Abstract
This chapter discusses the strategy of Indian planning. The most frequently encountered description of the strategy of Indian planning is that it seeks to lay particular emphasis on “heavy” or “basic” or “producer goods” or “capital goods” or “machine building” industries. The reason for this emphasis most generally given is that it quickens the pace of capital formation. An industry may be considered “heavy” either because its product is not light or because it requires heavy investment per unit of output. In common economic usage, “producer goods” are distinguished from final goods in the sense that unlike the latter which are directly consumed or invested, the former are necessary for the production of final goods. In a closed economy, a relatively greater emphasis on investment goods as distinguished from consumer goods is synonymous with a higher ratio of saving and investment in total national income; and if the output of investment goods is directed toward the investment goods industries themselves, the ratio of savings and investment to income would also rise at a faster rate than would be otherwise possible.
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