Indian Economy
General Knowledge

Models of Economic Development

Nehru-Mahalanobis Model

» Nehru Mahalanobis model of development emerged as the driving force of the strategy of development adopted at the time of formulation of the Second Five Year Plan and has continued right up to the eighties.
» It aimed at enlargement of opportunities for the less privileged sections of the society.
» Growth with social justice was the goal of Nehru—Mahalanobis model since it intended to foster a self-generating path of development with an assurance to the common man that poverty, unemployment, disease and ignorance would be removed so that individuals could realise their potential with the extension of social and economic opportunities.
» In the Nehru-Mahalanobis model the State controlled the commanding heights of the economy through the public sector.

The Gandhian Model of Growth

» 'Gandhian Plan' was brought out by Acharya S.N. Agarwala in 1944 and was re-affirmed in 1948, formed the basis of Gandhian model of growth.
» The basic objective of this model is to raise the material as well as the cultural level of the Indian masses so as to provide a basic standard of life.
» It aims primarily at improving the economic conditions of the villages of India and hence, it lays the greatest emphasis on the scientific development of agriculture and rapid growth of cottage and village industries.
» The Gandhian model aims at the reform of agriculture as the most important sector in economic planning in India.
» The Gandhian model's primary aim is the attainment of maximum self-sufficiency in village communities. Hence, the plan emphasises the rehabili -tation, development and expansion of cottage industries side by side with agriculture. Spinning and weaving are given the first place.
» While Nehru wanted to give prime importance to heavy industries, the Gandhian model attempts to give primacy to agriculture supported by handicrafts and cottage industries.

LPG Model of Development

» The LPG Model of development was introduced in 1991 by the then Finance Minister Dr. Manmohan Singh.
» This model was intended to charter a new strategy with emphasis on liberalisation, privatisation and globlisation (LPG).
» LPG Model of development emphasises a bigger role for the private sector.
» It envisages a much larger quantum of foreign direct investment to supplement our growth process.
» It aims at a strategy of export led growth as against import substitution practised earlier.
» It also aims at reducing the role of the State significantly and thus abandons planning fundamentalism in favour of a more liberal and market driven pattern of development.

PURA Model of Development

» The Union Cabinet on 20th Jaunary, 2004 accorded in principle approval for the execution of PURA within the gross budgetary support for bridging the rural-urban divide and achieving balanced socio-economic development.
» Though, Dr. A.P.J Abdul Kalam, ever since he became the President of India has been advocating his Vision 2020, and, to eradicate poverty from India, he has been emphasiging the adoption of PURA (Providing Urban Amenities in Rural Areas); however, it was Mahatma Gandhi who underlined the exploitation of rural society by its urban counterpart.
» The objective of PURA is to propel economic development without population transfers.
» The PURA concept is the response to the need for creating social and economic infrastructure which can create a conducive climate for investment by the private sector to invest in rural areas.
» Although PURA draws its inspiration from the Gandhian model of development which emphsises rural development as a fundamental postulate, yet in-the prescription, it is neo—Gandhian is the sense, that it intends to bring rural regeneration with the avowed objective of taking modern technology and modern amenities to the rural areas.
» It does emphasize the enlargement of employment as the sole objective to make use of rural manpower in various development activities.
» The PURA model, however, attempts a reconciliation between employment and GDP growth objectives.
» The 11th Plan (2007—12) has provided Rs. 248 crores for implementing the PURA scheme in compact rural areas in public—private partnership (PPP) mode.