Development planning free from market forces

After attaining political independence in 1947, the Indian leaders and intellectuals accepted the socialistic pattern of society as an overall objective of economic policy and mixed economy as a path to achieve it. In the mixed economy, both market forces and economic planning work side by side and allocate men and material resources for different uses. About the ultimate outcome of the free market philosophy of economic development, the observation of Karl Marx that it would lead us to the imperialism seems to be correct. Unfortunately, in India instead of blaming the free market philosophy of economic development for widespread unemployment and underemployment, income inequality and poverty, the very concept of planned economic development is being blamed and in the name of liberalisation market forces are being allowed to dominate the operation of economy. Before reaching any firm conclusion about the merits and demerits of the planned economic development it seems proper to review briefly but critically the present form of economic planning which has been tried during the last five decades in India. The review of the present form of economic planning reveals that it depends on the theoretical frame i.e. Lewis-Mahalanobis paradigm of Industrialisation - which for raising the magnitude of savings and investment heavily depends on the "short term rate of savings." Overdependence on "short term rate of savings" has forced the Indian leaders and planners to design policies and programmes related to Investment Planning [IP], Human Resource Development [HRD], Research and Development [R&D], Fiscal System [FS], Monetary Policy [MP] and Institutional Frame Including Political Institution [IFIPI] for producing trained manpower, capital, energy, technologies, pollution free environment, infrastructural facilities and services promoting the select use of inputs intensive production processes in the economy.