The Nehru Development Model

Abstract Nehru must be credited with the design of the economic policy framework that India adopted after independence. As such, it is entirely appropriate to label the model India adopted as the Nehru Development Model. Objectives Nehru set out for himself were the removal of poverty, self-sufficiency, and socialism. The strategy to achieve these objectives consisted of the development of heavy industry upfront to maximize long-run growth, small-scale industry to generate employment and production of consumer goods, agriculture to ensure the supply of food, and minimum reliance on international trade. Policy instruments deployed included public-sector control of the commanding heights of the industry, control of private-sector investment through licensing, import licensing, price and distribution controls, and the creation of institutions of technical education. The chapter systematically documents these facts by reference to the writings and speeches of Nehru.