UNIT-4 THE LOGICS OF INDIA DEVELOPMENT STUDIES

 A)PLANNING PROCESS:

After India became independent in 1947, the national government stabilized the Planning Commission on March 15, 1950. 

• The planning commission had the power to impose policies on states and for the projects approved by the planning Commission. 
• The Planning Commission had the power to allocate funds to the state governments and various Central government ministries for various programs and projects at the national and state level.
• State governments Did not have much role to play apart from taking part in the meeting. The state government’s rule was confined to the National Development.
• The planning commission did not have any provisions for the appointment of part-time Members.
• The national.Development Council had lieutenant Governs and state chief Ministers Planning Commission had to report to the National Development Commission.
• Planning Commission secretaries were appointed through the usual process. 
• The last Planning Commission had eight full time members. 

• The Planning Commission's organizational structure consisted of full time Members, a member secretary and a deputy Chairperson. 

• The Planning Commission first formulate policies and then state governments were consulted regarding the allocations of funds for the programs or projects. 
• The now-different Planning Commissions was an executive body.

#Objectives of Economic planning in India:

Economic development : This is the main objective of planning in India's economic development of India is measured by the increase.In Gross Domestic Products {GDP}.and per capita income.

Increased level of employment: An important aim of economic planning in India is to better utilize.The available human resource of the country by increasing the employment levels. 
Self sufficiency: India, aims to be self-sufficient in major, Commodities and also increase exports through economic planning. The Indian economic had reached the take-of stage of development during the third five year plan in 1961-66. 
Economic stability :Economic Planning in India also aims at stable market condition in addition to the economic growth of India. This means keeping inflation low while also making sure that deflation in prices does not happen.The wholesale price index rises very high or very low structural defects in the economy are created an economic planning aims to avoid this.
Social welfare and provision of efficient social services: The objectives of all the five year plans, as well as plans suggested by the NITI Aayog aim to increase Labour welfare.Social welfare for all sections of the society.development of social services in india such as education healthcare and emergencies services have been part of planning in india. 
Regional.Development:Economic planning in India aims to reduce regional disparities in development, for example, some states like Punjab, Haryana,Gujarat, Maharashtra and Tamil Nadu are relatively well developed economically by state like Uttar Pradesh, Bihar, Orissa.Assam and Nagaland and economically backward.Others like Karnataka and Andhra Pradesh have uneven development with world class economic centers in cities and a relatively less developed hinterland.Planning in India aims to study these disparities and suggest stretch strategy to reduce them.
Social justice.:This objective of planning is related to all the other objectives and has been a central focus on planning of India. It aims to reduce the population of people living below the poverty line.
Increase its standard of living

#Niti Aayog:

1. Niti Aayog was established by the Government of India on January 1, 2015 as an institutions of national importance through the NITI Aayog.Act 2014.
2. Niti aayog has not been given the mandate or powers to impose policies on state. Niti Aayog is basically a think tank or an advisory body.
3. The powers for the allocation of funds have not been given to NITI Aayog. The powers are with the Finance ministry. 
4. In Niti Aayog, state governments have to play a more proactive role.
5. Based on the requirements, there are part time members appointed in NITI Aayog.
6.  The Governing Council of NITI Aayog has lieutenant governors of union territories and state chief ministers.
7. The CEO of Niti Aayog is appointed by the Prime Minister.Secretaries are known as CEO.
8. The number of full-time members in NITI Aayog could be lesser than the numbers that the planning commissions had.
9. Under the Niti Aayog organization Its structure new posts were created CEO Vice Chairperson. CEO has the rank of a secretary.Four cabinet Members would serve as ex officio members.niti aayog has to part time members and five full-time members.
10. In Niti Aayog, the final policy would bear fruit after due consultations are held with state governments in the policy formulations stage.
11. Nidhi Ayog is also an executive body as it is not mentioned in the Constitution of India and it was not established by an Act of Parliament.However, if needed, it can be converted into a state into a statutory body by passing a law in parliament and example is UIDAI. 

1. priorities between agriculture and industry
2. agriculture
3. Industry

A)PRIORITIES BETWEEN AGRICULTURE AND INDUSTRY:

AGRICULTURE:

• The Indian economy holds the sixth position in the world's top economies. The majority of the country's population depends on agriculture for their livelihood. The agriculture sector contributes roughly 14% of the country's total GDP. 
• The cultural sector plays a crucial role in the Indian economy. There is a constant drop in this sector, while the services sector is comparatively improving.
• In Indian economy is an agro economy. The difficulty which such an agro economy is that the agriculture sector is highly dependent on the cycle of production, distribution and consumption. Another problem with Agro economy is productivity.
• Importance of agriculture in the economy.
• Agriculture provides employment opportunities to rural agriculture and non agricultural laborers.
• It plays a significant role in international trade and import export activities.

#ROLE OF AGRICULTURE:

1.Share in national income.

From the very beginning, agriculture is contributing a major posture to our national income in 1950-51. agricultural and allied.Activities contributed about 59% of the total national income.

2.Agriculture play Vital role in generating employment.

In India, over 2/3 of our working population are engaged directly on agriculture and also similarly depends for their livelihood. 

3.Supply of raw material to agro based industries

Agriculture in India has been the major source of supply of raw materials to various important industries of our country.cotton and Jute textiles, sugar vanaspati.Edible oil plantation industries. 

and Agro based Cottage Industries are also regularly collecting their raw material directly from agriculture. 

4.Source of food security to the expanding population.

Agriculture is the only major source of food supply as it is providing regular supply of food.To such a huge size of populations of our country . It has been Estimated that about 60% of household consumption is met by agricultural product. 

5.Market for industrial products.

Since more than 2/3 of the population of developing countries like India lives in rural areas, increases rural purchases.Power is a valuable stimulus to industrial development.

6.Importance in international trade.

For a number of years, the three agriculture based export of India, cotton, jute and tea accounted for more than 50% of export earning of the country. 

INDUSTRY:

• India had six major industries. There were iron and steel industry, textile industry, jute, sugar, cement and paper industries.
• Four new industries joined this list, namely petrochemical, automobile, information technology, and bank and insurance.
• These industries are important for India's economy. Therefore, understanding the growth of these industries can offer a good insight into the relationship between their growth and government policies.
• Iron and steel industry is one of the most important industries considering total investments.According to the World Steel Association, India is one of the world's top ten producers of steel. Despite the importance of this industry, we import large quantities of steel every year.
• IT industry is spreading fast in India.With many US and EU firms working with contract agencies in India and China for IT software and services, outsourcing has acquired an international dimension.
•  According to 7th schedule to the Constitution of India, the Centre alone can legislate insurance while there are many private companies who solicit insurance including foreign direct investment of up to 26%, the largest life insurance company in India.is government owned .

ROLE OF INDUSTRY:

1. Increase in national income-Industrial development contributes significantly in India's.GDP.The contribution of the industrial sector has been increasing continuously. 
2. Employment generation.-Industrialization That means the establishing of new enterprises.Thus, it creates employment opportunities, directly or indirectly.In our country, the surplus of Labor, of agricultural sector, government, employment opportunities in the industrial sector
3. Increase in capital formation.-Industrial development will increase per capita Income hence it will raise the level of saving and capital formation in the economy.
4. Improvement of standard of living.-Industrialization provides better source of income.People grow rich after meeting their basic requirements like food and Stratus.They spend the surplus income on different types of luxurious items.Thus their standard of living rises 
5. Self Sufficiency.-Due to less industrial development, have to depend on other nations to meet as demands.But industrial development make the country self-sufficient in the production of essential goods and services.Thus it saves valuable foreign exchange. 
6. Balance regional development.-Industrialization helps to achieve balance regional.Development the Government of India established several basic and key industries in the backward region.Such Industrialization process helps to remove regional imbalance. 
7. Development of human capital.-Industrial development creates an environment for proper human capital development, which is because industrial developed invites the establishment of training, institution management school,Higher study center etc.

C)CHOICES OF TECHNOLOGY:

1. LABOUR INTENSIVE TECHNIQUE
2. CAPITAL INTENSIVE TECHNIQUE

#Labour intensive technology and capital intensive technique:

• One of the problems facing the planets is how to best utilize the available resources in order to accelerate the growth rate of the economy.
• The number of alternative techniques.Open to the planners between light and.Heavy industry.And between labor intensive and capital incentive techniques.And between agriculture and industry.
• But the ultimate choice is one of selecting between labor intensive and capital incentive methods, whether it is in agriculture and industry or in light and Heavy Industries.
• In making a choice between labour and capital incentive techniques in India, it is necessary to consider a variety of factors. Their comparative cost of production, effect on employment, income saving and investment, use of domestic resources, effect on.Domestic and foreign demand, their ability to ease Inflationary pressure and balance of payments position.

*Arguments for labor intensive technology:

1. It is only by using labor intensive techniques that increasing employment opportunities can be provided to the ideal of underemployed labor force.
2. adoption of labour intensive technique would result in the utilization of vast and varied local resources for the production of national wealth
3. labor intensive techniques are import light they require simple tools and implements which need not to be imported from abroad and thus there is considerable saving in foreign exchange
4. Labor intensive technique  Quickly increase the supply of consumable goods and thus obviate the danger of inflation.
5. Where there is.An acute shortage of capital and entrepreneurship resources. The use of labour intensive technique would be more appropriate for releasing these scarce resources to be used in more important areas.
6. Labor intensive techniques would.increase employment and spread the total income generated more widely over the population
7. Labor intensive methods being separated out into villages and small towns. Enjoy all the advantages of decentralization and avoid the evils of the factory system.
8. Labour intensive techniques avoid the emergence of monopolies and concentration of economic power in the hands of a few.
9. The use of labour intensive technique tend to increase production.

*Arguments for capital intensive techniques:

1. The adoption of capital intensive techniques tends to accelerate the rate of capital formation.
2. Growth rate is much faster under capital intensive techniques. More employment will be offered to the labor force in the long run.
3. Capital intensive process leads to the economies of large scale production and the productivity rises more rapidly in the relation to cost.
4. use of highly capital intensive techniques leads to the production of quality products and lowering of cost low cost means low prices and provide the basis for a rapid rise in living standard later on
5. capital intensive techniques have far reaching effect on the process of economic growth with abundant production of Goods.
6. Capital intensive techniques are essential for providing economic and social overheads.
7. Where the growth rate of population is very high, the capital intensive techniques are required to increase the output per head. 

*What are labor intensive and capital intensive techniques?Which of the two is better for developing country and why? 

• Labour intensive technique is that which uses comparatively larger amount of Labor and small of capital. It is the technique by which more of Labor and less of capital is required for the process of production.
• Capital intensive technique is refers to that technique in which large amount of capital is used comparatively. In such a technique the amount of capital used per unit of output is more than what it is in the case of labour intensive technique. 
• For underdeveloped and developing Economies are labor intensive. Industry structure can be better option than a capital intensive one for quick economic development.Four countries which are not wealthy and generate low levels of income, labor intensive industry can bring economic growth and prosperity. In most cases, these low income countries suffer from scarcity of capital but have an abundant labour force, such as some African countries. 
• Supply of perfectly skilled labour to any industry can boost the industry growth rate in this way underdeveloped countries can improve their industrial economy without heavy capital investment
• Exportation of the products manufactured by labor intensive industries can strengthen the export base of any developing country.
• Most developing economies are labor intensive as its cost less as compared to the Cost of machines.It enables such economies to undertake production which drives their growth. Even developed economies Sometimes believe in outsourcing of developing economies to benefit from lower production cost.
• Industries such as the carpet weaving industry are renowned for the product being unique and the heavy being intricate.
• Example of labour intensive technique : Customized products, services, research and development, real estate development, agriculture. 
• The judicious combination of both the methods can be affected by adopting capital intensive techniques in the case of heavy and basic industries, and labor intensive techniques may be adopted in the case of consumer goods industries.
• India would have to go in for intermediate technology and they proceed gradually towards introducing more and more sophisticated technology as the country learns high level skills, taking steps to introduce sophisticated technology.
• The Indian Planning Commission did not give much thought to the problem of choice of techniques in the first plan. The second plan is stressed or increasing employment opportunities by adopting labor intensive schemes and at the same time capital intensive techniques in heavy and basic industries. The same procedure is followed in later plans.