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“The Promise of Partnership”: Indian Business, the State, and the Bombay Plan of 1944

Published online by Cambridge University Press:  10 April 2014

Medha Kudaisya
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Abstract

This article recounts the story of the Bombay Plan of 1944, a bold vision of economic transformation for postwar India put forth by business leaders. The Plan represented a turning point in the history of Indian business. It marked the institutionalization of a long relationship between business and nationalist leadership as well as a historic moment when business groups, for the first time, unhesitatingly aligned themselves with nationalist aspirations. Underlying the Bombay Plan was the idea of a close partnership between business and the state. Yet, within a decade, this optimism died out as the autarchic features of economic policy became increasingly pronounced in independent India. The story of the Bombay Plan provides an insight into the relations between business and state in the context of development planning in India.

Type
Research Article
Information
Business History Review , Volume 88 , Issue 1: Business, Networks, and the State in India , Spring 2014 , pp. 97 - 131
Copyright
Copyright © The President and Fellows of Harvard College 2014 

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References

1 See Full text: Manmohan Singh's address at the CII National Conference, 3 Apr. 2013, http://ibnlive.in.com/news/full-text-manmohan-singhs-address-at-the-cii-nationalconference/382874-7.html.

2 Sir Thakurdas, Purshottamdas, Tata, J. R. D., Birla, G. D., Sir Dalal, Ardeshir, Sir Ram, Shri, Lalbhai, Kasturbhai, Shroff, A. D., and Mathai, John, A Brief Memorandum Outlining a Plan of Economic Development for India (Bombay, 1944)Google Scholar. Part 2 of the Plan was published in December 1944. Sir Thakurdas, Purshottamdas, Tata, J. R. D., Birla, G. D., Sir Ram, Shri, Lalbhai, Kasturbhai, Shroff, A. D., and Mathai, John, A Brief Memorandum Outlining a Plan of Economic Development for India, Part 2 (Distribution: Role of the State) (Bombay, 1944)Google Scholar. The Plan was also published as a Penguin Special in 1945. A former socialist and publicist with Tata Sons, Minoo Masani, wrote a popular illustrated version for children, published by Oxford University Press in 1945; see Masani, Minoo, Picture of a Plan (Bombay, 1945)Google Scholar.

3 The 1940s saw the publication of a number of plan blueprints, such as the “People's Plan” authored by M. N. Roy, which projected a Leftist vision, and The Gandhian Plan of Economic Development for India (Bombay, 1944)Google Scholar, put forth by Shriman Narayan Agarwal, which visualized a self-sufficient village economy. On the “People's Plan,” see Banerjee, Brajendra Nath, Parikh, Govardhan Dhanaraj, Tarkunde, V. M., People's Plan for Economic Development of India, Indian Federation of Labour, Postwar Reconstruction Committee (Delhi, 1944)Google Scholar. For an understanding of ideas of development being debated in India, see Zachariah, Benjamin, Developing India: An Intellectual and Social History (Delhi, 2005)CrossRefGoogle Scholar.

4 There has not been much work on the Bombay Plan; Amal Sanyal's main concern in “The Curious Case of the Bombay Plan” is the sectoral outlay of the Plan, which is compared to the first three Five-Year Plans of independent India's Planning Commission. “The Curious Case of the Bombay Plan,” Contemporary Issues and Ideas in Social Sciences (June 2010), available at http://nzsac.files.wordpress.com/2012/05/bombayplanfornzsac.pdf. Vivek Chibber also briefly looks at the Plan in Locked in Place: State-Building and Late Industrialization in India (Princeton, 2003)Google Scholar. Chibber views the Plan as a maneuver by capitalists in the worrisome context of the Quit India movement and sees it as an attempt to forestall socialism. David Lockwood argues that the Plan should be seen as an attempt at a “bourgeois revolution”; Lockwood, David, “Was the Bombay Plan a Capitalist Plot?” Studies in History 28, no. 1 (2012): 99–116CrossRefGoogle Scholar. Chibber and Lockwood tend to look at business-Congress relations in somewhat simplistic terms, leaving out the complexity that marked them. Further, business leadership was realistic enough to understand the limits of their influence.

5 For details on Thakurdas's career, see Sen, S. P., ed., Dictionary of National Biography, vol. 4 (Calcutta, 1974), 339–40Google Scholar. For a biography of Thakurdas, see Moraes, Francis R., Sir Purshotamdas Thakurdas (Bombay, 1957)Google Scholar.

6 Indian business interests argued for a full gold standard with circulating gold and opposed the raising of the rupee-sterling ratio to 1:16, which they claimed would amount to a 12.5 percent bounty for foreign imports at the expense of the Indian producer. On these issues, see Gordon, A. D. D., Businessmen and Politics: Rising Nationalism and a Modernising Economy in Bombay, 1918–1933 (New Delhi, 1978), 180–84.Google Scholar

7 Thakurdas was instrumental in the founding of the Indian Central Committee in 1921, was an active member of the East India Cotton Association for over thirty-five years, and was called its “reigning Mughul.” He had also held executive positions in the Bombay cotton exchange, including that of president. Since early in his career Thakurdas enjoyed government patronage. His first official honor was the Kasier-I-Hind medal (MBE). Other honors followed soon after—Companion of the Order of the Indian Empire (CIE) in 1919, appointment as Sheriff of Bombay came a year later, and in 1923, Thakurdas was knighted.

8 Thakurdas was founding president of FICCI, 1927–28.

9 Tripathi, Dwijendra, “Towards Maturity: Indian Business in the Inter-War Years,” in The Oxford India Anthology of Business History, ed. Kudaisya, Medha (New Delhi, 2011)Google Scholar, 303.

10 Lala, R. M., Beyond the Last Blue Mountain: A Life of J. R. D. Tata (New Delhi, 1992)Google Scholar; and Lala, R. M., The Joy of Achievement: Conversations with J. R. D. Tata (New Delhi, 1995)Google Scholar.

11 FICCI was the main forum in the struggle by Indian big business against the European domination of the Indian economy. For over three decades between 1927 and the 1950s, Birla, Thakurdas, and Kasturbhai were powerful figures within FICCI.

12 Gordon, Businessmen and Politics, esp. ch. 5, 155–99.

13 Shroff was well known to Sir Osborne Smith, the first governor of the Reserve Bank who wanted him to be Deputy Governor. However, the suggestion was turned down by the colonial government because he was seen as critical of the colonial government and considered a “Congress economist.” On Shroff, see Dalal, Sucheta, A. D. Shroff: Titan of Finance and Free Enterprise (New Delhi, 2000)Google Scholar.

14 Kasturbhai had also been a member of the founding Executive Committee of FICCI.

15 For a study of Kasturbhai Lalbhai, see Tripathi, Dwijendra, The Dynamics of a Tradition: Kasturbhai Lalbhai and His Entrepreneurship (Delhi, 1981)Google Scholar.

16 For a biography of Sir Shri Ram, see Singh, Khushwant and Joshi, Arun, Shri Ram: A Biography (London, 1968)Google Scholar.

17 Sir Ardeshir Rustomji Dalal was signatory only to Part 1 of the Plan, since he was co-opted by the Government to be its Member-in-Charge of Planning before the publication of Part 2 of the Plan in December 1944.

18 For instance, at the time of Gandhi's first noncooperation movement of 1920, Thakurdas was anxious that noncooperation be eradicated “root and branch” and the people be brought to “sanity and sober common sense.” Thakurdas to T. Holland, 16 Oct. 1920 and Ardeshir Dalal to Thakurdas, 19 Oct. 1920, Purshottamdas Thakurdas Papers, 24/II, Nehru Memorial Museum and Library, New Delhi. Shroff was perhaps the most vocal among the Bombay businesspersons. In 1931, he publicly challenged the Congress to bring out a more progressive scheme than that of the Liberals. In Shroff's view, political issues took up the much-needed attention that should have been given to financial matters. “Letters to the editor,” Times of India, 15 July 1930.

19 Criticizing financial policy, Shroff wrote: “No wonder then if level-headed people are losing faith in the so-called constitutional method of agitation. Government succeeded in forcing the 18d ratio on India in the teeth of the country's protests and warning. Government still persist[s] in maintaining that ratio by measures which have crippled our trade and industry.” “Letters to the editor,” Times of India, 15 July 1930. Like many other of the city's business figures, Shroff defended Gandhi's eleven points presented in 1930, in which the Mahatma had included many of the demands of Bombay industrialists, such as a reduction of the ratio to 16d, a protective tariff against foreign imports, and passage of the coastal reservations bill. Times of India, 25 Oct. 1930.

20 Nehru's election as president to the Indian National Congress in 1936 worried the business community. Shroff, as vice president of the Indian Merchants Chamber, condemned Nehru's presidential address and its espousal of “socialism” as “more likely to injure the best interest of this country” and asserted that it would “result in checking industrial enterprise” and encouraging flight of capital from India. He called upon the city's commercial community to “make clear to the Congress that it could not utter such utterances.” Times of India, 29 Apr. 1936. Thereafter, Nehru, on a visit to the city, attacked the attitude of the business community, declaring that “the bogey of socialism was only a veil” under which some businessmen “found an opportunity to join hands with the opponents of the Congress.” Markovits, Claude, Indian Business and Nationalist Politics, 1931–39: The Indigenous Capitalist Class and the Rise of the Congress Party (Cambridge, U.K., 2002)Google Scholar and Times of India, 30 Apr. 1936 and 20 May 1936.

21 Other prominent businesspersons who signed the Manifesto were Walchand Hirachand, Sir N. Saklatvala, Sir Cowasji Jehangir, R. Chinoy, and Chunilal B. Mehta. The manifesto declared that they had “no hesitation in declaring that we are unequivocally opposed to ideas of this kind.” Times of India, 20 May 1936.

22 Not unexpectedly, Birla had lukewarm relations with Jawaharlal Nehru, whose economic philosophy emphasized a predominant role for the state in economic life. Yet, Birla was astute enough not to waver in his support of the Congress Party as he was convinced that centrist parties could best serve the interests of private enterprise.

23 See Kudaisya, Medha, The Life and Times of G. D. Birla (New Delhi, 2003)Google Scholar, ch. 6. Journalist and astute political observer Durga Das noted: “In fact, the comments of the Federation on the Central Budget were awaited by the Congress and other legislators to decide what line to take in the general discussion on it.” Das, Durga, India from Curzon to Nehru and After (London, 1969), 316–17Google Scholar.

24 The origins of the Bombay Plan lay in a meeting in October 1942 between Birla and Tata in Delhi to discuss “post-war conditions” and to contemplate how prominent businessmen could form a “small committee of industrialists aided by eminent economists, for the purpose of investigating and considering all aspects of the question and is possible of formulating an agreed programme.” Tata then roped in Kasturbhai, Thakurdas, and Shri Ram.

25 J. R. D. Tata to Birla, 21 Oct. 1942, Birla Papers, File Important Series II, T-I Tata, J. R. D., Birla family archives (hereafter Birla Papers, Series II).

26 Bombay-based economist V. K. R. V. Rao was also often called upon for advice.

27 On the internal differences within FICCI before 1947, see Kochanek, Stanley A., Business and Politics in India (Berkeley, 1974), 160–70.Google Scholar

28 Low, Donald A., “The Forgotten Bania Merchant Communities and the Indian National Congress,” The Indian National Congress: Centenary Hindsights, ed. Low, Donald A. (Oxford, 1988)Google Scholar.

29 For an understanding of the politics of Bombay business during the 1920s, see Gordon, Businessmen and Politics; for a study of business and Congress relations in the 1930s, see Markovits, Indian Business and Nationalist Politics; and Tripathi, Dwijendra, ed., Business and Politics in India: A Historical Perspective (Delhi, 1991)Google Scholar.

30 Rothermund, Dietmar, India in the Great Depression, 1929–1936 (Delhi, 1992)Google Scholar; and Roy, Tirthankar, Economic History of India, 1857–1947 (Delhi, 2011)CrossRefGoogle Scholar.

31 Kudaisya, Life and Times of G. D. Birla, ch. 8.

32 See Lokanathan, Palamadai S., India's Post-War Reconstruction and Its International Aspects (New Delhi, 1946)Google Scholar.

33 Venkatsubbiah, Hiranyappa, Enterprise and Economic Change: Fifty Years of FICCI (Delhi, 1977), 43–44.Google Scholar

34 Indian Express (Madras), 5 June 1942 in Birla Papers, Series II, File G-11.

35 C. S. Ratnasabapathi Mudaliar's speech at the annual meeting of FICCI, 1940.

36 Times of India, 1 Mar. 1940.

37 Times of India, 26 Jan. 1940 and 10 Feb. 1940. Even the film industry saw it as an opportune time to expand, and its South Indian Film Chamber of Commerce hoped to enter new markets, such as Ceylon, Burma, Malaya, and South Africa, which wanted to substitute dollar imports with sterling commodities in which Indian films ranked. Times of India, 27 Sept. 1940.

38 “Report Submitted to the Committee of the Federation by the E.P.T. Bill Sub-Committee,” FICCI, Correspondence and Relevant Documents Relating to Important Questions Dealt with by the Federation during the Year 1940–41 (New Delhi, 1941)Google Scholar.

39 Times of India, 1 Feb. 1940 and 6 Feb. 1940.

40 FICCI, Correspondence and Relevant Documents Relating to Important Questions Dealt with by the Federation during the Year 1940–41Google Scholar.

41 These included the Bombay Stock Exchange, Indian Stock Exchange (Bombay), Bombay Yarn Exchange, Bombay Paint Merchants' Association, Sugar Merchants' Society, Silk Merchants' Association, and Madras Stock Exchange. Times of India, 6 Feb. 1940.

42 Times of India, 1 Feb. 1940. For J. R. D. Tata's view, see Times of India, 2 Feb. 1940.

43 Times of India, 13 Dec. 1940. For FICCI's reaction, see FICCI, Proceedings of the 15th Annual Session, 7–8 March 1942 (New Delhi, 1942)Google Scholar.

44 Times of India, 30 Mar. 1943, 28 May 1943, and 10 May 1956.

45 Capital, 1 Apr. 1943. FICCI presented a twelve-page memorandum to the Department of Commerce of the Government of India critiquing the body. Capital, 15 Oct. 1942.

46 B. M. Birla's speech at the Indian Chamber of Commerce, Capital, 29 Mar. 1945.

47 G. L. Mehta, president of the Indian Chamber of Commerce, Calcutta, said at its Annual Meeting held in February 1940 that industry was unable to take advantage of the opportunities of the war because of the lack of clarity in Government policies. Times of India, 1 Mar. 1940.

48 Lokanathan, India's Post-War Reconstruction, 20.

49 Times of India, 6 July 1942. FICCI communicated its dismay to the Executive Council asserting that “the fact that the vital portfolio of War Transport has been placed in charge of a non-official British representative clearly indicates the policy of the Government to continue to exclude Indians from all key Departments.” See Press Communiqué, 9 July 1942, and “Copy of Communication No. F. 1698/636, dated 17th July 1942, from the Federation to the Secretary to His Excellency the Viceroy's Executive Council, New Delhi,” FICCI, Correspondence and Relevant Documents Relating to Important Questions Dealt with by the Federation during the Year 1942–43 (New Delhi, 1943)Google Scholar.

50 FICCI, Proceedings of the 16 Annual Meeting, Delhi, 27–28 March 1943 (New Delhi, 1943)Google Scholar.

51 Venkatsubbiah, Enterprise and Economic Change, 45.

52 Grajdanzev, Andrew J., “India's Economic Position in 1944,” Pacific Affairs 17 (Dec. 1944): 460–77.CrossRefGoogle Scholar

53 FICCI, Press Note of 25 Dec. 1942; FICCI, Correspondence and Relevant Documents Relating to Important Questions Dealt with by the Federation during the Year 1942–43.

54 G. D. Birla to Purshottamdas Thakurdas, 4 June 1943, in T-6, Thakurdas Purshottamdas, Sir, Birla Papers, Series II.

55 Lokanathan, India's Post-War Reconstruction, 14.

56 In a statement issued to the Press on 25 Dec. 1942, FICCI asserted: “India's vital interests in the economic, financial an[d] fiscal spheres have hitherto been subordinated to those of Britain and whenever they have been in conflict, . . . Indian interests have in the past been sacrificed or relegated to a second place.” FICCI, Correspondence and Relevant Documents Relating to Important Questions Dealt with by the Federation during the Year 1942–43.

57 Speech of G. L. Mehta, 27 Mar. 1943, FICCI, Proceedings of the 16th Annual Meeting.

58 Times of India, 11 Aug. 1944.

59 On these years, see Markovits, Indian Business and Nationalist Politics, ch. 6.

60 Along with other business leaders, Birla, Thakurdas, and Tata had appealed to the Viceroy: “We are all businessmen and, therefore, need hardly point out that our interest lies in peace, harmony, goodwill and order throughout the country. . . . We submit that the need of the hour is not strong action, but a proper and sympathetic understanding and tactful handling of a grave situation.” Letter to the Secretary of the Viceroy, 4 Aug. 1942, from Birla. J. R. D. Tata, Thakurdas, and others in File G-II, Birla Papers, Series II.

61 Purshottamdas Thakurdas to G. D. Birla, 17 June 1943, T-6, Thakurdas Purshottamdas, Sir, Birla Papers, Series II.

62 G. L. Mehta, Press Interview, n.d, File G-11, Birla Papers, Series II.

63 Lord Linlithgow, the Viceroy, blamed the “most determined efforts” of Birla and Thakurdas for the businessmen's resignations. Linlithgow to Amery, 11 Feb. 1943, in Manserg, Nicholas, ed., Transfer of Power: Constitutional Relations between Britain and India, 1942–1947, vol. 3 (London, 1970–83)Google Scholar, Document 453.

64 Tripathi, Dwijendra, The Oxford History of Indian Business (Delhi, 2004)Google Scholar, 226. Also see Voight, Johannes H., India in the Second World War (New Delhi, 1987)Google Scholar.

65 The prosperity of the war years can be gauged from the fact that within the first year supplies for war purposes were estimated as 280,000 tons of timber at the cost of 27.3 million rupees, cotton canvas and cotton-jute canvas valued at 27 million rupees, 12 million garments at 70 million rupees, tents valued at 50 million rupees, 120 million rounds of small ammunition, 400,000 filled shells and naval craft at the cost of 7.4 million rupees. Capital, 19 Dec. 1940.

66 Times of India, 25 Oct. 1940. By the end of 1940, Indian mills were supplying more than 80 percent of the country's mill-made cloth, which equaled the country's total consumption before the First World War.

67 Jain, L. C., Indian Economy during the War (Lahore, 1944), 33–34Google Scholar.

68 Grajdanzev, “India's Economic Position in 1944,” 460–77.

69 Times of India, 18 Dec. 1940.

70 Grajdanzev, “India's Economic Position in 1944,” 471.

71 Wadia, Pestonji A. and Merchant, K. T., Our Economic Problems (Bombay, 1957)Google Scholar, 427.

72 For the story of the chemical industry, see De Sousa, J. P., History of the Chemical Industry in India (Bombay, 1961)Google Scholar; for a concise contemporary analysis of the impact of the war, see Lokanathan, India's Post-War Reconstruction.

73 Wadia and Merchant, Our Economic Problems, 431.

74 See Grajdanzev, “India's Economic Position in 1944,” and Jain, L. C., Indian Economy during the War (Lahore, 1944), 29–31Google Scholar.

75 Wadia and Merchant, Our Economic Problems, 427 and 449.

76 Lokanathan, India's Post-War Reconstruction, 25.

77 Parekh, H. T., Housing Development Finance Corporation (India), and Industrial Credit and Investment Corporation of India, India in Transition through the Eyes of a Visionary, 1940s to 1990s: The Writings of H. T. Parekh: A Tribute by HDFC and ICICI, Vol. 1 (Bombay, 1995)Google Scholar, 136.

78 Parekh, et al., India in Transition through the Eyes of a Visionary, 1.

79 G. D. Birla to Horace Alexander, 4 Oct. 1944, Birla Papers, Series Foreign Correspondence, File No. 13, 1935–46. One crore equals 10 million; thus, 1200 crore rupees equals 12 billion rupees.

80 Lokanathan, India's Post-War Reconstruction, 34–35.

81 On the sterling issue, see Tomlinson, B. R., “Indo-British Relations in the Post-Colonial Era: The Sterling Balances Negotiations, 1947–49,” Journal of Imperial and Commonwealth History 13, no. 3 (1985)CrossRefGoogle Scholar; and Mukherjee, Aditya, “Indo-British Finance: The Controversy over India's Sterling Balances, 1939–1947,” Studies in History 6, no. 2 (1990): 229–51CrossRefGoogle Scholar. For the larger picture of negotiations over sterling, see Schenk, Catherine R., Britain and the Sterling Area: From Devaluation to Convertibility in the 1950s (London, 1994)Google Scholar.

82 Venkatsubbiah, Enterprise and Economic Change, 55–56. G. D. Birla published the fourteen-page Our Sterling Balances in Jan. 1943, the longer forty-three-page India's War Finances in Mar. 1943, and the more concise twenty-three-page Indian Currency in Retrospect in Sept. 1944.

83 It was not unexpected that the authors of the Bombay Plan would be interested in war finances, given that many of them had longstanding engagements with currency issues. Fiscal autonomy to India was a demand that Indian industry had raised after World War I, and it had been their expectation in return for the generous support to war loans raised in the Bombay money market. The sterling issue led to much debate within business lobbies. Leaders differed about the wisdom of taking up the sterling issue publicly in the midst of the war. Some feared that it was premature to raise the issue during the war years since it could backfire and lead to an increase in the allocation of war expenses to India. See S. C. Majumdar to Birla 17 Dec. 1942, in L-3, Lokanathan, P. S. Dr., and G. D. Birla to Purshottamdas Thakurdas, 26 Nov. 1942, T-5, Thakurdas, Purshottamdas, Sir; also Birla to Majumdar, 25 Mar. 1943, L-3, Lokanathan, P. S. Dr.; all in Birla Papers, Series II.

84 Birla to Thakurdas, 4 Aug. 1942, in T-5, Thakurdas Purshottamdas, Sir, Birla Papers, Series II.

85 Birla to Thakurdas, 10 Dec. 1942, T-5, Thakurdas, Purshottamdas, Sir, Birla Papers, Series II.

86 FICCI, Correspondence and Relevant Documents Relating to Important Questions Dealt with by the Federation during the Year 1942–43.

87 Eastern Economist, 16 July 1943.

88 Mody, Homi and Mathai, John, A Memorandum on the Economic and Financial Aspects of Pakistan (Bombay, 1945)Google Scholar; Capital, 4 Oct. 1945; and Birla, G. D., “Basic Facts Relating to Hindustan and Pakistan,” Eastern Economist Pamphlets, No. 5 (New Delhi, 1947)Google Scholar. For more details, see Kudaisya, Life and Times of G. D. Birla.

89 Birla to Jawaharlal Nehru, 13 Jan. 1942, and Birla to Jawaharlal Nehru, 3 June 1947, in File N-6, Nehru Pandit Jawaharlal, Birla Papers, Series II.

90 This became clear when the Central Legislative Assembly discussed the Plan; many Muslim League members objected that it proposed a national government with jurisdiction in economic matters extended to the entire country. See Jha, Manoranjan, Role of Central Legislature in the Freedom Struggle (New Delhi, 1972), 278–79Google Scholar.

91 For details on the Plan see Thakurdas et al., A Brief Memorandum Outlining a Plan, Part 1.

92 Lokanathan, P. S., “The Bombay Plan,” Foreign Affairs 23, no. 4 (1945): 680–86.CrossRefGoogle Scholar

93 Thakurdas et al., A Brief Memorandum Outlining a Plan, Part 1. Also see G. D. Birla, “The Plan Explained,” Eastern Economist, 10 Mar. 1944.

94 The planners recognized the importance of addressing basic needs such as education and hoped to strengthen different levels of education, both traditional and technical, with the intention of eradicating illiteracy within fifteen years. Public health needs of both urban and rural areas were to be addressed, with a focus on ensuring water supply and basic medical facilities. Ensuring housing needs was an important part of the Plan, and the basic minimum was worked out as 100 square feet, involving a capital expenditure of 6.6 billion dollars (1,400 crore rupees, or 14 billion rupees).

95 The figures have been derived from Lokanathan's article “The Bombay Plan,” 680–86.

96 The planners believed that “if suitable means are adjusted for attracting hordes from their place of concealment and if a national government comes into power in whom people will have faith,” this could be secured.

97 For this, it was essential that the balance be allowed to be convertible into other currencies, and the planners lobbied hard to overturn the 1939 decision of the colonial state to make it nonconvertible.

98 Lokanathan, “The Bombay Plan,” 680–86.

99 Thakurdas, et al., A Brief Memorandum Outlining a Plan, Parts 2 and 3.

100 Lokanathan, India's Post-War Reconstruction, 57.

101 Masani, Picture of a Plan, 59.

102 Ibid., ch. 5.

103 Not much came out of the newly established Planning and Development department. In January 1946, Ardeshir Dalal resigned, and Sir Ramaswami Mudaliar took over the portfolio.

104 Vera Anstey's review, “A Plan of Economic Development for India,” by Thakurdas, Purshottamdas, International Affairs (Royal Institute of International Affairs) 21, no. 4 (Oct. 1945), 555–57.Google Scholar

105 Parikh, G. D., “The ‘Master-Plan’ X-Rayed,” and M. N. Roy, “Planning and Planning,” both in Alphabet of Fascist Economics: A Critique of the Bombay Plan of Economic Development of India, ed. Banerjea, B. N. (Calcutta, 1944)Google Scholar. Also Wadia, P. A. and Merchant, K. T., The Bombay Plan: A Criticism (Bombay, 1945)Google Scholar; and Banerjea, B. N., Alphabet of Fascist Economics: A Critique of the Bombay Plan of Economic Development of India (Calcutta, 1944)Google Scholar.

106 Wadia and Merchant, The Bombay Plan: A Criticism, 49.

107 J. R. D. Tata to Birla, 12 Aug. 1944, File T-1, Tata J. R. D., Birla Papers, Series II.

108 Agarwal was then Principal of Seksaria College of Commerce in Wardha and son-in-law of industrialist Jamnalal Bajaj. Gandhi endorsed his book liberally by commending Agarwal as “one of those young men who have sacrificed a prosperous, perhaps even brilliant career for the service of the Motherland. Moreover, he happens to be in full sympathy with the way of life for which I stand.” Agarwal, The Gandhian Plan, Foreword by Gandhi, 16 Oct. 1944.

109 Birla to Tata, 15 Aug. 1944, File T-I, Tata, J. R. D., Birla Papers, Series II. The Planners tried hard to show that the Plan was above narrow capitalist considerations. See J. R. D. Tata's speech at the Bombay Rotary Club, 15 Feb. 1944, “A Fifteen Year Plan of Economic Development for India,” TISCO Review, June 1944; “A Plan of Economic Development for India Part II,” in TISCO Review, Mar. 1945.

110 “The Bombay Plan,” Manchester Guardian, 5 July 1944.

111 Shenoy, B. R., The Bombay Plan: A Review of Its Financial Provisions (Bombay, 1944)Google Scholar.

112 E. F. Schumacher, “Bombay Plan: Monetary Theory False,” Observer, 20 May 1945.

113 The critique led Birla to rework the concept. Lokanathan, India's Post-War Reconstruction, 56–57.

114 “Finance of the ‘Bombay Plan,’” Manchester Guardian, 6 July 1944.

115 Lokanathan, India's Post-War Reconstruction, 57.

116 For an understanding of Jawaharlal Nehru's economic ideas, see Rao, V. K. R. V., “Nehru's Economic Vision,” in Jawaharlal Nehru: Centenary Volume, ed. Dikshit, Sheila et al. (Delhi, 1989), 506–13.Google Scholar

117 Venkatsubbiah, Enterprise and Economic Change, 85–86.

118 Ibid., 71–80.

119 Ibid., 71.

120 Birla to Purshottamdas Thakurdas, 17 May 1947, T-7, Thakurdas, Purshottamdas, Sir, Birla Papers, Series II.

121 Another business leader who was actively involved with the Forum of Free Enterprise was Murarji Vaidya of the All-India Manufacturers Association. The Swatantra Party, a right-wing, probusiness party founded in 1959, rallied around the personality of its founder Chakravarti Rajagopalachari. A number of Bombay businessmen supported the party including Homi Mody, J. R. D. Tata, Shroff, and Dharamsey Khatau. The party lacked mass appeal and later also suffered from a shortage of funds. For a study of Swatantra, see Erdman, Howard, Swatantra Party and Indian Conservatism (Cambridge, U.K., 1967)Google Scholar.

122 He later recalled: “He always looked out of the window or asked me to look at the panda in the garden whenever I wanted to talk seriously of economy.” Lala, R. M., The Joy of Achievement: Conversations with J. R. D. Tata (New Delhi, 1995)Google Scholar, 99.

123 On the early years of planning, see Kudaisya, Medha, “‘A Mighty Adventure’: Institutionalising the Idea of Planning in Post-colonial India, 1947–60,” Modern Asian Studies 43, no. 4 (2009)CrossRefGoogle Scholar.

124 Sanyal, “The Curious Case of the Bombay Plan.”

125 H. V. R. Iyengar's address at the second A. D. Shroff Memorial Lecture delivered under the auspices of the Forum of Free Enterprise, Bombay, 27 Oct. 1967.