From 50 Years Ago: Enough of This Planning

Enough of This Planning

With all the huffing and puffing and the large government deficits and forced saving and largesse from other governments, investment in the Indian economy hovered around 14 per cent of national income at its highest, towards the end of the Third Plan. Net domestic saving about the same time was a little below 11 per cent from which level it plumme[t]ed down and was in 1969–70, after three successive good harvests, 8.5 per cent. The decline in saving coincided with the thinning of the aid inflow so that net investment in the first year of the Fourth Plan was a little over 9 per cent of national income compared to 8.5 per cent 15 years ago. One can, in this context, say a great deal about the need to control the Central and State governments’ ­administrative expenditure and to improve the profitability of public sector undertakings whose management admittedly remains as messy as ever (the sole initiative in that direction recently being the induction of certain ‘committed’ individuals whose commitment to the undertakings under their charge did not, however, prove strong enough to withstand the lure of the election). But all said and done, government saving and private corporate saving together account for only about one-fifth of aggregate domestic saving, the rest being provided by the household sector.