How India’s economy under Nehru was run by a professor and a university institute


How did a university institute on the quiet outskirts of a city far from the capital come to set the course for a country of hundreds of millions? This is a question that has arisen since the middle of the 20th century because it marked a turning point for the Indian economy.

PC Mahalanobis and the Indian Statistical Institute played a crucial role in shaping the economic strategy for independent India. The second five-year plan (1956-1961), of which they were the authors, left its mark on the following decades. In some ways, Mahalanobis and the Institute were responsible for the country’s economic trajectory until the period of market reforms in the early 1990s.

What is less clear, however, is how they came by such influence. What took them from academia to politics, from the dense foliage of a lakeside campus in suburban Calcutta to the bland but very substantial offices of the Planning Commission in New Delhi ?

The answer lies in the importance of data for central economic planning. A planning-induced expansion in the state’s data infrastructure had formalized the relationship between planning and statistics. It was this process that placed the professor [as Mahalanobis was widely known] and the Institute in a position where they, in turn, could shape policy.

Ultimately, the impact of planning on statistics led a statistician to shape the Plan. The intertwining of planning and statistics has drawn the professor and the Institute ever deeper into the corridors of Yojana Bhavan. They were soon to play leading roles in the country’s development saga.

Capitalizing on a context where national statistics were seen as an integral part of economic planning, the professor courted foreign experts to back up his claim to write economic policy. This involved long tours abroad and hosting hundreds of intellectuals at the Institute’s Baranagore campus, during which he courted like-minded social scientists and credentialed foreign economists…

When he faced rivals in government and on the faculty during the debates over the second five-year plan, Mahalanobis was able to harness the credibility he had gained over the years from rubbing shoulders with an organized army of foreign scholars.

Global expertise was employed to foil powerful critics within the Planning Commission. In order to fight their way to a seat at the decision-making table, the professor and the Institute took advantage of various resources: their centrality in the national statistical organizations (which had become essential for planning), the proximity of the Prime Minister and the Minister of Finance, and the cultivated support of actors and institutions on both sides of the Cold War. The planning commission did not roll out the red carpet for the professor. It was a coup whose speed took Delhi by surprise.

The Mahalanobis jet set has caught the eye. As scholars say, he was no ordinary lecturer. Like amazed and maybe a little disconcerted [American statistician] Edwards Deming later recalled, “Probably no statistician ever attended so many meetings in the world”. The travels earned a separate section in the Institute’s annual reports and were later published in the house journal Sankhya.…

The professor left India in order to be relevant in India. As one of India’s most eminent scientists and its leading statistician, Mahalanobis has been invited to universities and academic institutes all over the world. He reveled in them because, in addition to satisfying his various intellectual impulses, they enhanced his reputation at home. Because if his scientific good faith was irreproachable, as an economist, he had no reference. If he aspired to be a planner, he would need support.

The professor networked with a vengeance. Devoting a few months to traveling nearly every year, Mahalanobis criss-crossed continents in his role as an unofficial science ambassador and public intellectual, most often visiting Europe, the United States, and the Soviet Union. The combination of academic fame, involvement in all aspects of Indian statistics, an apparent lack of political affiliation, and access to Indian government opened doors on both sides of the Iron Curtain. These included the offices of statisticians, planners and economists from Washington to Moscow, from Tokyo to Puerto Rico….

The professor visited the Soviet Union at the end of June [1954]…[His] spirits were lifted by the Soviet welcome. He realized that his hosts wanted to strengthen relations with India as it appeared as a possible political ally, and Nehru’s prestige was at its zenith internationally.

He was struck by the repeated references to the Prime Minister and the emotion aroused by his homeland. Everywhere he went, across the class, people spoke with admiration for Nehru. In Leningrad (Saint-Petersburg), he attended a religious service on a Sunday. When he emerged, “some of the women were so upset talking about India and Nehru that two or three began to cry softly – tears came to their eyes in a surge of feeling”.

Although this sentimentality may seem exaggerated, other Indian travelers to the Soviet Union confirm Nehru’s remarkable personal popularity. On tour in the Russian countryside a few months later, filmmaker Khwaja Ahmad Abbas wrote to his brother about what happened when he and his Soviet writer friends stopped in a small town for lunch. One of the Russians offered to toast: “‘To Nehru – the most important man in the world today’ – and, surprise, a crowd of people from other tables and even waiters and waitresses gathered to join us in drinking this toast.”

It was a good time to be an Indian in Russia. Abbas spoke of the “universal respect and affection for our Prime Minister” as well as Russian enthusiasm for Indian cinema. He was surprised by the film’s “incredible popularity” Awara and his song Awara Houn “which swept the whole country”.

Mahalanobis was bowled over by the hospitality. He was invited by Georgy Aleksandrov, the Soviet Minister of Culture, to spend a day at his riverside house on the banks of the Moskva.

It was a rare move for a high-ranking member of the Soviet establishment, apparently out of fear of espionage. Located outside the city, among pines and conifers, Aleksandrov’s two-storey retreat was part of a group of dachas belonging to the Council of Ministers, a group described by the professor as “the highest level of society”.

Joined by the Rubinsteins and other members of the Academy of Sciences, they graze on a spread “of a distressing sumptuousness”, sip choice wines and raise their glasses with numerous toasts. One concerned the health of the prime ministers of both nations. Another invoked Newton’s laws of gravitation to explain relations between China, India and the USSR. Elaborate and convoluted, but unsurprising, given the company. “The whole atmosphere is something wonderful,” the professor proclaimed delightedly.

Sometimes the thrill was abruptly interrupted by doubt. In the midst of the transmission of the uplifting Muscovite events in Pitambar Pant, he stopped. “These people took me very seriously – way too seriously, I’m afraid – because I don’t know if we’d be able to do anything real other than write background material.” News from the Planning Commission and the Indian government was often deflating.

Just as the aerial castles were beginning to take shape, he was receiving mail from Delhi and “falling to earth”. Things were coming to a head for the frustrated professor. He was tired of producing background notes and studies, moving “furiously like a rocking horse without any progress”.

At half past midnight in mid-July, Mahalanobis peered from his hotel room in Red Square – surrounded by Lenin’s Mausoleum and the fairy-tale domes of St. Basil’s Cathedral – at the lights shimmering atop the Kremlin towers. The professor wished for closer relations between Delhi, Beijing and Moscow.

He sensed that the moment when his life would come together was imminent: there was “a growing conviction of a kind of crisis”. It was no longer possible to stick to statistics. What really interested him was national development planning. “I hope New Delhi gives us a chance.”

Excerpted with permission from Democracy planning: how a professor, an institute and an idea shaped IndiaNikhil Menon, Penguin Books.


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