ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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From 50 Years Ago: Distorted Growth.

Editorial from Volume XI, No's 28, 29 & 30, Special Number July 1959.

The model of unbalanced economic growth is by now familiar, and not only to students of the subject. Before India became a good political risk, eyebrows had been raised abroad by her would-be helpers that in going in for heavy in-dustry, she was committing a cardinal sin. Today things have changed. There is better appreciation in the West of India’ problems, but not so at home. Indian industrialists have two faces – the benign one which welcomes the socialist pattern as the best bulwark and protection for itself, and the other face which frowns, fumes and frets, not in impotent rage either, at what it conveniently calls unbalanced growth. This antipathy against heavy industry on the part of the private sector is patently short-sighted, for the latter strengthens and enriches the private sector tenfold; but it is un-derstandable nevertheless, as heavy industry has been largely reserved for the public sector. Balanced or unbalanced, growth is a long-term affair, and what is noticeable here and now in the sphere of industry is unbalanced growth of the ordinary or garden variety, for considerable production capacity has been built up in the private organised sector as a result of the vigorous investment activity in the first three years of the Second Plan. But something has gone wrong, and this capacity is not being fully utilised. As a consequence, despite so much investment, the rate of in-crease of industrial production has slowed down in the last three years from 9 per cent to 3.1 per cent and 1.5 per cent respectively. This is according to the General Index. But even if the decline in the output of the cotton textile industry is left out of account – this industry, as is well known, has heavily slumped – the rate of increase would still be sharply down.

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