2.24. Table 4 indicates the long-term perspective of the availability of major minerals based on estimated depletion rates in 1988-89. For many of the strategically important minerals, such as, chromite, kyanite, barytes and manganese, the nation would be depleting the known reserves before the year 2000 even if exports are maintained only at the current levels and production is increased to meet the growing domestic demand. This is a serious matter particularly as substantial deposits of these minerals are under private lease-hold. As for the critical non-ferrous metals viz, copper and zinc, of which India is a net importer, minimum exploitation to ensure self-sufficiency in the short run, will deplete the known reserves within fifteen years or so. This has obvious implications both for import planning and for exploitation. Reserves of some of the important minerals like iron ore (both hematite and magnetite) and bauxite seem to be sufficient for meeting growing domestic needs and to provide for exports. Reserves of limestone are abundant but complete inventory in terms of grades and quality has not yet been made.
Table 4.Balance Life of Known Reserves at 1988-89 Consumption Levels
minerals balance life at 1988-89
consumption levels in years
(0) (1)
1. coking coal 44
2. non-coking coal
(a) indigenous 168
(b) plus exports 159
3. iron ore-hematite
(a) indigenous 165
(b) plus exports 62
4. iron ore-magnetite 84
5. manganese ore
(a) indigenous 26
(b) plus exports 12
6. chromite
(a) indigenous 47
(b) plus exports 13
13
(0) (1)
7. bauxite
(a) indigenous 66
(b) plus exports 45
8. zinc
(a) indigenous -
(b) plus imports 11
9. copper
(a) indigenous 17
(b) plus imports 36
10. lead
(a) indigenous 29
(b) plus imports 46
11. rock phosphate
(a) indigenous -
(b) plus imports 12
12. limestone 475
Critical Industrial Intermediates 2.25. Studies on steel demand indicate, that domestic requirements can be met and export of some surpluses maintained till 1983-84 on the basis of fresh capacities expected to be created by investments in stream or possible expansion in the existing plants. Fresh investment decisions may, however, need to be taken for ensuring adequate supplies of finished steel, particularly shaped products, in the earlier part of the Seventh Plan period. The target of 4 lakh tones of aluminium in the Draft Plan is now expected to be reached by the end of the Sixth Plan period. Fresh capacities will need to be created before then. Aluminium demand is expected to rise by more than 50 per cent in the Seventh Plan period and decisions on setting up of capacity for mining of bauxite and erection of smelter facilities will be necessary.
Demographic Profile 2.26. The National Population Policy lays down a target for birth rate of 25 per thousand and a population growth rate of 1.4 per cent by the end of the Sixth Plan period. The policy envisages a series of fundamental measures including raising of the minimum age for marriage, female education, spread of population values and the small family norm, strengthening of research in reproductive biology and contraception, incentives for individuals, groups and communities
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and permitting State Legislatures to enact legislation for compulsory sterilization. The targets laid down in the National Population Policy, correspond to those laid down in the Draft Fifth Plan for achievement by the end of the Sixth Plan and are expected to be reached. For the period 1986-91, the population growth rate is estimated at 1.1 per cent. The population is estimated at 725.4 million by 1988-1989 and at 744.8 million by 1991. The rural population is estimated at
545.1 million by 1988-89 and the urban population at 180.3 million.
Structure of Output 2.27. Gross Domestic Product at 1960-61 prices increased at an annual compound growth rate of 3.40 per cent in the period 1961-62 to 1973-74 as shown in Annexure 4. The fastest growing sector was Electricity, gas and water supply (9.90 per cent). The rate of growth of the Registered Manufacturing sector was faster than that of unregistered Manufacturing sector. Broadly speaking, with the growth in the agricultural sector at around 2 per cent per annum, the manufacturing, mining and quarrying and tertiary sectors grew at a rate of around 4 per cent per annum and the national economy at over 3 per cent per annum.
2.28. The structure of output in the perspective period can now be summarised. The constraints of the international economy, the desired patterns of consumption expenditures and the natural resources (including the non-renewable resources) determine the leading sectors of the economy. In addition, the export opportunities (outlined subsequently) and the required levels of investment and public consumption determine the details of the desired structure of output. The growth of gross output in the agricultural sector is estimated at 3.94 per cent in the Fifth Plan period and higher than 4 per cent in the Sixth and Seventh Plan periods (Table 5: All estimates at 1974-75 prices). The mining sector's gross output is targeted to expand at 12.58 per cent per annum and electricity at 10.12 per cent in the Fifth Plan period. The manufacturing sector is expected to sustain a growth rate of 6.92 per cent compound per annum in the Fifth Plan period and 7.23 per cent in the Sixth and Seventh Plan period. This growth profile is consistent with a growth target of 4.37, per cent for the Fifth Plan period (5.2 per cent for the period 1976-77 to 1978-79), 5.65 per cent for the Sixth Plan period and 6 per cent for the Seventh Plan period.
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2.29. The composition of Gross Domestic Product at factor cost undergoes a change in the perspective period. The agricultural sector shows a higher growth rate : but its share goes down from 50.78 per cent in 1973-74 to 48.15 per cent in 1978-79, 44.40 per cent in 1983-84 and 40.25 per cent in 1988-89. (Table 6). The share of the mining and manufacturing sectors goes up from 15.78 per cent in 1973- 74 to 17.49 per cent in 1978-79, 19.01 per cent in 1983-84 and 20.25 per cent in 1988-89.
Table 6. Sectoral Composition of Gross Domestic Product : 1973-
74, 1978-79, 1983-84 and 1988-89
(per cent)
sectors 1973-74 1978-79 1983-84 1988-89
(0) (1) (2) (3) (4)
1. agriculture 50.78 48.15 44.40 40.25
2. mining and manufacturing 15.78 17.49 19.01 20.25
(a) mining 0.99 1.37 1.58 1.61
(b) manufacturing 14.79 16.11 17.43 18.64
(i) food products 2.13 2.07 2.03 2.05
(ii) textiles 3.50 3.31 3.38 3.50
(iii)wood and paper products 0.58 0.59 0.66 0.75
(iv) leather and rubber
products 0.16 0.15 0.16 0.18
(v) chemical products 1.84 2.44 2.87 3.15
(vi) coal and petroleum
products 0.23 0.27 0.28 0.30
(vii) non-metallic mineral
products 1.58 1.82 2.04 2.18
(viii) basic metals 1.09 1.65 1.68 1.84
(ix) metal products 1.06 1.09 1.22 1.20
(x) non-electrical engine-
ering products 0.61 0.73 0.82 0.93
(xi) electrical engineering
products 0.60 0.67 0.79 0.92
(xii) transport equipment 0.96 0.90 1.06 1.16
(xiii)instruments 0.03 0.03 0.04 0.04
(xiv) miscellaneous
industries 0.38 0.38 0.40 0.43
3. electricity 0.79 0.94 1.13 1.24
4. construction 4.06 4.21 4.77 5.02
5. transport 3.43 3.48 3.43 3.49
6. services 25.16 25.73 27.26 29.75
7. total 100.00 100.00 100.00 100.00
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2.30. The average propensities to save and invest show constancy if the period from 1961-62 to 1973-74 as a whole is considered. The expansion of public investment in the Annual Plans of 1975-76 and 1976-77 led to a step-up in gross capital formation. At 1974-75 prices, the percentage of Gross Investment to GNP is estimated at 18.9 per cent in 1988-89. Growth projections for the Sixth Plan period and beyond are based on careful assessment of past trends and future possibilities. However, they should not be interpreted as the upper limit of what the economy can achieve. It is eminently desirable that the economy should achieve higher rates of growth than postulated here. Improvement on the growth profile is feasible only if the investment level in the year 1988-89 is higher than what is indicated here. To be consistent with the objectives of removal of poverty, additional investment has to be sustained by greater efforts at resource mobilisation from the more affluent sections of the society,
Exports and Imports 2.31. The growth of exports has been 7 per cent per annum in the period 1960-61 to 1973-74. Manufactured exports increased by 12.8 per cent per annum in the same period and the share of manufactured items increased from 47.5 per cent to 59.2 per cent. This increase was mainly on account of rise in exports of new manufactures and non- traditional goods. This period also witnessed market-wise shift to EEC, OPEC and Socialist countries. However, India's share in total world exports declined as value of world trade grew at the rate of 12.2 per cent per annum as against value of India's trade at 8 per cent.
2.32. Since 1960-61 import substitution has been significant in the area of industrial machinery, paper, chemicals, iron and steel and non-ferrous metals. The share of imported machinery and equipment in the country's gross (fixed) capital formation declined sharply from 43.4 per cent in 1960-61 to 25-3 per cent in 1965-66 and 9.6 per cent 1973-74, reflecting increased self-reliance. During the Fourth Plan, the increase in the value of total imports was due to substantial increase in unit values of commodities like wheat, fertilisers, non- ferrous metals and POL products.
2.33. The perspective for India's balance of payment is to pursue policies for the achievement of the objective of self-reliance. In the areas of food, fertilisers and POL, imports are sought to be reduced by pursuing a policy of rapid import substitution through planned investments. The momentum in the growth of exports will have to be sustained by exploiting both supply and demand elasticities for export of products of manufacturing sector such as steel, industrial machinery, metal based products, ready-made garments, leather manufactures, marine products, electronics and transport equipment. In exports of natural resources such as iron ore, mica and bauxite, the emphasis would have to be on product-mix-with higher value added component, implying expansion of capacity
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for pelletisation, production of alumina, fabrication of mica, etc.
2.34. It is hoped that markets where India enjoys distinct locational advantage would be tapped. These markets should also open up the possibilities of export of services in the areas of construction, consultancy and joint ventures.
2.35. As regards imports, it should be possible to reduce the dependence on the rest of the world for import of critical wage goods in the Sixth Plan period. As regards machinery, equipment and other industrial imports, the strategy envisaged in perspective calls for careful implementation of a policy of selective import substitution. The constraints of non-renewable resources will have to be kept in mind.
The Employment Perspective and Standards of Living 2.36. The problem of employment is a matter of vital concern to the planners and policy makers. Given the structural characteristics of the economy, quantification of the relevant magnitudes presents some serious conceptual and statistical problems. The Expert Committee on Unemployment Estimates had suggested that a multidimensional approach be adopted in this regard. The 27th Round of National Sample Survey was devoted to collecting data based on the recommendations of the Committee. So far, results are available for the first two sub-rounds. Using the concept of Current Activity Status and defining unemployment rates through the disposition of labour time, it is possible to arrive at certain qualitative considerations regarding the problem in the rural areas. The data clearly indicates an urgent need for substantial efforts at generation of employment in the rural areas. However, the real problem is seen in a better perspective if it is realised that a part of the urban unemployment problem also arises from a spill over from the rural areas. In addition, regional unevenness in the character of the problem comes out in sharp focus.
2.37. Growth in employment in the organised sector is estimated at around 3 per cent per annum in the Fourth Plan period. In spite of the conceptual difficulties involved, inter-censal comparisons. as well as the results of the different rounds of the National Sample Survey suggest that magnitude of employment in the household manufacturing sector including cottage industries has not increased to the required size. In a period of low agricultural growth (1961-62 to 197374), the rates of growth of gross value added at 1960-61 prices, of important household manufacturing industries were low, e.g. food, drink and tobacco (1.83 per cent compound per annum), textile tailoring, leather footwear (2.09 per cent), leather and leather products (1.62 per cent). However, these are compensated to an extent by higher rates of growth (between 3 to 6 per cent) in the chemical and engineering sectors.
2.38. For the purpose of evolving an appropriate policy, it is necessary to identify factors influencing the levels of rural employment on a regional basis.
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Studies have been carried out by the Planning Commission using the concept of an NSS region. The relationship of employment per rupee of output with factors such as output per hectare, use of fertilizer per hectare, tractorisation, irrigation, levels of investment and level of inequality of operational land holdings, has been investigated. Employment per rupee of output and per hectare of land depends on variables relating to irrigation such as the number of pump sets installed per hectare of land. Such employment rates are seen to be associated with a higher percentage of land operated in farms equal to or less than 5 acres (2 hectares). It was decided to further investigate this relationship separately for the developed commercialised agricultural regions and the rest. The results were broadly similar to those obtained for the country as a whole. However, fertilizer applications per hectare, a surrogate for the extension of the new technology in agriculture, were also shown to be positively related with employment variables in the commercial regions.
2.39. From the point of view of devising an appropriate strategy and employment policy, there are three inter-related aspects, which need to be borne in mind. The first emphasises the need for implementing a programme using the strategic foci employed in the Plan such as irrigation, agricultural extension involving the use of high yielding varieties etc; the second relates to the fact that aspects of rural employment generation should be inter-woven with a local development strategy; and the third, the most important aspect relates to the creation of a secure rural tenantry and a productive small farmer base by means of tenancy reform.
2.40. The methodology outlined above has several operational implications Firstly, it means ensuring the availability of critical inputs and their effective utilisation; the Plan has taken care of this aspect in its production and investment planning side. Secondly, employment planning through agriculture has to be area specific in character and, therefore, requires a multi-level approach. Given the soil and agronomic conditions in each area, the availability of irrigation facilities, both through surface water as well as ground water possibilities, have to be estimated in detail. In the light of past experience, the features of crop specialisation in the area and the demand profile indicated in the Plan, cropping patterns for each sub-region will have to be worked out. Realistic assessments have to be made of the possibilities of the extension work with respect to the new varieties, both for areas under irrigated conditions and under assured rainfall conditions and to the extent possible, for dry areas. The production potential for each region has, therefore, to be carefully estimated and the requisite organisational and input support ensured. Care has to be taken to ensure that inconsistencies do not develop. Admittedly, these are difficult tasks. No serious and- worthwhile employment planning can be done without a reasonable assurance that these tasks will be performed.
2.41. The importance of area planning is also highlighted by studies which have shown that certain resource inelasticities which are binding at the national