Indian Economy-1

Article-1- The recovery of India: Economic growth in the Nehru Era

Question-“ Nehru Mahalanobis strategy/ model was to serve the end of rapidly raising the
level of income through accelerating growth, as raising the level of income was considered
the means to eliminating poverty” Justify this statement with pros and cons of this
strategy.(Merits/Acievments/advantages-Pros and Demerits/disadvantages/failures-Cons)

This article is about the relationship between the policy decisions and its impact on the
growth of the economy during the period 1950-1964 (termed as Nehru Era)

(a) Immediate after independence the policy makers and planners had an objective of
self-sufficient in food grain production, for which in first five year plan the focus
was on agricultural sector and its productivity. Emphasis on the agricultural sector
produced better result.
(b) But from second five year plan the focus shifted from agriculture to industry and as
a result a heavy industrialisation model was rolled out by Prime Minister Nehru
and his economic adviser PC Mahalanobis which is popularly known as Nehru-
Mahalanobis strategy.
(c) Focus areas of this strategies were-
(1) Heavy goods sectors (Like setting up Iron, Steel,Cement,Electric generating
Industries) Mostly Producers Goods.
(2) Capital Intensive methods of production were adopted.
(3) Huge amount of capital were invested
(4) Strategy was more supply inducing/generating model
(5) Many Public sector undertakings (PSU’s) were setup with huge amount of
capital investment.

(d) Merits/Acievments/advantages-Pros of this strategy were-

(1) Rapid industrialisation-Many Capital intensive and large-scale heavy industries
were setup to support further industrialisation.
(2) Increase in GDP Growth and per capita income
(3) Increase in Investment
(4) Large scale production of industrial output
(5) Many Public sector undertakings (PSU’s) were setup
(6) Compare to OECD Countries India did fairly well in terms of growth rate.

(e) Demerits/disadvantages/failures-Cons were

(1) Ignored importance of small scale industries which is highly labour intensive
and more employment generating
(2) Focused more on supply side strategies and ignored demand side aspect of the
economy.
(3) Adoption of more capital intensive strategies caused less employment
generation
(4) Infrastructure spending and social sector spending were reduced due to heavy
industrialisation strategy of huge capital investment.
(5) Again reoccurrence of food problem during 1950-164 due to neglect of
agricultural sector and over emphasis on industries.
(6) PSU’s were poorly performed and became liability and treated as a black hole.
Governmentor.t failed to generate/produce productive results from Loss
making PSU’s.
(7) There was lack of linkage between agriculture and industrial sector.
(8) Strategy was quite imbalanced and unsustainable so could not produce
desirable result as per policy makers and planners expectation.

Conclusion- Resource mobilisation was huge challenge because of capital

intensive and heavy industrialisation strategy. Loss making PSU’s adds more
fiscal constraints for the government. So, despite many pros and cons,
importance of Nehru-Mahalanobis strategy could not be ignored because a
good policy vision but lack of coordination/unsustainable approach and a mix-
up outcomes.

Article-2- Education and Health care- A QUESTION OF QUALITY

Question-2-“Education and health are the two key determinants of economic

growth and inclusive development, these two are major drivers of employment
prospects and more generally a good life for the nation” Explain.

For any country the quality of education and quality of health care facilities
decides the quality of life of the people of that country. The importance of
education and health is priceless and indispensible for economic development
of the country.
Two things tells about the condition of health care and education facilities one
country’s people are getting—
(1) Availability-Number of Schools,Colleges,and Universities for education and
number of Hospitals and Primary Health Centres (PHC’s) available in the
country for its population.
(2) Accessibility—whether people of that country are able access the services
from these institutions meant for health and education. It refers to cost of
accessing education and health care facilities.
For provisioning of better quality of Education for the population of the
country, we need these facilities---
(1) Good number of Schools,Colleges and Universities
(2) Adequate infrastructure in these institutions to facilitate students and
teachers.
(3) Better facilities for research and development with good amount of
public investment( Larger Proportion of GDP to be spent for education)
(4) Regular recruitment of teachers for better student teacher ratio.
(5) Increasing gross enrolment ratio in these institutions through
encouragements, incentives and support from the government.
(6) Making education less expensive so that larger sections of the society
can access education from these institutions.
(7) Provisioning of fellowships at all level of educational institutes.

For provisioning of better quality of health care facilities for the population
of the country, we need these facilities---
(1) Setting up more numbers of Medical Colleges and Hospitals.
(2) Recruitment of good number of doctors and nursing staffs.
(3) Adequate infrastructural supports in Hospitals like number of hospital
beds, medical labs with advanced and developed equipments.
(4) Increasing spending on health care facilities as a proportion of GDP.
(5) Reducing cost of hospitalisation
(6) Setting up more primary health centres in villages and remote areas
where accessing intuitional health care facilities is a distance dreams for
many.
(7) Creating conducive environment for prospering better research and
development in the field of medical education.

Challenges in Education and health care sector-

(1) Shortage of manpower and personnel in both education and health
care.
(2) Declining spending as a proportion and share of GDP.
(3) Lack of infrastructural support to institutions in both areas/sectors.
(4) Shortage of funds in both sectors causing less number of public
funded institutions in both areas,as a result the gap between
demand for education and health is fulfilled by private owned
institutions who charges hefty amount for supplying services.
(5) Declining quality of education and health care is a common feature
which is widely visible in public funded institutions inboth
areas/sectors.
By addressing all these issues/challenges we can ensure for better
education and health care facilities for growing population of our
country.