INTERNATIONAL ECONOMIC ASSOCIATION CONFERENCE VOLUMES. Numbers 1-50 NUMBER 28 Economic Development in South Asia Economic Development in South Asia Proceedings of a Conference held by the International Economic Association at Kandy, Ceylon EDITED BY E. A. G. ROBINSON AND MICHAEL KIDRON M S TOCKTON PRESS Y © International Economic Association 1970 Softcover reprint of the hardcover 1st edition 1970 978-0-333-11540-4 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright Act 1956 (as amended). Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First published 1970 This 50-volume set reprinted 1986 jointly by THE MACMILLAN PRESS LT D Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world and YUSHODO CO. LT D 29 Saneicho, Shinjuku-ku Tokyo 160 Japan. Tel: 03(357)1411 Published in the United States and Canada by STOCKTON PRESS 15 East 26th Street, New York, N.Y. 10010 ISBN 978-1-349-00966-4 ISBN 978-1-349-00964-0 (eBook) DOI 10.1007/978-1-349-00964-0 Contents Acknowledgements ix List of Participants Xl Introduction E. A. G. Robinson xiii PART ONE: CONSTRAINTS ON DEVELOPMENT 1 Constraints in Economic Development: The Problem of 3 Population Growth in South Asia Sultan S. Hashmi 2 Population and Foodgrain Output in India: A Note on 21 Disparate Growth Rates Ashok Mitra Discussion 29 PART TWO: PAST TRENDS OF GROWTH 3 The Rate of Growth of the Indian Economy Ashok Rudra 35 4 Growth of National and Per Capita Income in Pakistan 54 Taufiq M. Khan Discussion 65 PART THREE: PROBLEMS OF INTERNAL DEVELOPMENT OF INDIA AND PAKISTAN 5 The Role of the Public Sector in the Economic Development (9 of Pakistan M. Akhlaqur Rahman 6 The Public Sector in India R. K. Hazari and A. N. Oza 90 Discussion 98 7 Some Questions Concerning Growth, Transformation and 102 Planning of Agriculture in the Developing Countries K. N. Raj 8 East-West Contrast in Pakistan's Agricultural Development 127 Swadesh R. Bose Discussion 147 9 Patterns of Industrialisation in Pakistan Sayeedul Huq 153 10 Long-Term Constraints on India's Industrial Growth, 170 1951-1968 Amiya K. Bagchi Discussion 193 VI Contents 11 Some Problems of Choice of Techniq ues in a Mixed Economy: 199 The Case of Pakistan Azizur Rahman Khan 12 Choice of Techniques T. N. Srinivasan 213 Discussion 222 13 On Human Resources Development Gautam Mathur 225 14 Planning Investment in Education: Some Problems and 245 Strategies Muhammad Shamsul Huq Discussion 272 15 Some Issues Concerning Investment and Saving in the Indian 278 Economy K. N. Raj 16 Financing Economic Development in Pakistan 299 A. H. M. Nuruddin Chowdhury Discussion 318 17 Inflationary Process and its Control in Less Developed 323 Countries Ziauddin Ahmad 18 On Inflation and its Control V. V. Bhatt 346 Discussion 363 19 Strategies of Economic Development: Feasibility Constraints 369 and Planning Amartya Sen 20 Maximal Growth with Wage-Dependent Production Function 379 Md. Anisur Rahman Discussion 386 PART FOUR: PROBLEMS OF DEVELOPING CEYLON 21 Recent Approaches to Planning in Ceylon Lal Jayawardena 391 22 Choice of Techniques in Ceylon B. Hewavitharana 431 Discussion 449 PART FIVE: PROBLEMS OF TRADE AND EXTERNAL RELATIONS 23 Trade Policies and Economic Development 455 Manmohan Singh 24 The Manufactured Exports of Pakistan: Factor Intensity and 476 Related Economic Characteristics Nurul Islam Discussion 499 25 The Foreign Capital Requirements and External 504 In debtedness of a Developing Country: A Case Study of Pakistan Syed Nmvab Haider Naqvi Contents vii Discussion 521 26 Trade, Aid and Inter-Regional Development Wahidul Haque 525 Discussion 536 27 International and Regional Development 537 Jagdish N. Bhagwati 28 The International Development of India and Pakistan 549 Benjamin I. Cohen Discussion 573 Index 579 Acknowledgements The Conference which this volume records owes more than can be said to the original inspiration of K. N. Raj and Nurul Islam, who had found themselves working together in the World Bank in Washington and had discovered the remarkable identity of the economic problems facing India and Pakistan and the potential value of an exchange of ideas and experi ences between economists of the two countries. Almost at the same time the same thoughts impressed themselves on Amartya Sen and Wahidul Haque when they met in Canada. Both these groups approached Austin Robinson, known to all of them, with the suggestion that a joint con ference should be held to carry into effect their ideas. Held in the neutral and attractive setting of the Hotel Suisse in Kandy in Ceylon, the Con ference greatly justified their conceptions of it. Its holding was made possible by the grants given to the International Economic Association and UNESCO. The encouragement given to the Association in their enterprise went, however, far beyond financial support. The Association would wish to thank David Bell and the representatives of the Ford Foundation both in India and Pakistan for their help. To the Government of Ceylon and some of its senior officials who took an active part in the Conference, we would wish to express our sincere gratitude for helping us to solve many local problems and to create an atmosphere favourable to relaxed academic discussion. To Professor Gunasekera and Mr Samarasinghe of the University of Ceylon at Pera deniya we were infinitely indebted for assistance in things both small and great that are necessary to the running of a conference. Finally we think that all participants in the Conference would feel that on this occasion it is proper to break the tradition of anonymity and record our gratitude to Mary Crook, Administrative Secretary of the International Economic Association. The running for the first time of a conference in a country so remote from headquarters, beset by innumerable problems of the currency restrictions of three countries, of the multipli cation and conveyance of papers, and the individual transport problems of reaching Kandy, presented a challenge which only she could have over come. To those who helped her, Mrs Elizabeth Krishna in Delhi, Taufiq Khan in Karachi and Mrs Mathur at the Conference itself, we are also greatly indebted, and also to those who helped Michael Kidron with the recording of our discussions. A2 List of Participants Dr J. J. Anjaria, Reserve Bank of India, Bombay Professor A. K. Bagchi, Department of Economics, Presidency College, Calcutta Mr J. Baneth, LB.R.D., New Delhi Professor J. Bhagwati, Department of Economics, M.I.T., Cambridge, Mass. Dr V. V. Bhatt, Reserve Bank of India, Bombay Dr S. R. Bose, P.I.D.E., Karachi Professor Benjamin I. Cohen, Department of Economics, Economic Growth Center, Yale University, U.S.A. Dr G. Corea, Permanent Secretary, Ministry of Planning and Economic Affairs, Colombo Professor H. A. de S. Gunasekera, Department of Economics, University of Ceylon Professor Wahidul Haque, Department of Economics, University of Islamabad, Rawalpindi, and Department of Political Economy, University of Toronto Dr Sultan S. Hashmi, P.LD.E., Karachi Dr B. Hewavitharana, Department of Economics, University of Ceylon Dr Mazharul Huq, State Bank of Pakistan, Dacca Professor Shamsul Huq, Vice-Chancellor, Rajshahi University, East Pakistan Dr Sayeedul Huq, Research Department, United Bank Ltd, Karachi Professor A. F. A. Hussein, Planning Commission, Islamabad Professor Nurul Islam, Director, P.I.D.E., Karachi Dr L. Jayawardena, Economic Adviser, Ministry of Planning and Economic Affairs, Colombo Dr Azizur Rahman Khan, P.I.D.E., Karachi Professor Mark Leiserson, Economic Growth Center, Yale University Professor Gautam Mathur, Department of Economics, Osmania University, Hyderabad Dr Ashok Mitra, Agricultural Prices Commission, Government of India, New Delhi Dr Syed Nawab Heider Naqvi, P.I.D.E., Karachi Dr. Nuruddin Chowdhury, P.I.D.E., Karachi Mr Pitambar Pant, Member, Planning Commission, Government of India, New Delhi Dr Akhlaqur Rahman, Chief Economic Adviser, United Bank Ltd, Karachi Professor Anisur Rahman, Department of Economics, University of Islamabad, Rawalpindi Professor K. N. Raj, Delhi School of Economics, University of Delhi Mr V. K. Ramaswami, Ministry of Finance, New Delhi Mr Peter Richards, Development Centre, O.E.C.D., Paris Professor Austin Robinson, Cambridge University Professor A. Rudra, Visva-Bharati University, Santiniketan, Bengal Mr S. W. R. de A. Samarasinghe, Department of Economics, University of Ceylon Professor A. K. Sen, Delhi School of Economics, Delhi Dr T. N. Srinivasan, Indian Statistical Institute, Delhi Dr G. Uswatte-Aratchi, Ministry of Planning and Economic Affairs, Colombo Dr Ziauddin Ahmad, Director of Research, State Bank of Pakistan, Karachi Secretariat and Editorial Stall Miss Mary Crook Mr T. Nulty Mr Michael Kidron Mrs L. Nulty Mrs Elizabeth Krishna Mrs D. Jain Mrs Mathur Programme Committee Austin Robinson (Chairman) K. N. Raj, Indian Economic Association J. J. Anjaria, Indian Economic Association Nurul Islam, Pakistan Economic Association Mazharul Huq, Pakistan Economic Association H. A. de S. Gunasekera, Ceylon