Full text: Study week on the econometric approach to development planning

SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC. 113 
extent possible in a country like India, and at the same time to gc 
on with traditional methods of production. The danger lies in sophi 
sticated analysis which are unsuited to the underdeveloped countries. 
But we have to take the risk. In India we are going on with inpnt/ 
output analysis and all that kind of work in the hope that gradually 
his approach will become useful. In applied science the important 
point is to know what factors are relevant and what are their prio- 
cities. Such understanding of relative priorities exists in the more 
advanced countries but is difficult to acquire in an underdeveloped 
environment. The methods have to be suited to the stage of deve- 
lopment. 
DORFMAN 
The conclusion of Professor MAHALANOBIS’ fertilizer example was 
‘hat the best solution for India would be to use the most indirect 
method of production, that is, to import the machinery for setting 
up a plant to manufacture machinery for fertilizer plants, This policy 
would require deferring the output of the different fertilizers for 
some ten or twelve years. If that be so, it would seem to me that 
the cost of importing food during this long interval to meet the annual 
population increase of some 5 million people should be counted as 
part of the cost of this roundabout method of production, because 
those food imports could be avoided by using some of the quicke: 
methods, for example, by importing fertilizers or importing fertilizer 
plants directly 
\IAHALANOBIS 
I apologize. I should have stated that for 15 years our people wil 
10t be starving. In the meantime we are importing foodgrains fo: 
current consumption as necessary; we are importing fertilizers; and 
we are importing machinery to set up new fertilizer factories. Bui 
15] Mahalanobis II - pag. 35
	        
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