Abstract
A simplified procedure for solving a certain class of optimal control problems is introduced. To apply the method we formulated a two-sectoral econometric model for India. The sectors being agriculture and industry, the problem set is to determine the optimal allocation of investment between the two sectors over the period 1951-1971 and to examine whether the bias towards the industrial sector, during this period, was optimal or not. It has been found that, given the existing constraint on the total investment fund, the optimal path corresponds very closely to the historical path. This fact runs contrary to the hypothesis introduced by the development-economists that a bias in favour of agriculture could have been better.
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