India - Current economic position and prospects

R E S T R I C T E D R e p o r t N o. AS-54a This document was prepared for internal use in the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CURRENT ECONOMIC POSITION AND PROSPECTS OF INDIA Report of Bank Mission to India August 1956 Department of Operations Asia and Middle East  Rate of Exchange of Indian Currency I Indian Rupee = U.S. $0.21 1 U.S. Dollar z Rs. 4.762  CONTT.HTS Page Paragraphs BASIC DATA i-ii CHARTS iii-ix CHAPTER I - IITRODUCTICON 1 Aims of the Report 1-3 Features of the Indian Economy h-10 Requirements of Development 11-15 The Country's Economic Potential: Natural Resources 16-17 The Human Factor 18-22 CRAPTER II - PROGRESS U1NDR THE FIRST FIVE-YEAR PILAN 9 Achievements in Output 23-27 Progress of Investment 28-32 Investment and Output 33-34 The Expansion of Demand 35-37 Financing of the First Plan 38-42 Money Supply and Prices 43-47 Overseas Trade and Pamients 4-55 DJealmesses of tile Plan 56-61 Summary and Conclusions 62-67 CHAPTER III - THE, SECOND FIVE-YEEAR PLAN 27 (A) The Plan in Outline Cbjectives 68-76 Balance of the Plan 77-78 Philosophy Underlying the Plan 79-80 The Political Background 81-83 Prob'Lems Posed by t'he Plan 84-85 (B) Availabilities of LaborEJ,l aterials and Equipnent 86-88 (C) Personnel and Organizational Limitations 89-96 (D) Finance for the Plan General 97-99 Surplus from Current Resources 100 Additional Taxation 101-108 Surpluses of Publi c Enterprises log-11O Public Zoans 111 Small Savings 112 Provideint Funds 113 External Resources 114 Deficit Financing 1119 Conclusion 120  Page Eli-, (E) External Finance Nature of the Problem 121 Imiports 122-124 Exports 125-134 Invisible Earnings *35 Total Current Balance 136 Capital Transactions 137-140 The Foreign Excchange Gap 1241 Use cf Sterling Balances 112-143 Official Aid 144-146 Borrowing Requirements 147-148 CHAPTER IT - TIE INiUSTRIAL SECTCR 61 New Emphasis on Industrialization 149 Heavy Industry and Mlining 150-155 Small-Scale and Village Industries 156-165 Extension of the Public Sector 166-171 Operation and Management of Public Enterprises 172-179 Opportunities for the Private Sector 180-186 Goverment Regulation of Business 187-191 Sources of Business Finance 192-194 General Prospects for Private Business 195 Private Foreign Investment 196-210 CHAPTER V - TRkNSPORT AND CC11,JUNICATIIONS 85 A Critical Problem 211-212 The Rail,wvays 213-223 Road Transport 224-233 Ports 234-237 Coastal Shipping 238-239 Communications 240 CHAPTER VI - AGRICULTURE 98 (A)