Prof Sukhamoy Chakravarty was a giant amongst intellectuals, who had a brief and yet very influential stint in policy-making. His influence is in ideas which persist, sometimes in a form, with those who cannot think better. His classic, Capital and Development Planning, was according to Paul Samuelson a book by the economists’ economist. His work on development modelling is well-known as well as the review paper on development theory. This article is on his leadership in Indian policy-making.
Prof Chakravarty showed initially in a very brief dense paper that the Mahalanobis model had to be placed in a historical context, and he set these as disguised unemployment and shadow wage rates for labour, non-substitutability of capital between sectors and questioning the validity of the small country assumption for international trade for an economy of India’s size, particularly with its exportable basket in the mid-1950s (S Chakravarty, 1969). This dense argument forms the core of some of the later literature on development planning. A detailed treatment is in one of the more influential books on development theory and planning of the period written by Jati Sengupta and Karl A Fox in 1969 on optimisation techniques in economic models.
Chakravarty was not satisfied with the empirical work in the Fourth Plan Period which seemingly “proved” some of these assumptions, since in terms of inter-industry flows the mining, metals and machinery sector was shown to be independent from the food and fibre sectors (Manne and Rudra, 1965). Plan models postulated that the two groups of sectors could grow at very different rates, as long as the ‘appropriate’ fiscal policy was followed. However, it was shown that if wage-consumption flows were considered, such planning could soon run into inflationary (Rudra, 1967) and wage good (Alagh, 1967) barriers.
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To Chakravarty, the simple wage goods constraint was a no-brainer. As a successor to the iconic Pitambar Pant who would mark the PPD files I inherited from, I saw that he would mark them from Pitambar to Indu. Indira Gandhi was a shocked when she saw that Pitambar’s successor was a ‘kal ka chokra’, but she had confidence in India’s youth and charged me with the first objective of our plans to ‘feed my people’. When I produced a work plan for agriculture, by now the well-known JNU-PPD studies on sources of agricultural growth, Prof Chakravarty was happy but wanted us to see it in the larger historical perspective beginning with the Scissors Crisis in the Soviet plans and the battles between Trotsky and Stalin, and the difficult task to maintain growth with oscillating terms of trade between sectors. His ASCI lecture has contemporary relevance as shown in Munish Alagh’s book on agricultural price policy.
In terms of the methodology of planning, the Fifth Plan was the major break. To begin with, the Plan was elaborate with a detailed set of models, which in its main essentials continued to the end of the century. Second, the Fifth Plan saw a conscientious attempt at sectoral planning strategies elaborated in considerable detail, which became a part of the planning method. This methodology for the energy sector was derived from the Fuel Policy Report of 1972 (Government of India, Planning Commission, 1974). Subsequently, an agricultural sub-model was developed from detailed studies (see Government of India, 1978, 1979; and YK Alagh, 1992, for elaboration of the methodology of sub-modelling).Third, great advances were made in the formulation and implementation of project selection procedures as part of the Plan.
Analytically, Chakravarty was interested in introducing behavioural consumption parameters more elaborate than the log normal distribution, to model prices as a part of the system, and a task force was set up under my supervision which developed income and price elasticities for the rich and poor in rural and urban areas. It did so using complete demand system. His early push has not received the attention it deserved, although there was considerable global recognition as shown in the Festschrift to Jan Tinbergen edited by Cohen, Cornillise, Teekens and Thorbecke (1984) and the paper by YK Alagh, et al, in it; also the appreciation by Lance Taylor (1991) of their use in policy reform in transitional regimes.
I met Prof Chakravarty in the early 1970s because he had developed an interest in multi-level planning. Apart from inviting scholars like Janos Kornai to the Planning Commission, he was interested in the deficiency of command planning. The fact that the Soviets used his book for their planning models was not enough to him and he marvelled at the inflexibility of their systems. We had, in Ahmedabad, prepared a model for the Long-Term Perspective Plan of Gujarat. He came to see our work and was happy. The fact that the first regional input output system used for planning in India also showed that the economy was suffering on account of its colonial heritage, inter-industry linkages were few and the systems that were block diagonal had profound implications for multi-sectoral multi-regional models, and this provoked him. His longish paper on multi-level planning was the result and it is still a refreshing reading for those who believe in strategic planning rather than detailed controls or policy as a tool of giving equal market opportunities to unequal areas and disadvantaged people.
When Jan Tinbergen retired, his most illustrious student Chakravarty was the first recipient of the Tinbergen Chair. When I attended the seminar in Tinbergen’s honour which led to the Cornillise book, I could see the esteem Chakravarty was held in. Jan Pronk was the second recipient of the Chair, following Chakravarty. He was hesitant to go since the Sixth Plan work was important to him, but we told him he must accept that great honour and we will hold the fort in his absence. He had a heart attack on the journey back, and Vijay Kelkar and me, waiting at the airport, whisked him away to AIIMS. His wife Lolitaji was relieved to see that he was with his friends again. He used to come to my home in RK Puram when he would come later for his tests and we would reminisce. He chaired the Prime Minister’s Economic Advisory Council, but alas briefly. Those whom the Gods love die young, and he was taken away when he could have done so much.
(Based on an invited speech at the naming of the RIS Library in the name of Sukhomoy Chakravarty by Manmohan Singh on March 18, 2017)
The author, an economist and chancellor of Central University of Gujarat, is a former Union minister