October 31, 2024

By Sunil Mani*

K.N. Raj’s contributions were deeply rooted in his belief that economic policies should serve the broader goals of human welfare and equity rather than just aggregate economic growth.

He had a key role in shaping India’s economic policies in the decades following the country’s independence from British rule in 1947. He prepared India's first balance of payments estimates and contributed to the drafting of the country's First Five-Year Plan (1951-1956).

As part of such work, he analyzed the political economy of intermediate regimes, exploring the complex dynamics of countries which housed a mix of capitalist and pre-capitalist structures. India’s adoption of a mixed economy model under Jawaharlal Nehru, India’s first Prime Minister, (1947-1964), reflected the essence of such a regime where government-owned enterprises coexisted with private businesses.

The government controlled and funded growth of capital-intensive strategic sectors like steel, electricity, and railways, while the private sector operated in businesses such as textiles, small-scale manufacturing, and agriculture. Raj’s framework sought to understand how India can avoid the extremes of both capitalism and socialism, pursuing a path that aimed at inclusive growth, with state intervention, without eliminating private enterprise.

Raj’s work influenced the formulation of economic policies to tackle similar conditions in other post-colonial nations as well as contributed significantly to the academic understanding of such policies.

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