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    Tenet To Cure Thesc Nnens Shouuh Mabe Enemmnt Egucoditures, Dhe

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    Akshat
    The document discusses India's post-independence economic development strategy known as the "mixed economy model". Key points: 1) After independence, many developing nations adopted a development strategy where the state played a large role in the economy due to an immature private sector and need for massive investments. 2) India's strategy was outlined in its Second Five-Year Plan which aimed to rapidly industrialize and develop heavy industries through public sector investment due to the scale needed and long lag times. 3) The model aimed to reduce imports and achieve self-sufficiency through import substitution while also promoting social welfare goals through state-owned enterprises. The private sector focused on consumer goods and areas with quick profits.

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    © All Rights Reserved
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    Tenet To Cure Thesc Nnens Shouuh Mabe Enemmnt Egucoditures, Dhe

    Uploaded by

    Akshat
    9 views3 pages
    The document discusses India's post-independence economic development strategy known as the "mixed economy model". Key points: 1) After independence, many developing nations adopted a development strategy where the state played a large role in the economy due to an immature private sector and need for massive investments. 2) India's strategy was outlined in its Second Five-Year Plan which aimed to rapidly industrialize and develop heavy industries through public sector investment due to the scale needed and long lag times. 3) The model aimed to reduce imports and achieve self-sufficiency through import substitution while also promoting social welfare goals through state-owned enterprises. The private sector focused on consumer goods and areas with quick profits.

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    The document discusses India's post-independence economic development strategy known as the "mixed economy model". Key points: 1) After independence, many developing nations adopted a development strategy where the state played a large role in the economy due to an immature private sector and need for massive investments. 2) India's strategy was outlined in its Second Five-Year Plan which aimed to rapidly industrialize and develop heavy industries through public sector investment due to the scale needed and long lag times. 3) The model aimed to reduce imports and achieve self-sufficiency through import substitution while also promoting social welfare goals through state-owned enterprises. The private sector focused on consumer goods and areas with quick profits.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    9 views3 pages

    Tenet To Cure Thesc Nnens Shouuh Mabe Enemmnt Egucoditures, Dhe

    Uploaded by

    Akshat
    The document discusses India's post-independence economic development strategy known as the "mixed economy model". Key points: 1) After independence, many developing nations adopted a development strategy where the state played a large role in the economy due to an immature private sector and need for massive investments. 2) India's strategy was outlined in its Second Five-Year Plan which aimed to rapidly industrialize and develop heavy industries through public sector investment due to the scale needed and long lag times. 3) The model aimed to reduce imports and achieve self-sufficiency through import substitution while also promoting social welfare goals through state-owned enterprises. The private sector focused on consumer goods and areas with quick profits.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 3

    9.

    3 THE MINED ECONOMY

    Background

    Afler the Second World W, several developing naicns pot frecdom from
    colonial domination They had 1o decide os a develapment stratcgy, For several
    Fasons most of them hose a deveogment strategy whee the state had a very
    impurtant ole to play.Fin, mn e the co

    ivate sestor was ntdnd noh or maturr mch lo undertake mansive


    ivestmcnt-ofen in sco wih no immodiasc scope for peofits oft a scale that
    the development procos scemod to require The stale had te step in. Secondly.

    Aewod income distributi,thatis there were islands ef riches wiah larse pos
    of peverty, There wre also high uncplaynet levcls The tackt, it was fcl

    vry important role to play. Thinly, uring the Second Woid Wat, widcsprcad
    ue was made of control and rationing with administrative consideration taking
    ocakceove
    the eounomy, Further heginning 199 and through much of the (910s, several
    industrial cconemies esperinced a severe depesicn whos jeblessness was
    a aa only hwed d nghuth, but levels ef

    tenet to cure thesc nnens shouuh mabe enemmnt egucOditures, Dhe


    theories of the eoonomist hn Maynard Keynes advocating state intervention t
    Mubilise the economy wene put isto practical policy fomal
    alation Moreever. the

    nameThe New Ear,At the ame time hat the Wetwaseyperiencing


    depression and uncmplment, the then Soviet Uaice wasindutrialiing ata
    ynot long
    104

    The Mid E
    What the industrial westers world had taàen ceuries to achicve, the Soviet
    Md
    Unn, or soit soemed, would ahieve in decades Social welfare measures wee
    alse ot neylected AIl these imgressed policy makers in the develping natios
    em to ethethinkint ksat tht time washat cial sinoe therie
    particularty eoonomie theories develpod in the wetnd parenly fer the west
    ester

    ocal science uscless


    Ths, it was that devlopin
    eiageda laree, ofen dminant.ntries
    nle embarked on aThi
    for he stte devele ohe
    ent strategy
    sttetegy that
    priate scctor was very broady, what came to be, called the iso coonomy We
    elaet and dhCs atnale atd the merits
    lere we make a s a l l
    s
    The proceding discusos, and the discussions ahut the Endan econuy tefene

    adoptod echusively in the devckoping nation Not so, Eoonmists like Paul
    Nebie descnbed the

    eumple, claims thut in the American economy, the stae, and many by the
    prate sectur undertake lots of economic activitics Morcover, the state
    ale ectr by erngla inga variety of

    WEae above Thathe esmc ae


    puvsding subuidiscd heath senices ast beakh ibutance Soe the poor and eld
    povple Similarly. govermmet espenditure forms a large portion f sotal national

    critics-and indecd the state has ben in retrcat in devcoped countries as also in
    developing countries Wewillcume te this aspect presently
    The second pount to ramenber is that mied econny does not mean a mix
    betwecs scialism and capialisn Alhough many devciping cuustrics that

    ef reulation.
    What thcn is a mied economy

    denote an economic system charcterisod bya mix of private enterprises and


    government owned enterprises A misod coenomny is characterisod by the
    cocuslence ot pvate ownerstp and state owDership ot the ncans ot pradacton
    state, apart from ownenship of means of prodaction, often had a regulatory
    ole

    The Mised Econoy MModel in India

    India's principal economic strategy was givem a blucprint im the Second fiveyear
    Pan, The finst Five Year Pan was over the period of 1951-1956 It was mainly a 105

    Deskearel Planaias poj, e a prgc By he ie, the second fveYcar

    planning esercise had to be growth of national income on a sustainod hasis


    There did exist rich famers and rich poople in other walks of ife but it was fclt
    that in a democratic society, thee wore limits to any diatribution of wcalth and

    forn had b be growth, and it was heped that thc henefits ofgrowth could trickle
    down to the poople in kow socio-eoonomic status, Economist Jagdish Bhagwati
    has opincd that the strategy should be called a 'pulling up' rather than "trickle

    wait for the henefits to come to hem

    mans of orouction, Tere are broadly wo ns of machines, when loked at


    from the eoonomic angle. One type is that of those machines, which prodace
    goods hat consumers will buy. The uther type consits of those machines, which

    latier bype are called heavy industries twas thought important in the straicy of
    the second Five Year Plan (the principal architect of the plan model was PC.
    Maboalanobis and hcnce the strategy is callod Mahalanobis strategE) that there
    he canital sock llere it dcs not can an indiviual spendine money lo hex
    financial asscts like shares or mutual fnd lt means an aggregate economy leve
    addition to the stock of machine. plants, cquipmest, ete.,

    Now for amachine investment of this magnitade, it was felt that the rivate
    sector at the time was simply not in a pesition te undertake it. Moreover.
    imvestment in these and infrastructure imvolod a considerable lag after which
    prufits would start to flow. Indian private capitalists, who were moily in trade.
    Thus, the

    infrastructure, in fact, to cnure ownership of these inhustries and occupy the


    cosanding heights ofthe econony. Also many of these industries were ef a
    strategic nature like Power, Defcnce, and, thes, for the strategic reasons also it
    was thought improper for these to be let to the private sector.

    There was noher plank to the strategy. t was felt that dependence on imports
    for all type ef goods had te be lessenod Foreign excange was a scarce item,
    which had lo be coeeu an g dt
    cope of esperts did not cxist and hence an expot peomotion strategy was ot put
    into place
    Thus, in India the publis sector was givg charge of the heay industries
    indrastratug, darns, ctg State owned mcans of prohuction and other state ewnsd
    firms were guided by an objective of the peomotion of social weltfare. The private
    secter was allowed in areas of comsumet goods and in arcas where econcmics of

    the statc soughi to regulate the pcivate sector thevegh asvstem of incuring in
    onder to peevent build-up of monopolies and unfair business practices
    110

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