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STRUCTURAL CONSTRAINTS FORECONOMIC DEVELOPMENT IN INDIA AS

ENVISAGED IN 1950S

Presented by :

Manav Saurav

Nishant Maloo

Roshan Shivan

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WHATWEWILLCOVERINTHIS SESSION

General state of Indian Economy in 1950s.

Structural Constraint for economic development inIndia.

Steps Taken to deal with them.

General state of Indian Economy post LPG

Our Conclusion.

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METHODOLOGY ADOPTED

Review of Literary works:

Paper 1: Growth Performance of the Indian Economy, 1950-89: Problems of the Employment andPoverty

by Dr. Y.K. Alagh

Paper 1: Indian Economic Growth: Constraints and Prospects

by Ranjit K. Sau

Planning and development

by Dr. Sukhamoy Chakarvarty

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STATE OF INDIAN ECONOMYIN1950S

GDP 3.6

Saving-Investment Gap/GDP -1.2

Contribution to GDP

Agriculture 59.0

Industries 13.0

Services 28.0

Poverty more than half the population

Literacy 12.2

Employment Growth Around 2%

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STRUCTURAL CONSTRAINTASSTATEDIN

PROF. Y K ALAGHPAPER.

Structural Constraints

*India inherited fragmented and distorted economyfrom the colonial rule.

* Lack of infrastructure and low efficiency.

* Human resource development neglected.

* Low rate of saving and investment.

*Weakness in sectoral linkages.

* The regional imbalance.

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STRUCTURAL CONSTRAINTASSTATEDIN

RANJIT K. SAUPAPER.

Semi-feudalism

Base of the home market for Indian industry was

narrow.

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STRUCTURAL CONSTRAINTASSTATEDBY

SUKHMOY CHAKARBORTY

Deficiency of Material Capital

Limitations on the speed of capital accumulation.

Agriculture subject to diminishing return.

Inequality in Indian society.

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BROADCATEGORIZATIONOF STRUCTURAL

CONSTRAINT

Economic Constraint

Saving -Investment gap

Productivity and Efficiency in different sectors of the

economy.

Social Constraint

Poverty

Unemployment

Illiteracy

Skill

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DEALINGWITHTHE STRUCTURAL

CONSTRAINT

1st to 3rd Plan

Aimed at overcoming economic constraint.

Trickle down theory for development.

4rth Plan to 7th Plan Aimed at overcoming Social constraint.

8th Plan onwards

Era of LPG reforms aimed at removing the structuralconstraint of Indian Economy. But these were aimed atremoval of economic constraint.

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GENERALSTATE OF INDIAN ECONOMY POST

LPG ERA

GDP 8.7

Saving-Investment Gap/GDP -0.3

Contribution to GDP

Agriculture 18Industries 29

Services 53

Poverty 37.2(2004-05)

Literacy 74%(2011 census)

Employment Growth Around 2%

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CONCLUSION

Structural Constraint for economic development are

mainly socio-economic in nature and inter-related.

Thus need for multi pronged approach. This require

resources. Developing nations have resource

constraints.

Resource Optimization is the solution and this can

be achieved through Planning.

Planning is therefore the initial instrument to deal

with structural constraint.

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THANK YOU

Questions