Nehru’s Economic Legacy




These are days of demonising Nehru. The demonisation has received a big fillip with the rise of the BJP in recent years, and its coming to power in 2014, paradoxically in the year of Jawaharlal Nehru’s 125th birth anniversary. Nehru was one the best exponents and implementers of the Indian national movement’s “idea of India”, a secular, democratic and sovereign India. The communal forces, which had nothing to do with the national movement and, in fact, acted as the chief bulwark against it, much to the delight of the colonial State, naturally could not tolerate Nehru.

In their eyes, everything that Nehru did, his politics as well as his economic initiatives, were all wrong. Politically, his stellar role in establishing and nurturing a secular and democratic polity in India, rescuing it from the holocaust-like situation created by Partition, mass communal carnage and the murder of Mahatma Gandhi by Hindu communal forces, robbed these forces of using this huge opportunity to build a “Hindu State” in India, the counterpart of a “Muslim” Pakistan. No wonder the Hindutva leaders’ constant lament is “if only” Nehru was not the prime minister. One Hindutva functionary in Kerala went to the extent of saying that Gandhi’s assassin should have shot Nehru instead!

In the economic sphere, Nehru was the architect of undertaking the stupendous task of creating an independent, self-reliant economy, of un-structuring the colonial structure created over 200 years of colonial rule. Predictably, once again in sync with the colonialists, the communalists run down and dismiss the enormous achievement of the Nehruvian era. Nehru is accused of neglecting agriculture, not completing the land reform process rigorously, ignoring primary education, excessive protectionism, promoting capital goods industries at the cost of consumer good industries, creating a dirigiste environment leading to the licence-permit raj and much else.


Mridula Mukherjee | Professor, Centre For Historical Studies, JNU
Aditya Mukherjee | Professor, Centre For Historical Studies, JNU



Neo-colonial scholars such as Tirthankar Roy and Meghnad Desai (with Desai’s additional fondness for the BJP) see the first 40 years after independence, the period associated with the Nehruvian paradigm, as the “wasted years”. The positive phase is seen to be the colonial years and then again the phase after 1991. The Nehruvian years were the fly in the ointment. They conflate colonial globalisation with globalisation under the watchful eyes of an independent nation state.

This is a completely ahistorical understanding of the situation. If the post-1991 strategy was adopted in the 1950s, India would surely have headed towards becoming a “banana republic”. Conversely, it would not make any sense to have the 1950s economic strategy in the 1990s when the nature of the global economy, including the Indian economy, had undergone fundamental changes. The Nehruvian era created the conditions for the future opening up and growth, where India could participate in the globalisation process with advantage to itself. Today’s India is possible because of the base laid in the early decades after independence and has not emerged despite it.

A quick look at the Nehruvian strategy and its success is in order to try and set the record straight in an atmosphere where mythologies are so readily accepted as reality, simply because they get asserted repeatedly.

Nehru and the early Indian planners had correctly understood that political independence was of little value if it could not be used to acquire, first, economic and, then, intellectual independence. At independence, because of the nature of colonialism the country had been subjected to, India was almost completely dependent on the advanced world for capital goods and technology for making any investment. There was virtually no production of capital goods. In 1950, India met nearly 90 percent of its needs of machines and even machine tools through imports. This meant that despite political independence, India was completely dependent on the advanced countries for achieving any economic growth though investment.