Five-Year Plans and the City-Centric Bias: How Policy Sacrificed the Indian Village
N. Singh · ·3 min read
Translated from the original Hindi · मूल हिंदी लेख पढ़ें
When independent India’s First Five-Year Plan was formulated in 1951, priority was accorded to agriculture and irrigation. Dams like Bhakra Nangal were built.
But in 1956, when the Second Five-Year Plan (the Mahalanobis Model) arrived, the entire policy turned 180 degrees. The priority became—heavy industries, steel plants, and big cities.
The reasoning given was that once industries were established across the country, the surplus population dependent on agriculture would automatically find employment in factories, and the country would become prosperous. In economics, this doctrine was known as the ‘Trickle-down Theory’.
Yet, seven decades later, what is the reality today?
Industries never generated adequate jobs. Automation and machines displaced human hands. Even today, nearly 45% to 50% of India’s population depends on that very agriculture for their livelihood, yet agriculture’s share in the nation’s total GDP has dwindled to a mere 15–16%!
In other words, half the country’s population receives barely a sixth of the national income. Is this not a grave policy injustice?
The Budget Game: Corporates versus Farmers
In the fifth chapter of his book ‘Ujadti Kheti, Ujadte Gaon’, author N. Singh lays bare the balance sheet of all of India’s Five-Year Plans and annual budgets:
- When an industrialist sets up a factory, he receives tax holidays, free land, subsidised electricity, and billions in subsidies.
- If his business sinks, banks quietly write off non-performing assets (NPAs) worth lakhs of crores of rupees.
- But when it comes to electricity for a farmer’s tubewell, a bag of urea, or a Minimum Support Price (MSP), television studios and economists begin beating their chests, lamenting that “the nation’s treasury is being looted, the fiscal deficit will spiral!”
The Bitter Truth from the Book
“Indian planners blindly mimicked that Western model where barely 2 to 3 per cent of the population is engaged in farming. A vast, densely populated country like India can never function on the agricultural model of America or Europe. Here, agriculture is not merely an occupation, but a way of life and the backbone of social security for crores of people. When the plans curtailed capital formation in the agricultural sector, village ponds dried up, canals silted up, and the farmer was left entirely at the mercy of private tubewells and expensive diesel.”
— ‘Ujadti Kheti, Ujadte Gaon’ (Chapter 5)
What is the Real Solution?
- Restoration of Public Investment in Agriculture: At least 25% of the budget should be directly allocated to rural infrastructure—rehabilitation of canals, solar-powered irrigation, cold storages, and rural roads.
- Equitable Financial Allocation: A proportionate share of the incentives extended to the corporate sector (such as PLI schemes) must go directly to rural cottage industries and organic farming.
- Decentralisation of Planning: Instead of the air-conditioned chambers of NITI Aayog in Delhi, gram panchayats (village councils) must be vested with genuine authority to formulate their own development plans and budgets.
A Question Worth Pondering (The Book’s Message)
If plans are drafted merely to gloss over cities and make the rich even richer, can such development truly be called ‘national development’? This chapter of the book ‘Ujadti Kheti, Ujadte Gaon’ tears the mask off the faces of the country’s economic policymakers.
Barring the First Five-Year Plan, no plan in India ever regarded agriculture as the engine of the country’s economy. We simply assumed that progress lay only in the smoke of factories, and that the soil of the fields held nothing but backwardness.