even just coming up with the design I think is incredible for that time. He’s really up there with C.V. Raman and Ramanujan and all the world-class Indian scientists.
MENON: Right. It’s not just a contribution, as you said, to Indian social science and to Indian capacity-building. But as you said, he literally writes the textbook on sample serving for the UN subcommission on sample serving. He heads it, of course. He’s one of the primary moving forces for a decade and a half. He writes the textbook that is used by other countries on how to conduct these large-scale sample surveys at a fraction of the cost that plot-to-plot enumeration would cost.
It’s adopted, as you said, by the UN and the World Bank. Till today, there are sample surveys conducted which essentially borrow from what the ISI sets up in the 1940s and ’50s. It really is a bright spot in postcolonial science and in a contribution of a developing country to global development practice. I think that that’s why it’s particularly troubling that in the last few years you had reporting by statistical journalists like Pramit Bhattacharya, but also economists from Jean Dreze, Arvind Subramanian, to Raghuram Rajan . . .
RAJAGOPALAN: No, it’s a disaster. We can’t use any of this data.
MENON: When there are National Sample Survey data that happens to show a 40-year high in unemployment, it happens to be suppressed. When there happens to be a report that shows that household consumption has decreased at a precipitous rate, that survey is just discontinued. It’s why The Economist had a headline a few months earlier saying that India’s once-vaunted statistical system is crumbling today.
RAJAGOPALAN: It’s crumbling, absolutely.
MENON: I think that regardless of your political position and the views you have on the economy, this is something that would be useful regardless of political persuasion. I think it’s a real shame.
RAJAGOPALAN: You’re right. On one thing, I think Mahalanobis must be lauded, because even our ability to criticize the second five-year plan comes from the availability of good data and measurement and the fact that we could say, “Hey, you said the size of the pie will grow, and GDP will grow, and we are going to have X amount of increase in food grain production. And none of that happened, and you really screwed up.” We could not have done that if we didn’t have the statistical infrastructure.
Even to critique Mahalanobis’ planning venture, we need Mahalanobis’ statistical venture, is the way I think when I think about the way history should evaluate him. I think now that has completely crumbled.
Weaponizing Big Data
RAJAGOPALAN: But I have a different question for you in terms of thinking about these things in a longer arc rather than just the present moment. Are we just doomed in a sense that this kind of big data, when it comes to the government being in charge of it, is always going to be weaponized?
I mean that in the sense of when it came to planning, especially the later years (Indira Gandhi and so on), they were literally weaponizing planned inputs and outputs to extract bribes from various entrepreneurs, regular folks; to impose draconian limits, sometimes draconian limits, on newsprints so that they can curtail free speech of newspapers and so on. Now it’s a different version. Now it is being weaponized so that the government cannot be critiqued. It’s taken a different flavor.
If we extend this analogy away from NSS statistics and planning, and we move into AADHAAR and the National Population Register, and the two combined with the CAA, which is a terrifying thought in itself, it’s going to be weaponized in a completely different way on the question of citizenship and things like that. Is this going back to someone like James C. Scott and his book “Seeing Like a State”? Are we just doomed?
Are these state-led, big-data, technocratic exercises always going to be weaponized in some shape or form? And should we just think about private data collection like Rukmini Shrinivasan, another data journalist, has been talking about, how we need something like the Pew Survey? We need to come up with excellent decentralized private initiatives, both for-profit and nonprofit, to start thinking through these things.
MENON: No, I’d agree. I think that pluralizing data collection, I would think, is an unalloyed good. I think that it’s good to have different data sets produced by different organizations, whether state or nonstate, and have an ability to crosscheck and not to rely overwhelmingly on just the state. I’d say that the situation in the 1950s is different because there is no other alternative. It is only the state. You’re going not from having one data set or choosing between them. It’s just going from a completely disaggregated data set that the colonial architecture leaves you to trying to create one.
I don’t know if we are always doomed, but I think that we always need to be vigilant. I think there’s always a drift toward this kind of malevolent use, and I think that we always need to be hypervigilant. Yes, one should always be concerned about a state that commands this kind of data about its citizens. On the other hand, in the 1950s, the reason that this data is being extracted, or in a sense being unfurled, is because the state wants to discern the lives of the citizens in order that some sort of development be embarked upon.
Again, through which policies we can debate whether good or bad. But even if you want to have more export-led or more free trade-based growth, having the NSS data would still be useful. Of course, also the data that you had in the ’50s, ’60s and even ’70s is nowhere near the kind of data that you have today. The amount of data and the ability to aggregate the data and crunch that—
RAJAGOPALAN: And computing power.
MENON: Exactly, too.
RAJAGOPALAN: It’s not like Mahalanobis, where a basic computer occupied an entire room, when he had to write letters to get it—
MENON: And cost a million dollars. India had 2 computers at the end of the 1950s, both brought by Mahalanobis, one of his other achievements.
RAJAGOPALAN: My phone is more powerful than each of those computers.
MENON: Those corporate computers, the UNIVAC from America cost a million dollars and $200,000 every year for upkeep, and has less computing power than what we carry in our pockets today. I think that it’s information and data gathering and data computing and analysis of a different order of magnitude than today. But even in the 1970s, you can see how a state that turns malevolent can use data for nefarious purposes, right?
MENON: In some ways, there’s no way to protect data if that is the only data you rely on from the depredations of the state in that kind of way, which is why pluralizing data sources might be a good thing.
Where you don’t have freedom of press, nor do you have alternate data sources or data sets, which puts social scientists in a bind about what to believe and what not to believe. I think that even with a free press, I think that as a citizenry, we need to be vigilant. And also with our political choices in terms of asking—especially with things like AADHAAR, and these are the questions that have come up—which is that to what use is the data being put? Who has control over the data? Is that transparent? Who has access to the data aside from the government? Other vendors, third parties? Is it being sold? How is it being maintained? What are the protections and the firewalls that I have?
Perhaps most realistically, and this is something I think that most Indians are realizing today and growing by the day, is that do you have an option to opt out? With the National Sample Survey, you could just say, “I don’t answer your questions.”
RAJAGOPALAN: Same with the census. You could choose to refuse to answer the questions.
MENON: Exactly, but with the AADHAAR, as anyone who lives in India knows today, it’s becoming increasingly difficult to not have an AADHAAR, though there is no law that says that everybody needs to have it.
RAJAGOPALAN: Everyone can’t get into national archives without it.
MENON: Exactly. When it was promulgated, it was suggested to us that this would just be one more identity card; it’ll just be the best amongst them. But now it’s becoming the primary method, and that having a driver’s license, having a PAN [Permanent Account Number] card, having a voter ID card—all of that put together now, if you go to a bank to open an account, all of that, three of them put together equals one AADHAAR.
You are getting into a system where there is a form of identity that has all kinds of biometric information and much more sensitive information than my PAN card has, and you do not have the ability to opt out. I think that those are some of the dangers.
RAJAGOPALAN: No, I think I agree with you that there is huge value even now in systematic government statistical data sets being put out and the need to be vigilant with plural sources of data.
You’ve been so generous with your time. Thank you so much. This was such a pleasure.
MENON: Thank you so much, Shruti. This was a real pleasure.