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P.C. Mahalanobis

By Suresh D. Tendulkar

India may have struggled with his model for industrialisation. But as a pioneer statistician his efforts were more fruiitful.


For most people, Professor Prasanta Chandra Mahalanobis is best known as the architect of Independent India's industrialisation strategy that was embodied in the Second Five Year Plan (1956-61). This was elaborated in his celebrated paper "The Operational Research Approach to Planning in India" which was published in Sankhya, the Indian Journal of Statistics, in 1955. This became famous as the Mahalanobis model.

Three distinct elements of this strategy influenced the course of industrialisation in India: the autarchic approach of self-reliance, emphasis on basic and heavy machine-building industries to maximise long-term growth and finally, the dominant role of the public sector in basic and heavy industries. This was sought to be implemented through centralised industrial investment planning in the economy.

If Mahalanobis were alive today, how would he have evaluated the economy? Being primarily a scientist and not a blind-folded ideologue, he would have examined the empirical evidence dispassionately.

On the threshold of the next millennium, India carries the dubious distinction of hosting the largest number of the world's poor and illiterate mass of people. India continues to be at the lowest end in terms of GDR per capita and human development index. It boasts of creating the second largest stock of technically trained manpower which is not gainfully absorbed.

Where did we go wrong? In each of the three elements of his strategy, as I believe, he would have readily agreed. International experience is unmistakable that rapid growth is associated with competitive domestic markets and aggressive participation in international trade. We ruled them out through policy-induced entry restrictions and an autarchic trade policy. Two, domestic market, with initially low-level and later policy-induced slow growth in per capita real income, could not have absorbed projected capacities in basic and heavy machine- building industries. Three, political and bureaucratic interference in indiscriminately extended public-sector enterprises have converted them into white elephants draining the exchequer.

Consequently, he would have supported the economic reforms of 1991. In his original formulation, he stressed that a model was merely a scaffolding to be discarded as soon as the purpose was achieved. In the present context, the purpose not having been achieved, he would have looked for a different scaffolding, in the empirical evidence. Two, in his review of Gunnar Myrdal's Asian Drama in 1969 he agreed with Myrdal's contention that "India's promised social and economic revolution failed to materialise".

The area where Mahalanobis really made the difference was in statistics. He made pioneering contributions to the then newly evolving discipline and founded the Indian Statistical Institute in 1931.Thanks to his National Sample Surveys and Central Statistical Organisation, India boasts of a unique data base for tracking socio-economic changes and a sound statistical system.

Suresh D. Tendulkar is professor of economics, Delhi School of Economics.

 

 

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