1136 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 2¢
be interpreted as the real rate of interest, on loans from outside
Southern Italy, that applied to the planning of the Southern Italian
economy as of that time, calculated on the assumption that the
production relations and planning objectives are adequately estimated
in the study.
MAHALANOBIS
To reply briefly, the fertilizer question has been studied by com-
petent foreign economists and it has been found that it would be a
good choice in India to build machinery for the manufacture of
fertilizers. My own position is simple, When a better solution is
available I shall adopt it. But I shall not wait to find the best so-
lution. In India, we can use 30 million tons of ammonium sulphate
every year, at a very low rate of dressing and without any fear of
decreasing return, We should start increasing the capacity to pro-
duce fertilizers, and not wait until an optimum solution has been
astablished.
However, at a higher level, I completely share your views on the
value of sophisticated analysis. It is my firm belief that as the
structure of an economy becomes mature and stable, sophisticated
analysis would become more and more capable of being used effecti-
vely. I can give one example; one of the dramatic successes of linear
programming was in oil refinery because organic chemistry has stable
structural relations. Sophisticated analysis would be increasingly
used in the advanced countries. Also, I should think that such
methods would be used more effectively in a planned economy like
U.S.S.R. because factors there are more under control. On the other
hand, sophisticated analysis, if it loses a sense of realism and is
primarily imitative, as is likely to happen in a country like India,
‘hen it is not only useless but a menace. .
I am not against sophisticated analysis in its proper setting. Even
at a low level of economic development, I am in favour of introducing
automatized production at the earliest opportunity and to the largest
"151 Mahalanobis II - pag. 24
