Nehru-Mahalanobis model
The "Nehru-Mahalanobis model" refers to the economic development strategy adopted by India in
the initial decades after gaining independence. The model was largely influenced by the economic
ideas of Prime Minister Jawaharlal Nehru and the economist Prasanta Chandra Mahalanobis. Here's
a brief overview of their respective contributions to the model:
**Jawaharlal Nehru:**
1. **Socialism and Planning:**
- Nehru was a strong advocate of socialism and believed in the need for state-led economic
development. He emphasized the role of the government in planning and regulating the economy to
achieve social justice and reduce economic inequalities.
2. **Mixed Economy:**
- Nehru envisioned a mixed economy where both the public and private sectors would coexist. Key
industries and sectors deemed crucial for national development, such as heavy industries, would be
under state control, while the private sector would operate in other areas.
3. **Five-Year Plans:**
- Nehru initiated a series of Five-Year Plans, starting in 1951, to guide India's economic
development. These plans focused on the rapid development of infrastructure, heavy industries, and
the establishment of a strong industrial base.
**Prasanta Chandra Mahalanobis:**
1. **Mahalanobis Model:**
- Prasanta Chandra Mahalanobis, an Indian economist, played a crucial role in formulating the
Second Five-Year Plan (1956-1961). The plan, often referred to as the Mahalanobis Model,
emphasized the development of heavy industries and capital goods as a priority.
2. **Input-Output Model:**
- Mahalanobis applied input-output analysis to assess the interdependencies of different sectors of
the economy. This analysis helped in determining the sectors that needed priority in terms of
investment to spur overall economic growth.
3. **Industrialization:**
- The Mahalanobis Model aimed at achieving rapid industrialization by directing resources towards
the development of heavy industries such as steel, power, and machinery. The belief was that a
strong industrial base would provide the necessary foundation for overall economic growth.
While the Nehru-Mahalanobis model contributed to certain successes in industrialization and
infrastructure development, it also faced criticisms. Some argued that the focus on heavy industries
led to neglect of agriculture and small-scale industries, contributing to issues such as rural poverty.
Over time, India has undergone economic reforms, moving away from the centralized planning
model towards a more market-oriented approach. The Nehru-Mahalanobis model, however,
remains a significant chapter in India's economic history, shaping the country's early postindependence development strategy.