Examine the following statements and select the correct explanation:
Assertion (A): The Mahalanobis economic model placed major emphasis on the development of heavy industries and capital goods sectors.
Reason (R): This approach assumed that strengthening these sectors would enhance the economy’s long-term productive capability.
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Both A and R are true, and R correctly explains A.
Mahalanobis Model and Planning
- Assertion (A) is True: The Mahalanobis economic model, conceived by statistician P. C. Mahalanobis, formed the basis of India's Second Five-Year Plan (1956–1961). It indeed laid a major emphasis on heavy industries (like steel plants, power, and machinery) and the capital goods sector.
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Reason (R) is True and Explains (A): The core philosophy of this model was the belief that rapid growth in the production of capital goods (machines that make other machines) would lead to higher investment and output in the long run. By strengthening these fundamental sectors, the model aimed to enhance the economy’s long-term productive capability and achieve self-reliance, thereby justifying the focus stated in (A).
The Mahalanobis model, therefore, promoted a strategy of rapid industrialization through massive government investment in the heavy industrial base.