49. For the major sectors of agriculture, mining and factory establishments the estimates of net output are based largely on the detailed targets of production set out Carrier. But in the case of other sectors such is commerce, professions and other services which are largely outside the purview of the plan, only an indirect estimate is possible. Nonetheless, it would appear that national income will increase from Rs. 10,800 crores in 1955-56 to about Rs. 13.480 crores in 1960-61 (at constant prices) i.e.by about 25 percent. This will mean an increase of about 18 per cent in per capita income (from Rs. 281 in 1955-56 to Rs. 331 in 1960-61) as against an increase of 11 per cent. over the first plan period (from Rs. 2.53 to Rs. 281). It ,will be seen that despite the substantial increase in the net output of raining and factory establishments that is envisaged, the structure of the economy will change only marginally over the plan period. Thus the share of agriculture and allied pursuits in total national income will decline from 48 per cent in 1955-56 to 46 per cent in 1960-61, and that of mining and factory establishments will increase correspondingly from 9 to 11 per cent. It is this fact which underlines the need for a continuing emphasis on industrialisation during subsequent plan periods.
50. The average level of consumption in the economy will not increase is fast as national income in as much as a larger proportion of domestic output will have to be saved and invested. The programme of investment envisaged for the second plan period Rs. 6.200 crores requires, broadly speaking, a set-up in the rate of domestic saving from the present level of some 7 per cent of national income to about 10 per cent of national income in 1960-61. This is on the assumption that external resources of the order of Rs. 1100 crores will become available as postulated in the plan, for supplementing domestic savings. Total consumption expenditure in the country may, on this assumption, be expected to increase by some 21 per cent as against the increase in national income of 25 per cent The corresponding increase in total consumption over the first plan period amounts to some 16 per cent The following table indicates the broad position in regard to national income, investment, domestic savings and consumption expenditure at the end of the second plan period as compared to the position in 1950-51 and in 1955-56 :
National Income, Investment, Savings and Consumption
(Rs. crores at 1952-53 prices)
1950-51 1955-56 1900-61
1. National income 9,110 10,800 13,480
2. Net investment 4,48 790 1,440
3. Net inflow of foreign
resources (-)7 34 130
4. Net domestic savings (2-3) 455 756 1,310
5. Consumption Expenditure
(1-4) 8,655 10,044 12,170
6. Investment as percent of
national income (2 as % of
1) 4.94 7.31 10.68
7. Domestic savings as per
cent of national income
(4 as % of 1) 4.98 7.03 9.7
39
THE PLAN IN OUTLINE
51. It may be emphasised that if foreign resources of the order required are not forthcoming, it would be necessary to restrict the growth in consumption to a correspondingly greater extent. Indeed, the postulated increase in consumption itself rests on the assumption that national income would increase by 25 per cent in response to an investment programme of Rs. 6,200 crores and that the necessary rate of saving for achieving this order of investment will materialise. The problem of mobilizing resources as required is discussed in the next chapter. But it is noteworthy that the essence of economic development lies precisely in this that unless increases in consumption art held in check to the extent required for realising the rate of investment the expected increase in national income and standards of consumption cannot materialise. It is also cleat that an investment. of Rs. 6,200 crores will result in an increase of 25 per cent in national income only if a number of assumptions are satisfied- assumptions about coordination in planning, the avoidance of waste, the requisite effort at organisation and leadership for enlisting the support and cooperation of the people in taking to improved methods of production and for creating a climate favourable for development. The achievements of a plan cannot be read simply from a list of program- mes. They depend primarily on the energy and organisational ability brought to bear on the implementation of programmes and policy measures at all levels.
52. Problems relating to employment pattern and policies and the employment potential of the plan are discussed in Chapter V. Additional employment likely to be generated over the second plan period in rectors other than agriculture is estimated at 8 million. In this estimate only full-time employment has been taken into account. There are in the plan programmes of development such as irrigation and land reclamation which will reduce under employment to some extent and may also absorb new persons. In the present socioeconomic structure in the rural areas the distribution of a given quantum of work or income cannot be split up as between employment for the under employed and fulltime employment as such. With the increase in agricultural prediction envisaged in the plan and the substantial increase in employment opportunities outside agriculture, there will be a significant increase in incomes and a reduction in underemployment in the primary sector. The promotion and reorganisation of village and smallscale industries along the lines suggested in the plan will provide fuller employment to large numbers of persons engaged in these industries. Altogether, in aggregative terms, the plan envisages a sufficient increase in the demand for labour to match the increase in the labour force amounting to 10 million.
APPENDIX
PLAN OUTLAY BY STATES
(Rs. crores)
First Plan Second
Plan
1 2
Andhra 75.9 119.0
Assam 28.1 57.9
Bihar 104.4 194.2
Bombay 181.3 266.2
Madhya Pradesh 57.5 123.7
Madras 97.0 173.1
Orissa 85.2 100.0
Punjab 124.0 126.3
Uttar Pradesh 165.9 253.1
West Bengal 151.9 153.7
TOTAL `A' STATES 107.12 1567.2
Hyderabad 57.0 100.2
Madhya Bharat 36.1 67.3
Mysore 53.2 80.6
Pepsu 39.2 36.3
Rajasthan 62.8 97.4
Saurashtra 29.8 47.7
Travancore-Cochin 35.4 72.0
Jammu & Kashmir 13.2 33.9
TOTAL `B' STATES 326.7 535.4
Ajmer 3.6 7.9
Bhopal 9.3 14.3
Coorg 2.0 3.8
Delhi 10.5 17.0
Himachal Pradesh 7.5 14.7
Kutch 4.8 7.9
Manipur 2.2 6.2
Tripura 3.0 8.5
Vindhya Pradesh 9.3 24.9
TOTAL `C' STATES 52.2 105.2
Andaman & Nicobar Islands 1.5 5.9
North East Frontier Agency 4.4 9.5
Pondicherry 0.8 4.8
Total 6.7 20.2
Centre's share of expenditure on .. 12.2
D. V. C
National Extension Service and .. 0.7*
Community Projects
GRAND TOTAL 1456.8 2240.9
*This is in addition to Rs. 187 crores included in the Plan allotments for individual States. For national extension and community projects the Plan provides Rs. 200 crores, of which about Rs. 12 crores are shown at the Centre. Provisional allotments under this head were made to individual States when state Plans were formulated; these are to be reviewed when certain details of the programme have been determinded.