Model Answer
0 min readIntroduction
Post-independence India adopted the model of planned economic development, drawing inspiration from the Soviet Union. While P.C. Mahalanobis is often associated with the Second Five Year Plan (1956-61) due to his formulation of the ‘heavy industry’ model, the contributions of C.N. Vakil, a prominent economist and member of the Planning Commission, were equally significant, albeit often overshadowed. Vakil advocated for a more balanced approach, prioritizing agriculture and decentralized planning, a perspective that differed substantially from Mahalanobis’s emphasis on rapid industrialization. Understanding their contrasting visions is crucial to comprehending the trajectory of Indian economic planning in its early years.
C.N. Vakil’s Contributions
C.N. Vakil, a staunch advocate of a decentralized and agrarian-focused approach, believed that India’s development should begin with strengthening its agricultural base. His key contributions included:
- Emphasis on Agriculture: Vakil argued that increasing agricultural production was paramount for ensuring food security, generating employment, and providing raw materials for industries. He believed that neglecting agriculture would lead to inflationary pressures and social unrest.
- Decentralized Planning: He championed the idea of ‘people’s planning’ through Panchayati Raj institutions, advocating for local participation in identifying needs and implementing development programs. This was a precursor to the later emphasis on decentralized planning in India.
- Village-Level Industries: Vakil promoted the development of small-scale and village industries to generate employment and reduce regional disparities. He saw these industries as complementary to large-scale industries, not substitutes.
- Critique of Rapid Industrialization: He cautioned against a rapid and unbalanced push towards heavy industries, arguing that it would divert resources from agriculture and create bottlenecks in the economy.
P.C. Mahalanobis’s Model
P.C. Mahalanobis, a physicist-turned-statistician, formulated the Second Five Year Plan based on a sophisticated mathematical model. His key contributions were:
- Heavy Industry Focus: Mahalanobis advocated for prioritizing the development of heavy industries like steel, iron, and machinery. He believed that these industries were crucial for building a self-reliant and modern economy.
- Capital Accumulation: His model emphasized the importance of capital accumulation and investment in core sectors to drive economic growth. He proposed a high rate of savings and investment to finance industrialization.
- Centralized Planning: Mahalanobis favored a centralized planning approach, with the state playing a dominant role in resource allocation and investment decisions.
- Isi Import Substitution: The model promoted import substitution, aiming to reduce India’s dependence on foreign goods by developing domestic industries.
A Comparative Analysis
The contrasting approaches of Vakil and Mahalanobis can be summarized in the following table:
| Feature | C.N. Vakil | P.C. Mahalanobis |
|---|---|---|
| Primary Focus | Agriculture & Rural Development | Heavy Industry & Capital Accumulation |
| Planning Approach | Decentralized, People’s Planning | Centralized, State-Led |
| Role of Small Industries | Complementary to Large Industries | Subordinate to Large Industries |
| Resource Allocation | Balanced, with priority to agriculture | Skewed towards heavy industries |
While Mahalanobis’s model did lead to significant growth in heavy industries, it also resulted in neglect of agriculture, leading to food shortages in the late 1960s. Vakil’s concerns about the potential imbalances created by a heavy industry-focused approach proved prescient. The Second Five Year Plan, while largely based on Mahalanobis’s model, did incorporate some elements of Vakil’s vision, such as investments in irrigation and rural development, but these were relatively limited.
The debate between Vakil and Mahalanobis reflects a broader ideological struggle within the Indian planning process – a tension between prioritizing equity and social justice versus maximizing economic growth.
Conclusion
In conclusion, while P.C. Mahalanobis’s model dominated the Second Five Year Plan, C.N. Vakil’s contributions were vital in highlighting the importance of agriculture, decentralization, and a balanced approach to development. The eventual shortcomings of the Mahalanobis model underscored the validity of Vakil’s concerns. The legacy of both economists continues to inform debates about India’s development strategy, emphasizing the need for a holistic and inclusive approach that addresses both economic growth and social equity.
Answer Length
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