Page 191 - DHIS204_DHIS205_INDIAN_FREEDOM_STRUGGLE_HINDI

Indian Freedom Struggle (1707–1947 A.D.)

Notes Table 11.2: Rates of Growth in Indian Manufacturing: 195-52 to 1982-83 (per cent)
Industry Group 1951-52 to 1959-60 1960-61 to 1969-70 1970-71 to 1982-83
Textiles 2.98 0.70 5.36
Rubber, Petroleum and 17.54 10.40 3.82
Plastic Products
Chemical Products 7.90 8.39 5.76
Basic Metal and Alloys 6.52 7.01 5.46
Non-electrical Machinery 21.02 17.00 16.09
Electrical Machinery 17.64 14.01 6.17
Transport Equipment 14.83 7.66 3.34

Estimates are trend growth rates based in semi-log functions and relate to the factory sector of Indian
manufacturing.
Source: Selected from Sukhamoy Chakravarty, Development Planning: The Indian Experience, Delhi,
1987, Table 13, p. 111.
growth. It was this, and the food security India was able to achieve once the process of the Green
Revolution took off, which explains India’s ability to retain an independent foreign policy, by
withstanding enormous external pressures.
Dependence on external resources, foreign aid or foreign private investment, was kept quite low.
Net aid utilized by India was only 0.4 per cent of Net National Product at factor cost during the
First Plan, rising to 2.25 and 3.17 per cent during the Second and Third Plan and again falling
drastically since the end-1960s. Also, external resources came mainly as official aid, and according
to one estimate net aid and net foreign private investment came in the ratio of 6:1 between 1948
and 1961. More than 71 per cent of the foreign aid in the First Plan was used for wheat loans,
whereas in the Second and Third Plans foreign aid was used overwhelmingly, nearly 98 per cent,
to fund iron and steel projects and general industrial development, transport and communication
and power. Overall, in the first three Plans, industry, transport and power utilized about 95 per
cent of the foreign aid. (The counterpart funds generated by the PL-480 food aid from the US were
allocated to the above areas.) Soviet aid came in the Second Plan priority areas, i.e., core and basic
industries and that too in the public sector.
The weight of the public sector in the overall economy increased rapidly, and it captured the
‘commanding heights’ of the economy, further marginalizing the presence of an already small
foreign sector. (In India, unlike certain Latin American countries, the public sector did not grow in
collaboration with foreign private capital or multinational corporations.) The total paid-up capital
in government companies as a proportion of the total paid-up capital in the entire corporate sector
rose from 3.4 per cent in 1951 to 30 per cent in 1961. In the early 1970s the proportion had risen to
about 50 per cent and by 1978 it had reached a whopping 75 per cent.
Apart from industry and agriculture, the early planners gave utmost priority to the development
of infrastructure, including education and health, areas greatly neglected in the colonial past. The
average actual Plan expenditure on transport and communication during each of the first three
Plans was about Rs 13 billion, accounting for an average of about 26 per cent of the total Plan
expenditure in each Plan. The corresponding figures for social/community services and power
were Rs 9.4 billion and 19.9 per cent and Rs 6.16 billion and 10.6 per cent respectively. Over time,
Plan investment in these areas (and in irrigation) was to prove critical both in stepping up private
investment and improving its productivity, as was seen so clearly in the case of agriculture with
the coming in of the Green Revolution.
Table 11.3 shows the rapid per capita increase in the availability of some of the infrastructural and
social benefits as they grew several times faster than the population. In 1965-66, as compared to
1950-51, installed capacity of electricity was 4.5 times higher, the number of town and villages
electrified was 14 times higher, hospital beds 2.5 times higher, enrolment in schools was a little

186 LOVELY PROFESSIONAL UNIVERSITY