Economics Watch

ICOR: INCREMENTAL CAPIAL OUTPUT RATIO Ø IT ESTABLISH RELATIONSHIP INCREASE ININVESTMENT & RESULTANT OF THE OUTPUT Ø SHOW HOW MUCH OUTPUT CAN BE INCREASED BY INCREASING THE INVESTMENT PER UNIT Ø IT IS INVERSLY PERPOTIONAL TO THE PRODUCTIVITY Ø ICOR=INVESTMENT/GROWTH RATE Ø PLAN INVESTMENT TARGET 28.41 Ø GROWTH RATE 7.93 Ø THERE FORE ICOR = 28.41/4.93=4.53 SECTOR WISE DISTRIBUTION OF GDP sector 1951-52 1990-91 2007-08 Agriculture 59.5% 34.9% 17.3% Industry 13.3% 24.5% 26.7% services 27.5% 40.6% 56% PLANS IN INDIA IN BERIEF NO.1 TIME DURATION MODEL GROWTHRATE OBJECTIVES TARGET ACTUAL 1 1951-56 HARROD DOMAR 2.1 3.6 DEVVELOPMENT OF AGRICULTRE 2 56-61 MAHALANOBIS 4.5 4.6 RAPID NDUSTRILIZATION 3 61-66 JOHN SANDY 5.6 2.7 SELF RELIANCE AND STABILTY 66-69 PLAN HOLIDAY 4 1969-1974 ALLEN MANNE& ASHOK RUDRA 5.7 3.3 SELF RELIANCE AND STABILTY 5 74-79 PC 4.4 4.8 EMPLOYMENT, REMOVE POVERTY 6 79-80 1981-85 PC 5.2 5.5 VILLAGE & COTTAGE INDUSTRY 7 1985-90 PC 5 6 LIBERALIZATION, MODERANISTION 1990-92 PLAN HOLIDAY 6.7 8 1992-97 JOHN MILLER LIBERLIZED 5.6 5.4 HUMAN RESOURCE DEVLOPMENT 9 1997-2002 PC 6.5 GROWTRH AND SOCIAL EQUITY h