A Two-Sector Open Economy Framework Suman Sarkar The two-sector model presented in this paper takes into account foreign trade which was assumed to be absent in Mahalanobis model in addition to aspects of sectoral investment allocation in the Indian economy. Keeping in view the changes that may result from the government's New Economic Policy in the shares of the consumer goods and investment goods sectors in total national investment, alternative economic growth projections have been made for a period of 20 years. Using the new model, the study makes an attempt to assess the prospects of a relatively high long-term growth rate by increasing the level of efficiency in domestic resource use and the inflow of investment goods from abroad.
