SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC.
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cent, the estimated income for 1965-66 on the basis of the two-
sector model is Rs. 188.9 billion against an estimate of
Rs. 190.0 billion given in the Third Five Year Plan on the
basis of detailed sector-wise calculations.
It may be concluded, therefore, that the two-sector model
can supply a fairly reliable method for estimating future in-
come. Values of the parameters used for the base period are
no doubt subject to errors of estimation; but this would be
true in the case of other methods also. The two sector model
sives realistic estimates presumably because it has reasonably
correct structural relations between relevant variables.
Values of output-investment ratios: Output-investment ra
tios 3; and 3, determine, together with the chosen values of 2,
and À, and the total amount of investment, the rate of increase
of income and have an important role in planning. These
two coefficients of net output-investment ratios were calculated
from technological and statistical information in respect of
hundreds of enterprises combined with appropriate weights.
The calculated values for manufacturing industries are given
in Table A 1.
Need of perspective planning: Steel: The need of looking
2 long way ahead was learnt in India through experience.
[ shall give one example. In 1949 when preparatory work had
just started for the First Five Year Plan, a decision was prac-
ically reached to increase the capacity for the production of
steel from a little less than one million ton per year to two mil-
ion tons per year in the course of five years. However, a care-
ful survey was made of the current demand as in 1949. It was
found that the maximum demand would be about 1.5 million
fon per year. With marginal expansion of existing steel plants,
t was possible to produce about a million ton per year within
the country. Owing to the wide prevalence of the views of
short-range economic theory, it was therefore decided that it
would be inadvisable to include a new million ton steel plant
in the First Five Year Plan of India.
15 Mahalanobis II - pag. y
