Tryst with Prosperity: Indian Business and the Bombay Plan of 1944 By Medha M. Kudaisya

Medha M. Kudaisya ↠ 5 Summary

The story of Indian business remains incomplete without the Bombay Plan

The Tryst with Prosperity is the story of the Bombay Plan which was initiated in 1944. Eight remarkable individuals from the world of industry, like J.R.D. Tata, Lala Shri Ram and G.D. Birla, came together and drafted this plan.
The Bombay Plan, an economic blueprint, promised to double India's per capita income in fifteen years; envisaged a 130 per cent rise in agriculture output; a 500 per cent increase in manufacturing; and a minimum standard of living for every individual. This plan held out the promise of partnership between the Indian state and private enterprise. Yet, ironically, a decade later, these captains of industry fell out with the Nehruvian establishment. Nonetheless, the indelible imprint of the Bombay Plan was manifest in the national Five Year Plans and in the economic trajectory of India.

Seventy-five years later, the Bombay Plan's legacy continues to be unmistakable in the economic life of contemporary India. Rivetingly told, business historian Medha M. Kudaisya, narrates an important chapter from the story of Indian business. Tryst with Prosperity: Indian Business and the Bombay Plan of 1944

Medha kudaisya brings to life a long forgotten document dubbed as 'The Bombay Plan', that tells a fascinating tale of the origins of India's economic planning.

The Bombay Plan was formulated in 1944 by India's top industrialists and bureaucrats, comprising G.D.Birla, J.R.D. Tata, Purushottamdas Thakurdas, Kasturbhai Lalbhai, Lala Shri Ram, Ardeshir Dalal, A.D.Shroff and John Mathai as part of the nationalist aspirations of the state coming up with a blueprint about how to manage Indian economy after independence.

The Indian industry and manufacturing came of age during World War II as it became an important supplier of material to the colonial government and played a crucial role in the war effort. Indian industry supplied a range of products for the war effort including iron and steel, coal, cement, textiles, small armaments and even armoured cars. It was in this background, with independence on the horizon, that the industrialists got together and came up with Bombay Plan in 1944. The industrialists themselves were an variegated group and despite their differences they were united in their opposition to Nehru’s ‘socialist’ style command economy model.
The Bombay Plan had an astonishing eye for detail. The Plan promised to double India's per capita income within a period of 15 years; envisaged a 130 per cent rise in agriculture output; a 500 per cent increase in manufacturing; and a minimum standard of living for every individual. It also went into great detail over the sectoral allocations and the funding aspects.

The Bombay Plan generated widespread interest in India and abroad at the time of its publication and was unique in the history of post-colonial development. Nowhere in the developing world did a group of business leaders come together to articulate such a comprehensive vision for national development. The book brings back to focus a historic document that has been all but forgotten despite its many path-breaking ideas.If only our official planners had followed the Bombay Plan’s proposals on human development, India would have been a different country today. Tryst with Prosperity: Indian Business and the Bombay Plan of 1944 It is well known that Jawaharlal Nehru had romanticized the Soviet’s style of central planning of the economy, irrespective of his skepticism about the communist state. Hence, for the critics, the dirigisme which followed the independence was the sole brainchild of Nehru. However, in this book, the author penned down a chronological history of the Bombay Plan which was the actual precursor for the subsequent planning under the planning commission which followed the next six decades.

Bombay Plan is a ninety-page document published by the leading persona of Indian businessmen and bureaucrats, who proposed a state-controlled economy for a period of the first fifteen years after independence, followed by gradual liberalization. The build-up of the narration is extremely well written in the book. The author picks up the story from the onset of the Second World War, right after when Britain declares India as a party to the war followed by the chapters on the economic impact of War in India. When debt-stricken India turned her fate upside down due to massive war production and exports, the sterling balances which were lying idle with Britain became a potential future capital for eminent economists, businessmen, and commerce leaders to build a future independent India.

The author probes into the technicals of the Bombay Plan, questioning as to why the capitalists would prefer and advocate a state control economy where the partnership between private enterprise and the State exists. To her, the domineering effect of Keynesian ideas right after the Great Depression followed the echoes of Keynes-Hayek debate around the world, and the predominant left in Congress were the answers. Rightly pointing out the merits and demerits of the plan, this book draws a fundamental background behind the idea of Planning in India. Written in a lucid language, the chapter on Keynes Vs Hayek narrates how Indian intelligentsia, politicians, and economists debated the post-war economic planning only to primarily structure the policies around the Keynesian ideas.

The Bombay Plan was a visionary document because much emphasis was laid on rapid industrialization and production, eventually shifting from an agrarian economy and raising the standard of living at three stages with clear-cut objectives and targets. Though the authors of the plan prescribed the control of production, trade, and regulation for a period of the first fifteen years, what followed the Indian economic scene for the next three decades were tighter regulations on production, multiple red tapes and bureaucratic hurdles, monopoly of government services, restriction of trade and regressive business laws which completely sabotaged the capital formation.

Right after the liberalization in 1991, it has now become a popular opinion that India has missed the trick of what the East Asian countries like Japan did in the 60s and 70s. However, the author made no mistake in pointing out the reasons for the failure of the Bombay Plan. They were the horrors and ruins of partition followed by the refugee crisis and immediate economic relief, the unprecedented dip in industrial production, and the post-war inflation. These factors persuaded Nehru to embark upon a crisis management mode of planning focusing on public expenditure to rectify the disequilibrium caused by partition.

Concisely written from a descriptive point of view, the author refrains from judging the Bombay Plan or politicking the narrative. For someone interested in the Indian economy after independence, this book is a must-read to understand that the discussions on the idea of a planned economy prevailed in India even before the planning commission and Bombay Plan was the first such proposal to tender a mixed economy. Tryst with Prosperity: Indian Business and the Bombay Plan of 1944 Interesting to know that the 5 year plans of the Indian government were inspired by the Bombay Plan especially with its focus on basic industries and capital goods.

Also, most businessmen were opposed to the INC and it's agitational methods and were on good terms with the colonial government. Tryst with Prosperity: Indian Business and the Bombay Plan of 1944