NORTH-Gaining on the Round-Abouts

October 6, 1973 foreign aid than are to be found in the Approach document.
FEASIBLE RATE or GROWTH The difficult price situation and the revised estimate of resources also raise the question of the feasible rate of growth in the Fifth Plan. Certain exercises have been carried out in the Planning Commission in a desperate effort to keep intact the growth rates assumed in the Approach document. These exercises have apparently indicated that it may still be possible to achieve an overall growth rate of 5.5 per cent per annum. But they assume a degree of efficiency in the operation of the economy which it is difficult to accept as feasible. Thus in these exercises the capital-output ratio appears to have been arbitrarily lowered below what was assumed in the Approach document, It is argued, in the Commission itself, that in the light of the inflation and the very large lags in utilisation of established capacity and in the creation of fresh capacity in the different sectors of the economy, even a growth rate of 4.5 per cent will call for very considerable effort. It is suggested, therefore, that the Plan's growth target should be scaled down to make it realistic and give it credibility.