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Technological Change in the Indian Economy, 1950-1960
The introduction of modern production techniques, which require proportionately greater capital, was the main feature of the development of the Indian economy during the decade, 1950-60. However, this modern sector had not yet become large enough to affect the overall structure of the economy. Largescale manufacturing industry was the only sector of the economy to adopt advanced modern techniques to a marked extent so as to affect the capital structure of the sector as a whole. In other sectors, inspite of there being a rise in the incremental capital-output ratios, the overall capital-output structure remained largely unchanged. The introduction of modern production techniques, which require proportionately greater capital, was the main feature of the development of the Indian economy during: the decade, 1950-60.
THE Indian economy has now passed through a fairly long period of planning to deserve a critical analysis of its pattern of development over this period. It may be too early yet to try and measure or even guess the likely effects of the third fiveyear plan in terms of structural shifts but a careful study of the pattern of growth over the first ten years of planning may not be out of place.
Data on distribution of net domestic product by industrial sectors are available in some detail to give an idea of the behaviour of the growth pattern and also to indicate the varying performances of the different sectors. The study of factors leading to the particular growth pattern can be approached from several angles depending on the purpose in view. The present study aims at analysing the growth process over the past decade from the point of view of shifts in relationships between capital, labour and output. The changes in factor combination in relation to increase in output are very important not only for understanding the growth process but also for future planning. The data on output, capital stock and labour force at three points of time have been studied in combination to examine the extent to which planning in India has had its effect on the different factors in relation to increase in output. Thus, for a few selected sectors, the rate of growth of output is studied in conjunction with productivity of labour and capital intensity.
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