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in such times. The other institution was
that of the market. The market brought
with itself a number of issues which were
quiet clear when a comparative picture
was drawn of those economies that had
developed markets and those that had
only nominal ones. Underdeveloped
economies and underdeveloped markets
seemingly share a sine qua non relationship
inimical to economic development.
The State and Market relationship had,
then, a validity that needed to be accounted
for. If these were some of the
important institutions, then there were
certain methodologies that were required
to be put in place so as to provide a manner
to address these as part of a common
framework. Economic planning was an
early answer as the bridge between the
State and that of market. The role of the
State in forging the relationship by adopting
this bridge was an activity of essence.
The State in India opted for this as part of
its intervention in the politico-economic
landscape. It did so by setting up the Planning
Commission, and also made this institution
organizationally relevant by relating
it to the political leadership in
charge of deciding on construct of economic
policies expected to engender the
process of economic development. Planning
for the economy was a critical input,
and the State soon after independence
took steps to institutionalize the process
of planning for the economy as part of the
economic development process.
The prospects of what are identifi ed as
‘market failure’ and that of ‘government
failure’ were aspects that could well happen
on putting the stated State, market
and economic planning troika-schema
into practice. These were concerns not
just for select nation states as India. There
were issues that were faced by emergent
nations across the world at those points in
time. Where the differences between na-
tion states emerged as issue of conse-
quence was in that of the specifi c historic-
ity of each of these nations. The historic
specifi city of India emerging from long
period of direct colonial rule was different
from that of Korea which had a compara-
tively much shorter period of Japanese
rule. Nonetheless, in both instances the
role of the State in relating with the market
and the adoption of state planning in
matters economic are very much in evidence.
Historic evidence also points out
that the pattern in which this eventually
worked out was quiet different in one nation
state over that of the other. The manner
of intervention that the combination
of State, market and economic planning
was structured, that is the combinatorial
input, was specifi c to a nation state and
the results that were realized say in terms
of the changes in per capita income confi
rm this in good measure. 1 The role of
each of the combinatorial input is important,
and so is that of the effect that the
I NTEGRATED PLANNING
combinatorial input has when brought in
as a whole. The manner in which economic
planning was leveraged by the State
to both intervene and as also to develop
the market was a critical one.
Economic Planning —
Issues that Play a Critical Role
A superfi cial reading of economic planning
as a mode of intervention by the
State would mean taking an instrumentalist
view of that which is meant to be associated
with planning. Economic planning
need not be brought down to a level
of being a mode of an instrumentalist intervention
alone. Viewed as such, the essence
dwindles to one of methodology and
we are presented with an approach that
Economic planning was an early
answer as the bridge between the
State and that of market in India
gets limited to the richness, or the lack of
it, of that methodology. In an early paper,
Hayek initiated a debate on economic
planning2 . And he did so by asking a question,
and which was as to, ‘What is the
problem we wish to solve when we try to
construct a rational economic order?’ 3
Hayek alluded that if looked at using common
suppositions, that is the instrumentalist
format referred to here, the answer
is not far and it is amenable to logical inference.
What is implied is that in case we
have all the appropriate information
about what society wants, and also the
obtainable ways and means to address
these, the economic calculus to be adopted
for addressing the economic problem
posed is not a diffi cult one to resolve. The
error in methodology is in the assumption
that we know the blueprint in which allo-
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