What is the Bombay Plan?

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → A group of major industrialists met in 1944 to draft a joint proposal for establishing a planned economy in the country.

Option (1) A group of lawyers came together to formulate a legal code for planning. — Incorrect. The Bombay Plan was drafted by industrialists, not lawyers, and it was a plan for the economy, not a legal code.

Option (2) A group of major industrialists met in 1944 to draft a joint proposal for establishing a planned economy in the country. — Correct. Private investors are usually thought to dislike planning, but a section of the big industrialists got together in 1944 and drafted a joint proposal for setting up a planned economy; it was called the Bombay Plan.

Option (3) It marked the initiation of the structural adjustment programme. — Incorrect. The structural adjustment programme, or the new economic reforms, was the radically different turn in economic policy started by Rajiv Gandhi which became very visible in 1991. It moved the economy away from the planned path that the Bombay Plan of 1944 had supported.

Option (4) The Bombay Plan advocated for structural reform for free market. — Incorrect. It was the opposite of a free-market plan: the Bombay Plan wanted the state to take major initiatives in industrial and other economic investments.

NCERT (2025-26): “Planning … We commonly assume that private investors, such as industrialists and big business entrepreneurs, are averse to ideas of planning: they seek an open economy without any state control in the flow of capital. That was not what happened here. Rather, a section of the big industrialists got together in 1944 and drafted a joint proposal for setting up a planned economy in the country. It was called the Bombay Plan. The Bombay Plan wanted the state to take major initiatives in industrial and other economic investments.…”