Development Strategy in India

In this post, you will learn about the development strategy in India. The basic goals of our Five-Year Plans were “development along socialist lines to secure rapid economic growth and expansion of employment, reduction of disparities in income and wealth, prevention of concentration of economic power and creation of values and attitudes of a free and equal society.” In order to achieve these goals, the planners developed a strategy of planned economic development.



Mahalanobis Model of Growth

You must understand that it was only with the Second Plan that there was a clear expression of a strategy of development by Indian planners. Prof. P.C. Mahalanobis, who was the real architect of the Second Plan, was accountable for presenting a clear strategy of development based on the Russian experience. This strategy emphasised investment in heavy industry to attain industrialisation which was supposed to be the basic condition for rapid economic development.For Jawaharlal Nehru, the first Prime Minister of India, the development of heavy industry was identical with industrialisation. He stated:

“If we are to industrialise, it is of primary importance that we must have the heavy industries which build machines.”

Again, there are some who argue that we must not go in for heavy industry but for lighter ones. Of course, you must analyse that we have to have light industries also but it is not possible to industrialise the nation rapidly without concentrating on the basic industries which produce industrial machines which are utilised in industrial development. Nehru was, thus, extremely forthright in pointing out that industrialisation meant development of heavy industries. The Plan frame of the Second Plan specified this, in unequivocal terms, as follows:

“In the long run, the rate of industrialisation and the growth of the national economy would depend upon the increasing production of coal, electricity, iron and steel, heavy machinery, heavy chemicals and heavy industries generally—which would increase the capacity for capital formation. One important aim is to make India independent as quickly as possible of foreign imports of producer goods so that the accumulation of capital would not be hampered by difficulties in securing supplies of essential producer goods from other countries. The heavy industry must, therefore, be expanded with all possible speed.”

Therefore, the core of the strategy accepted by Indian planners for the Second Plan and with minor alteration for the consequent three Plans (i.e. up to the Fifth Plan)—was rapid industrialisation via lumpy investment on heavy, basic and machine-building industries.

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