economics m2 industrialization

8/14/2019 Economics m2 Industrialization

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Def initi on and scope ofef initi on and scope ofpl anni ngl anni ng

Planning means systematic utilizationPlanning means systematic utilizationof the available resources at aof the available resources at aprogressive rate so as to secure anprogressive rate so as to secure an

increase in output, employment andincrease in output, employment andsocial welfare of the people.social welfare of the people.Implementation is very important. AImplementation is very important. Acountry may have good plans, but maycountry may have good plans, but maynot have proper machinery for not have proper machinery for implementation.implementation.


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Economicconomic

planninglanningThe problem of developmentThe problem of developmentof an underdeveloped countryof an underdeveloped country

is that of utilizing moreis that of utilizing moreeffectively the potentialeffectively the potentialresources available to theresources available to the

community. This involvescommunity. This involveseconomic planning.economic planning.


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Pla nnin gla nnin g

Definition by Prof WatersonDefinition by Prof Watersonan organized and consciousan organized and conscious

and continual attempt toand continual attempt toselect the best availableselect the best availablealternatives to achievealternatives to achieve

specific goals.specific goals.


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Obj ecti ves of plan ning inbj ecti ves of plan ning inInd iand ia

Increasing national incomeIncreasing national incomeReducing inequalities in theReducing inequalities in thedistribution of income and wealthdistribution of income and wealthElimination of povertyElimination of povertyProviding additional employmentProviding additional employmentRemove the bottlenecks inRemove the bottlenecks inagricultural production,agricultural production,manufacturing capacity andmanufacturing capacity andbalance of paymentsbalance of payments


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Planning in In dialanning in In diaAfter attaining independence, theAfter attaining independence, thegovernment of India set up thegovernment of India set up theplanning commission in 1950 withplanning commission in 1950 with

Prime Minister as the Chairman.Prime Minister as the Chairman.The purpose of the commission was toThe purpose of the commission was toassess carefully the human andassess carefully the human andmaterial resources of the country andmaterial resources of the country andto prepare the plans for the effectiveto prepare the plans for the effectiveuse of resourcesuse of resources


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Planning commissionlanning comm issio n

Set up in 1950 by a resolution of GovtSet up in 1950 by a resolution of Govtof India, under the chairmanship of of India, under the chairmanship of Pandit Jawaharlal Nehru.Pandit Jawaharlal Nehru.

Plan was to prepare a plan for thePlan was to prepare a plan for themost effective and balancedmost effective and balancedutilization of the countrys resourcesutilization of the countrys resources

Only an advisory board entrusted withOnly an advisory board entrusted withthe preparation of plan. It is notthe preparation of plan. It is notresponsible for executionresponsible for execution


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Functi onsuncti ons

To make an assessment of theTo make an assessment of thematerials, capital and humanmaterials, capital and humanresource of the country and findresource of the country and findout possibilities to improveout possibilities to improveTo recommend the allocation of To recommend the allocation of resources between sectors basedresources between sectors basedon priorityon priorityPrepare the final plan documentPrepare the final plan document


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Functionsunctions

Appraise from time to time theAppraise from time to time theprogrss madeprogrss made

Examine specific problems relating toExamine specific problems relating toplanning and developmentplanning and developmentPlanning commission is thus a staff Planning commission is thus a staff agency preparing the planagency preparing the plandocuments and confining its role asdocuments and confining its role asadvisoryadvisory


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ADMI NIS TRAT IONDMI NIS TRAT IONPM will be the Chairman.PM will be the Chairman.A fulltime deputy ChairmanA fulltime deputy ChairmanIncludes 4 full time members and few part timeIncludes 4 full time members and few part timemembers who are important cabinet ministersmembers who are important cabinet ministersSecretary of the commission.Secretary of the commission.

Additional secretary who is in charge of administrationAdditional secretary who is in charge of administrationand co-ordination within commissionand co-ordination within commissionIn addition, there are some senior officers in the ranksIn addition, there are some senior officers in the ranksof deputy secretaries and under secretaries whoof deputy secretaries and under secretaries whowatch the progress of different programs.watch the progress of different programs.Full time members will be eminent men, technicalFull time members will be eminent men, technicalexperts, economists and administers.experts, economists and administers.


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Vari ous di vi sionsari ous di vi sionsThe planningThe planningcommission is acommission is acollective bodycollective bodywith collectivewith collectiveresponsibility.responsibility.Each member isEach member isin charge of ain charge of agroup of group of divisions. Theredivisions. Thereare manyare manydivisionsdivisions

evaluation

general special

coordination

subjeect

Divisions


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Ot her bodies con nec tedt her bodies con nec tedwith pl annin gith pl annin g

comm issi onsomm issi onsNational planning commission, 1965Consists scientists, engineers, economists and it has 12 study groups related topower, mgmt, agriculture, land reforms, education, research, labor, employment

Social welfare, industry, family planning, international trade, natural resource etc

National development commissionConsists of PM-Chairman,chief ministers

and few central ministersFunctions-review the working of plan,discuss problems related to nationaldevelopment, recommend measures,

improve efficiency of administrative services,ensure co-operation of people,NDC is only consultative body

Research program committee ,Consists of leading scientists and economists,

who initiate research through universitiesand research institutions


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An appraisa ln appraisa lHas been entrusted with gigantic task of Has been entrusted with gigantic task of preparing development plans.preparing development plans.Planning has transformed the country fromPlanning has transformed the country fromstagnation to developmentstagnation to development

Made fair allocation of resources and major Made fair allocation of resources and major share went to infrastructural developments,share went to infrastructural developments,agriculture etcagriculture etcHelped backward states by allocating larger Helped backward states by allocating larger

resourcesresourcesEncouraged researchEncouraged researchEvaluation committee assessed projects andEvaluation committee assessed projects andadvised commissionadvised commission


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Limit ations andimit ations andcriticismriticism

The commission exercised unlimitedThe commission exercised unlimitedpowers-many described it parallelpowers-many described it parallelcabinet, super cabinet, fifth wheelcabinet, super cabinet, fifth wheel

of the coachof the coachPolitically motivated-change of govts.Politically motivated-change of govts.The states could not implement theThe states could not implement theprograms due to red-tapism, corruptionprograms due to red-tapism, corruptionand inefficiency. Plans are good butand inefficiency. Plans are good butimplementation is a failureimplementation is a failure


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Limit ations andimit ations andcriticismriticism

Commission has enormousCommission has enormouspowers without any responsibilitypowers without any responsibilityand it is not responsible for failureand it is not responsible for failure

It is only administrative body andIt is only administrative body andit is neither a goal setter or pathit is neither a goal setter or pathmaker maker

State govts are neglectedState govts are neglectedMany targets have become paper Many targets have become paper targetstargets


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In dustria liza ti onn dustr ia l iza ti on

NeedNeedAgriculture developmentAgriculture developmentand industrializationand industrializationDevelopment of indianDevelopment of indianindustryindustry


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Probl ems ofrobl ems ofindustri al izat ionndustri al izat ion

Under-utilization of resourcesUnder-utilization of resourcesLow capital formationLow capital formation

Low level of technologyLow level of technologyPopulation explosionPopulation explosion

Attitude of the peopleAttitude of the people


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Imp orta ncemp orta nce

Material riches andMaterial riches and

industries go together industries go together Less developedLess developedcountries lack industriescountries lack industriesand have to live inand have to live inpovertypoverty


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ImportancemportanceIndustrialization does not mean merelyIndustrialization does not mean merelystarting industries. Even beforestarting industries. Even beforeindependence, India had cotton textileindependence, India had cotton textileindustry, jute industry, sugar industryindustry, jute industry, sugar industry

and also iron and steel industry. Butand also iron and steel industry. ButIndia cannot be called an IndustrializedIndia cannot be called an IndustrializedcountrycountryIndustrialization constituteIndustrialization constitutedevelopment of infra structure likedevelopment of infra structure liketransport, power, communication etctransport, power, communication etcPolitical stability/climatePolitical stability/climateAttitude of the peopleAttitude of the people


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Ne ed fo re ed fo rindustrializationndustrialization

1.1. Increasing the incomeIncreasing the incomesubstantiallysubstantially

2.2. Meeting high income elasticity of Meeting high income elasticity of demanddemand

3.3. Foreign exchange/comfortableForeign exchange/comfortablebalance of paymentsbalance of payments

4.4. Transferring surplus labor Transferring surplus labor 5.5. Providing strength and securityProviding strength and security

to economyto economy


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Agricul tural devel opm entgricul tural devel opm entand i ndust ria li zati onnd i ndust ria li zati on

Improvements in productivity of agriculture isImprovements in productivity of agriculture isone of the most solid means of promotingone of the most solid means of promotingindustrialization.industrialization.Unless agriculture does not modernize,Unless agriculture does not modernize,

industrial expansion will be at low speedindustrial expansion will be at low speedsince majority of population will not havesince majority of population will not havenecessary purchasing power.necessary purchasing power.On the other hand, agricultural improvementOn the other hand, agricultural improvementcannot go very far unless there is industrialcannot go very far unless there is industrialdevelopment to take up released labor anddevelopment to take up released labor andalso to modernize the agriculture.also to modernize the agriculture.Therefore, both are relatedTherefore, both are related


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Eff ects offf ects ofindustri al izat ionndustri al izat ion

Internal structural changes (secondaryInternal structural changes (secondaryindustries, increase of wage earners,industries, increase of wage earners,economic, social, psychological,economic, social, psychological,

political changes)political changes)Foreign trade (imports of consumer Foreign trade (imports of consumer articles will be reduced, imports will bearticles will be reduced, imports will bemainly capital goods)mainly capital goods)Social consequences (standard of Social consequences (standard of living)living)


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Dev elopm ent of Indianev elopm ent of IndianInd us trynd ustry

Industrial production in India is veryIndustrial production in India is veryimpressive since the introduction of impressive since the introduction of planning.planning.Industrial production has crossed moreIndustrial production has crossed morethan 5 timesthan 5 timesModernization took placeModernization took placeIntroduction of capital goodsIntroduction of capital goodsindustries.industries.

Able to produce durable consumer Able to produce durable consumer industries like bi cycles, fans,TVs for industries like bi cycles, fans,TVs for exportsexports


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economics m2 industrialization

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