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Unit 3: Planning and Economic Development in the Era of Globalisation

(c) This has a very narrow focus since it largely concentrates on the corporate sector which Notes
accounts for only 10 per cent of GDP.
(d) By facilitating imports, the Government has opened the import window too wide and
consequently, the benefits of rising exports are more than offset by much greater rise in
imports leading to a larger trade gap.

(e) Ultimately, the model focuses a capital intensive design of development and there are
severe apprehensions about its employment-potential. It is being made out that it may
cause unemployment in the short run but will take care of it in the long run. But how long
is the long-run is not specified. Further, an economy in which the growth of labour force
is taking place at the rate of about 1.8% annually, the implications of the model in terms of
slowing down the rate of growth of employment are of severe nature.
It is an important area to be highlighted that some have debated that the LPG Model has
followed the East Asian Miracle which was established by South Korea, Japan, Taiwan and to
some extent Indonesia, Malaysia and China. This is not accurate. Japan did not follow the IMP -
World Bank Model based on free market economy, open door policies and liberalisation. Japan,
in fact, practised restricted operation of market mechanism with the State playing an active role
in directing the economy for the welfare of the community. This independent path followed by
Japan was duplicated by South Korea and Taiwan. Malaysia and Indonesia also succeeded on
this path for a few years.
The Chinese growth model, for example, is rooted in its own traditions and its decision to
internationalise is encouraged by the desire to use global markets as an instrument to resolve
numerous internal bottlenecks. China still follows the path of self-reliance, though it is not a
closed economy. You must understand that for China, self-reliance is the ‘motor of growth’, and
China has investigated a simple balanced two-way flow of goods and services and capital with
the rest of the world. Chinese Model, thus, cannot be characterised as a neo-classical liberalisation
model. It is a model of its own kind which blends an open economy with self-reliance and
avoids an excessive dependency syndrome.
You need to know that the LPG Model has complied with the IMP-World Bank prescription of
maintenance and structural adjustment. When measured in the light of the experiences of Latin
America, Africa and East Asian Countries, it raises severe doubts in the minds of the people
whether we are following the correct path of development. Dudley Seers has correctly suggested
three parameters by which the phase of development of a nation can be measured. They are:
What has been occurring to poverty?, to unemployment?, and to inequality? The experience of
a decade or more of LPG Model does not offer conclusive indication of substantial improvement
of these parameters. Instead some of them have become worse.

3.2.4 PURA-A Neo-Gandhian Approach to Development

It is noteworthy that Dr A.PJ. Abdul Kalam, ever since he became the President of India has been
promoting his Vision 2020, and, to remove poverty from India, he has been emphasising the
adoption of PURA (providing Urban Amenities in Rural Areas). In his address to the Food
Security Summit on 5th February 2004, he summarised the concept and strategy of PURA as the
lever of economic upliftment of the villages. India currently has 260 million people living
below the poverty line. The GDP growth has been on the average 6% per annum during the last
decade. It has to be progressively risen up to 10% and to be sustained for several years. Then
only it is possible for India to get the position of a developed country. To achieve this, the
roadmap involves integrated action on the following five areas:

1. Agriculture and food processing – You require to note that the nation should target for
360 million tonnes of food and agricultural production by 2020. Other regions of agriculture

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