How India’s economy under Nehru came to be steered by a professor and an academic institute

How did an academic institute in the quiet outskirts of a city far away from the capital come to determine the path of a country of hundreds of millions? It is a question that has been asked from the middle of the twentieth century because it marked a turning point for India’s economy.

PC Mahalanobis and the Indian Statistical Institute played a crucial role in crafting independent India’s economic strategy. The era-defining Second Five-Year Plan (1956-61), which they authored, stamped its imprint on subsequent decades. In some ways, Mahalanobis and the Institute were responsible for the country’s economic trajectory right up to the period of market reforms in the early 1990s.

Less clear, though, is how they came by such influence. What took them from academy to policy, from the dense foliage of a lakeside campus in Calcutta’s suburbs to the bland yet highly consequential offices of the Planning Commission in New Delhi?

The answer lies in how important data was to centralised economic planning. A planning-induced expansion in the state’s data infrastructure had formalised the relationship between planning and statistics. It was this process that placed the Professor [as Mahalanobis was widely known] and the Institute in a position where they could, in turn, shape policy.

Ultimately, the impact of planning on statistics led to a statistician shaping the Plan. The interlacing of planning and statistics drew the Professor and the Institute ever deeper into the corridors of the Yojana Bhavan. They would soon play starring roles in the country’s development saga.

Capitalising on a context in which national statistics were seen as integral to economic planning, the Professor courted foreign experts to bolster his claim to writing economic policy. This involved long tours abroad and hosting hundreds of intellectuals at the Institute’s Baranagore campus, during which he wooed like-minded social scientists and credentialed foreign economists…

When confronting rivals in government and the professoriate during the Second Five-Year Plan debates, Mahalanobis was able to weaponise the credibility he had acquired from years of brushing shoulders with a curated army of foreign academics.

Global expertise was employed to outmanoeuvre powerful critics within the Planning Commission. In order to jostle their way to a seat at the policymaking table, the Professor and the Institute leveraged a variety of resources: their centrality to national statistical organisations (which had become critical to planning), proximity to the Prime Minister and finance minister, and support cultivated from actors and institutions on both sides of the Cold War. The Planning Commission did not roll out the red carpet for the Professor. It was a coup whose swiftness took Delhi by surprise.

Mahalanobis’ jet-setting drew attention. As academics go, he was no ordinary conference-hopper. As an awed and perhaps slightly bewildered [American statistician] Edwards Deming later recalled, “Probably no statistician ever attended so many meetings the world over.” The travels earned a separate section in the Institute’s Annual Reports and were later published in the house journal Sankhya.…

The Professor left India in order to be relevant in India. As one of India’s pre-eminent scientists and her foremost statistician, Mahalanobis was invited to universities and academic institutes around the world. He revelled in them because, apart from satiating his varied intellectual urges, they magnified his reputation at home. For while his scientific bona fides were above reproach, as an economist he had no credentials. If he aspired to be a planner, he would need backers.

The Professor networked with a vengeance. Committing a few months to travel almost every year, Mahalanobis crisscrossed continents in his role as unofficial scientific ambassador and public intellectual, most often visiting Europe, the United States and the Soviet Union. The combination of academic renown, involvement in every aspect of Indian statistics, a seeming lack of political affiliation and access to the Indian government opened doors on both sides of the Iron Curtain. These included the offices of statisticians, planners and economists from Washington to Moscow, Tokyo to Puerto Rico….

The Professor travelled to the Soviet Union at the end of June [1954]…[His] spirits were lifted by the Soviet welcome. He realised that his hosts wanted to strengthen relations with India because it appeared a possible political ally, and Nehru’s prestige was at its zenith internationally.

He was struck by the repeated references to the Prime Minister and the emotion his homeland evoked. Wherever he went, across class, people spoke with admiration for Nehru. In Leningrad (St Petersburg), he attended a church service one Sunday. When he emerged, “some of the women were so overcome to speak of India and Nehru that two or three began to cry softly – tears came to their eyes in an upsurge of feeling”.

While this sentimentalism might appear an exaggeration, other Indian travellers to the Soviet Union confirm Nehru’s remarkable personal popularity. Touring the Russian countryside a few months later, filmmaker Khwaja Ahmad Abbas wrote to his brother about what transpired when he and his Soviet writer friends stopped in a small town for lunch. One of the Russians proposed a toast: “‘to Nehru – the most important man in the world today’ – and, lo and behold, a crowd of people from other tables and even waiters and waitresses crowded around to join us in drinking this toast.”

It was a good time to be an Indian in Russia. Abbas wrote of the “universal respect and affection for our PM” as well as the Russians’ enthusiasm for Indian cinema. He was taken aback by the “unbelievable popularity” of the film Awara and its song Awara Hoon “which has swept the whole country”.

Mahalanobis was bowled over by the hospitality. He was invited by Georgy Aleksandrov, the Soviet Minister of Culture, to spend a day at his riverside cottage on the banks of the Moskva.

It was a rare gesture for a ranking member of the Soviet establishment, apparently due to fears of espionage. Located outside the city amidst pine and conifer, Aleksandrov’s two-storied retreat was among a cluster of dachas belonging to the Council of Ministers, a group described by the Professor as the “highest level of society”.

Joined by the Rubinsteins and other members of the Academy of Sciences, they grazed on a “distressingly lavish” spread, sipped choice wines and raised their glasses in many toasts. One was to the health of the two nations’ Prime Ministers. Another invoked Newton’s laws of gravitation to explain the relationship between China, India and the USSR. Elaborate and convoluted, but unsurprising, given the company. “The whole atmosphere is something wonderful,” the Professor proclaimed in rapture.

Occasionally, the thrill was rudely interrupted by doubt. In the midst of relaying the uplifting Muscovite goings-on to Pitambar Pant, he paused. ‘These people have taken me very seriously – much too seriously, I am afraid – because I do not know if we would be able to do anything real except write background papers.” The news from the Planning Commission and Government of India was often deflating.

Just as airborne castles began to take shape, he would receive mail from Delhi and “drop down to earth”. Matters were coming to a head for the frustrated Professor. He was tired of producing background notes and studies, moving “furiously like a rocking horse without any progress”.

At half past midnight in mid-July, Mahalanobis peered out of his hotel room across Red Square – ringed by Lenin’s mausoleum and the fairy-tale domes of Saint Basil’s Cathedral – at the lights twinkling atop the Kremlin’s towers. The Professor wished there were closer relations between Delhi, Beijing and Moscow.

He sensed that the moment on which his life would hinge was imminent: there was “a growing conviction of a kind of crisis”. It wasn’t possible anymore to stick to statistics. What really interested him was planning for national development. “I hope New Delhi will give us a chance.”

Excerpted with permission from Planning Democracy: How a Professor, an Institute and an Idea Shaped India, Nikhil Menon, Penguin Books.