India’s Economic Development Strategies 1951–2000 A.D. PDF
Preview India’s Economic Development Strategies 1951–2000 A.D.
INDIA'S ECONOMIC DEVELOPMENT STRATEGIES, 1951-2000 A.D. INDIA'S ECONOMIC DEVELOPMENT STRATEGIES 1951-2000 A.D. PROF. J.N. MONGIA Editor D. REIDEL PUBLISHING COMPANY M A \1EMBER OF THE KLUWl:R ACADE'"lIC PUBLISHERS GRGUP DORDRECHT I BOSTON / LANCASTER I TOK YO Library of Congress Cataloging-ill-Publication Data Main entry III/del' title : India's economic development strategies, 1951-2000 A.D. Includes index. \. India-Economic policy-1947-- -Addresses, essays, lectures. 1. Mongia, J. N., 1928- HC435.2.16227 1%6 338.954 85-30173 ISBN-13: 978-94-010-8550-2 e-ISBN-13:978-94-009-4614-9 DOl: 10.1007/978-94-009-4614-9 Distributors for India Allied Publishers Private Limited, India Distriblltors for the U.S.A. alld Callada Kluwer Academic Publishers 190 Old Derby Street, Hingham, MA 02043, U.S.A. Distrih/ltors lor a/lre1l1oinillg (OUJltries Kluwer Academic Publishers Group P. O. B()x 322, 3000 AH Dordrecht, Holland PI/bl ished by Allied Publishers Private Limited, India ill co-edition lFitlz D. Ueidel Publishing Company, Dordrecht, Holland All rights rescl'l'ed Cl::) J. N. Mongia 1985 Softcover reprint of the hardcover 1st edition 1985 No pal t of the maferial protected by this copyright notice may be reproduced or utilized ill any form or by any means, electronic or mechanical, including pho!ocopying, recording or by any information storage and retrieval ~ystem, without written permission from the copyright owner. Published by R. N. Sachdev alld prillud by Pratibha Printing Press F-117, Sudarshan Park, New Delhi 11 0015 Dedicated to the memory of Late Smt. Indira Gandhi - the eternal woman- Contents Page PREFACE J.N. MOllgia xi EDITOR'S NOTE J.N. Mongia xv INDIRA GANDHI-A TRIBUTE V.K.R.v. Rao xxv PROLOGUE-INDIA'S ECONOMIC DEVELOPMENT STRATEGIES: AN APPRAISAL A.M. Khusro xxxv Strategies relating to 1. POPULATION Ashish Bose and Vir Narain 2. AGRICULTURE P.C. Joshi 25 3. !NDUSTRY Manmohall Singh 67 4. SMALL-SCALE SECTOR R.P.S. Verma and J.D. Verma 117 5. FISCAL MANAGEMENT G. Thimmaiah 153 6. DEFICIT FINANCING J.N. Mongia 201 7. INFLATION CONTROL AND PRICE REGULATION P.D. Ojha 239 vii viii 8. FOREIGN TRADE AND BALANCE OF PAYMBNT V.R. Panchmukhi 291 9. LABOUR AND INDUSTRIAL RELATIONS C.P. Thakur 315 10. WAGES AND INCOMES Malcolm S. Adiseshiah 349 I I. PRODUC f1VITY A.N. Saxena 385 12. ENERGY S.L. Khosla 417 13. TRANSPORT R.K. Saggar and J.N. Mongia 453 14. POVERTY S.P. Gupta 495 15. RURAL DEVELOPMENT (SOME ASPECTS) D. Bal1dyopadhyay 517 16. HOUSING AND URBAN RENEWAL J.N. Mongia 539 17. URBANIZATION V. Nath 585 18. PUBLIC ADMINISTRATION AND PLAN IMPLEMENTATION P. R. Dubhashi 517 EPILOGUE-ECONOMIC STRATEGIES FOR THE NINETIES L.K. Jha 641 The Contributors 669 Appendix-Summary of Seventh Plan (1985-90) 681 Appendix Il-India's Long-Term Fiscal Policy 713 Index 756 Words of Wisdom "The emphasis on rural employment through NREP, RLEGP and IRDP continues. However, much closer monitoring and much tighter planning and organisation are essential for effective imple mentation. From all over the country I get reports that beneficia ries are seldom able to make full use of the assistance which we give them because of shortage or even the complete lack of back ward and forward linkages. Are we providing such linkages ?" "The tasks that I have outlined call for radical changes in this sphere. I would suggest that our priorities in the Seventh Plan should be FOOD, WORK, and PRODUCTIVITY and these considerations should guide alternative growth scenarios. In Hindi we could say 'ROTI, KAM, UTPADAN hamara lakshya hona chahiye". "Freedom cannot be complete without economic security. That is way we have consistenly laid stress not only on more pro duction and development but also on distributive justice. The removal of poverty has always been an objective which my Govern ment, my party and I have consistently kept before us". -"The success or failure of any technological innovation depends on economic considerations. The main reason for the gap between knowledge gathered in our laboratories and their application by industry is inadequate interaction between technologists and economists. I want closer collaboration between scientists and social scientists. Social scientists should be inducted into our major applied research laboratories, so that the socio-economic aspects of technology transfer are attended to concurrently." "The question of the backward classes is one which is impor tant not only for those who belong to those classes or castes or to backward regions. It is a national question and it is one with which all of us have to concern ourselves if we want balance and equality in our society, if we want peace and harmony, without which there can be no economic or other progress •... " ix x "Oil is to modern industry what blood is to our bodies. So it is perhaps natural that it should become a politically explosive item, influencing world politics and world economics and leading to all kinds of tensions, alliances and confrontations. We cannot regard oil merely as an essential commodity but have always to keep in view its political sensitivity and the consequences of any action connected with it." "We do not look for magic deliverance. The only sure road to prosperity is to mobilize our peoples for work. Enduring solutions call for the strengthening of our own economies towards self-reliance. This does not preclude international co-operation. The two are mutually supportive. Hence, along with a North South dialogue, we urge greater co-operation among developing countries. South-South co-operation is an integral part of the New International Economic Order that we envisage." "The benefits flowing from a host of development schemes, especially from the relatively recent programmes for the alleviation of poverty, are gradually reaching down. We can't reach 700miIIion people all at once. Even if we had all the finances we would not be able to do it. It is a long and gradual process and in it we have to get the people's participation in a large measure and of course the participation of the State Governments. So far as we are concerned, we make no distinction between those States which are ruled by those who are in opposition. In our planning, in the implementation of the plan, in extending our help to them, we give absolutely equal treatment." "Most developing countries today find themselves in what is known as a debt trap. But the Indian economy is strong and stable. We have had handsome acknowledgement of this fact by Heads of Governments and by international financial institutions. But I want to say here that this is not just an accident. It is the result of prudent management. It is the result of our planning and the manner in which we are trying to implement our plans and our programmes. " -Indira Gandhi Preface It has been often said, even by dispassionate observers, that our economic policies built on ideological considerations and economic assumptions are far removed from the realities of our situation. For more than three decades, we have been striving to design an economic policy and a planning procedure that are distinctly Indian, but the effort has often resulted in only mixing and merging borro wed ideas and experiences. However, whatever may have been the ideological elements influencing the thinking on economic policies in the formative period of the pre-independence days, the situation has changed considerably in the actual formation of economic policies since Independence, and the effort has been not to be too closely identified with any ideology, but to work out a policy that will draw upon all these ideological positions. To what extent we have succeeded, required a detailed examination. Accordingly, I brought out, a few years ago, a treatise on 'India's Economic Policies' which continues to be extremely popular, with the inteIlec tual elite, the world over. In this, the learned contributors, dwelt at length on the different aspects of India's Economic Policies from 1947-77, and brought out the strength and weaknesses of the Indian economic scene. The present work on 'India's Economic Development Strategies' is born out of the conviction that what India needs now is a set of strategies, which are a consistent set of policies, and that there is an urgent need for the same in Indian Planning. This strong conviction has propelled me to design the present work which has the benefit of contributions by some of the most eminent econo mists and economic administrators of India who also happen to be xi xu admirers of the late Prime Minister's contributions to India's economic planning and policy. Indeed, the decision to dedicate this Volume to her memory is an ample testimony of the contri butors' recognition of her deep and ever-lasting contribution in the field. Her major contribution to Indian economic development was in the field of social justice to which she gave a new and vigorous thrust during her Prime Ministership, adding a visible content to the doctrine of economic growth with social justice. She made garibi hatao (eradicate poverty) the guiding slogan of her economic policy and took the lead in promoting plans for a direct attack on poverty. Her personal sponsorship of the 20-Point Programmes gave a new dimension to our plan priorities, the implementation of which had an undoubted effect on the socio economic development of the country. Under the able stewardship of our dynamic Prime Minister Shri Rajiv Gandhi, India has now started making rapid strides towards the 21 st century. It is against this background that India's economic strategies from now onwards to 2000 A.D. have to be viewed. It is possible that any such attempt may be frowned upon because of the misconception that the adoption of new strategies implies a condemnation of old ones, and this is tantamount to a confession of failure. Nothing can be farther from the truth since development is a dynamic process, and strategies for development cannot be static. The very process of development brings about changes which open new opportunities and also give rise to fresh challenges. A change in strategy is necessitated as much by the success of previous -strategies as by their shortcomings. It is these new challenges which have set in motion a process of liberalization which encompasses many important spheres of economic strategies viz. Industry, Commerce, Foreign Trade, Monetary and Fiscal Management etc. A process has to be set in motion which will ensure that lndians must stand on their own feet relying more on resourcefulness rather than resources, in an atmosphere of liberty rather than license. The greatest debt I have incurred in this venture is to the various contributors who agreed to cooperate in view of their
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