Socialist pattern of society

Also called: Avadi resolution · Topic: Politics of Planned Development · NCERT: Class 12, Ch 2 "Era of One-Party Dominance"; Class 12, Ch 3 "Politics of Planned Development"

Meaning

The socialist pattern of society was the goal India set for its economic policy in the mid-1950s. Under it, the state controls the key parts of the economy and growth is meant to cut gaps in income and wealth. Private business is still allowed inside this framework. The Lok Sabha accepted it first, in December 1954. The Congress then made it the party's own goal at its Avadi session, near Madras, in January 1955.

It matters for two reasons:

• It shaped the Second Plan (1956-61) and the Industrial Policy Resolution 1956.
• Politically, the Congress took over a socialist goal. This made it harder for the Socialists to present themselves as a real alternative, and it helped keep one-party dominance in place.

Explanation

What the idea contains

• The state controls the key parts of the economy. Basic and strategic industries are kept for the government.
• Growth must be fair. Development should reduce gaps in income and wealth, not just raise output.
• Private business still has a place. This is not full state ownership. Private firms work alongside a strong public sector (businesses owned by the government).
• People must take part. The Second Plan said this pattern needs wide participation by the people in all activities, and constructive leadership at various levels [3].

Order of events (a common exam trap)

Step	Date	Body	What happened
1	December 1954	Lok Sabha	Passed a resolution accepting the socialist pattern as the aim of economic policy
2	January 1955	Congress, Avadi session (near Madras)	Adopted it as the party's goal
3	1956	Government	The Second Plan reflected it, and the Industrial Policy Resolution 1956 built on it

• Trap: the Lok Sabha resolution came before the Avadi session. Avadi was a party decision, not a parliamentary one.

How it was put into practice

• The Second Plan's own goal: one of its general objectives was to "advance to a socialist pattern of society" [3].
• Industrial Policy Resolution 1956: it was based on making the socialistic pattern of society the goal of economic policy [2].
• Schedule A listed basic and strategic industries.

• Only the state could set up new units in these industries.

• Mahalanobis model: the plan, drafted with the help of P.C. Mahalanobis, put heavy industry in the public sector [2].

• This meant large investment in capital goods (machines and materials used to make other goods).

• Three public sector steel plants came up: Bhilai, Durgapur and Rourkela [2].

• Import substitution (making at home the goods India used to import):

• High import tariffs (taxes on foreign goods) protected Indian industry, both public and private.

Its limits

• Agriculture got lower priority [2]. This raised the risk of food shortages.
• Shortage of foreign exchange (the foreign currency needed to pay for imports):
• The plan relied on large imports paid for with foreign loans [2].

• An acute shortage of foreign exchange forced cuts in the plan's targets [2].

• Prices rose by about 30% during the plan [2].

• Gap between words and practice:
• The party talked about socialism.
• Congress governments still gave incentives to private investors.

In the Constitution and practice

• Where it sits: it was not a constitutional provision. It came from a Lok Sabha resolution (1954) and a Congress party resolution (Avadi, 1955). It was then carried out through the Second Plan and the Industrial Policy Resolution 1956 [2].
• Constitutional link: it fits the Directive Principles of State Policy (guidelines for the government that courts cannot enforce).
• Article 39(b): the ownership and control of material resources should be shared out to serve the common good.
• Article 39(c): the economic system should not lead to wealth gathering in a few hands.

• The word "socialist" was added to the Preamble later, by the 42nd Amendment (1976).

• The planning machinery: the Planning Commission carried out this goal. It was set up in March 1950 by an executive resolution of the Union government, not by the Constitution or an Act of Parliament [2].

• Outcome in practice:
• The Second Plan was only "moderately successful" [2]. Growth was 4.3%, against a target of 4.5% [2].
• Heavy industry got a base, for example Bhilai (USSR help), Rourkela (West Germany) and Durgapur (UK).

• The Third Plan (1961-66) moved agriculture back to top priority [2].

• Political effect (Frankel's reading):

• Francine Frankel, India's Political Economy (1978), saw the Congress pulling two ways:
  • The party backed state ownership and control of key sectors.
  • The governments followed liberal policies that rewarded private investors.
• This vague position kept a broad coalition together: industrialists, landowners, workers and the poor.
• It was attacked from the right by the Swatantra Party (1959) for statism (too much state control, licences and planning).
• It was attacked from the left by the Communists and Socialists, who said the Congress leaned towards big business.

Don't confuse with

• Full socialism / state ownership of everything: the socialist pattern kept private business alive. Only key and strategic sectors (Schedule A) were kept for the state.
• "Socialist" in the Preamble: that word came in through the 42nd Amendment (1976), which changed the Constitution. The socialist pattern was a policy and party goal of 1954-55, with no constitutional amendment behind it.
• Lok Sabha resolution (December 1954) vs Avadi session (January 1955): Parliament accepted the goal first. The Congress party adopted it at Avadi after.
• First Plan vs Second Plan: the First Plan put agriculture first and asked for patience. The Second Plan, which carried the socialist pattern, put heavy industry and the public sector first.

Prelims Hooks

• Avadi session (January 1955) → the Congress adopted the "socialist pattern of society". The Lok Sabha resolution (December 1954) came first.
• The Second Plan (1956-61) listed "advance to a socialist pattern of society" among its general objectives [3].
• Industrial Policy Resolution 1956 was based on the socialistic pattern goal. Schedule A = industries where only the state may set up new units [2].
• Second Plan = Mahalanobis Plan, built on two-sector and four-sector models together with Harrod-Domar [2]. Growth: target 4.5%, achieved 4.3% [2].
• Steel plants of this period: Bhilai – USSR; Rourkela – West Germany; Durgapur – UK. The common trap is swapping Rourkela and Durgapur.
• Swatantra Party (1959) attacked the statism of this era from the right.

Mains Points

• Planning as a political strategy (GS-I):
• By adopting the socialist pattern (Lok Sabha 1954, Avadi 1955), the Congress took over the Socialists' agenda.
• This weakened the opposition and strengthened one-party dominance (the Congress system).

• Frankel shows the gap between the party's socialist words and its governments' pro-investor practice. That gap held a broad coalition together but drew attacks from both Swatantra and the Communists.

• State-led industry vs agriculture (GS-I/GS-III):

• The public sector push built a base of heavy industry, such as the steel plants.
• But farming got lower priority [2], foreign exchange ran short and prices rose by about 30% [2].

• The food crisis of the 1960s and the Third Plan's return to agriculture [2] show the cost of that imbalance.

• Centre's goals vs state action (GS-II, federalism):

• Socialist goals set at the Centre, such as land reform, were watered down by states, whose leaders depended on landed groups.
• Central plans still depend on state governments to carry them out. This lesson holds today in NITI Aayog-era cooperative federalism.

Related concepts

• Mahalanobis model
• Second Five Year Plan
• Import substitution

Read more

• The Second Plan (1956-61): Mahalanobis, heavy industry and the socialist pattern