SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC. 1106 
The use of simple models: In 1954-55, some simple models 
were used to work out the basic strategy of the Second Five 
Year Plan. The total investment was divided into two parts, 
one À; as the fraction used for investments for the production 
of capital goods, and the other À, as the fraction used for 
investments for the production of consumer goods (A; +X, =1). 
If the corresponding net output-investment ratios for the pro- 
duction of investment goods and for the production of consu- 
mer goods respectively are 3; and 3, then the total net output- 
investment ratio is $=2; 3;+2, 8... By using the following 
two sector model, and using numerical values for the total 
investment, and estimated values of 3; and j3_, suitable values 
of À; and À, were selected so as to enable the economy to grow 
at the target rate of five per cent per year or so. In order 
lo estimate the volume of employment, the capital investment 
required per worker, say 0, was also used. 
The growth of national income (Y) in the two sector model 
s given by the following formula: 
in which Y, is the national income in the base year, Y, the 
national income in the #-th year, and «, the rate of investment 
in the base year. 
On this basis, a Draft Plan-frame for the Second Plan was 
prepared in March 1955 (°). Values of the different parameters 
as used in the Draft Plan-frame, the Second Plan (1956-61) 
as actually realised, and the Third Plan (-061-66) as estim- 
ated, are shown in the Table given below 
(*) The methods used have been described in The approach of operational 
research to planning in India. « Sankhva ». vol. 16, PP. 3-130, 1955. 
Mahalanobis II 
pag.