21/08/2020 16:01

# Lecture 1

# Economic Dimension

* Paradox in India, huge poverty but huge economy too

## Slow Growth Period

### Economic Planning Model

* State planning instead of a market controlled economy (Five year plans)
* Soviet influenced planning model of efficient utilization of available resources dedicated towards progress
* Focused on:
* Economic growth
* Modernization
* Self reliance
* Social justice

#### Keynesianism

* Increased

* * *

* All this led to state controlled plainning in economy
* Also called Nehru-Mahalonobis strategy
* Democratic Socialism
* Capital goods industries for long term development of the country

### Nehru Mahalanobis Strategy [2nd to 7th Five Year Plan]

#### Assumptions

* Deficiency of material Capital
* Low capacity to save
* Underemployment in agricultural sector
* Role of market mechanism

#### Major Strategies

* **Capital goods industry**
* Raising the rate of investment
* Improve productive capacity
* Increased import substitution

* **Direct State intervention in economy**
* Increased interference of state
* License Raj

* **Agrarian reconstruction**
* Community development programme
* Land Reforms:
* Abolish zamindari system

graph TD

State-->Dams
State-->Mining
State-->Educational_Institutions

#### Impact

* Agriculture Suffered
* Unemployment
* License Raj
* Allowed path for widespread corruption