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 production
 of investment goods and for the production of consumer
 goods respectively are 3; and 3, then the total net outputinvestment
 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 estimated,
 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

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