ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Alan S ManneSubscribe to Alan S Manne

How Much Aid to End Aid

Alan S Manne This aggregative calculation attempts to discover the implications of self-reliance for the Indian economy. The tradeoffs are examined between: (a) the rate of growth of domestic consumption, (b) the near-term aid requirements, and (c) the date by which self-reliance is to be reached, The author examines the case in which India wishes to reduce its dependence on external assistance at a gradual pace over time, and yet maintain a rate of consumption growth above that Which is initially compatible with the country's internal resources. In these conditions, it is suggested that there would be severe difficulties in attempting to reach self-reliance within a period as short as five years. A large fraction of aid would have to be devoted to preparing for the termination of aid, rather than for promoting the near-term growth of consumption. If a five-year self-reliance target were to be adopted and the annual output-capital ratio were 0.40, this would imply that for each 100 crores assistance during the initial year, there would have to be an allocation of Rs 41 crores of aid to end aid.

Between Scylla and Charybdis-The Arithmetic of Investment Rates

This numerical exercise deals with the aggregate size of the Fourth Plan; An, attempt is made to quantify both the long and the short-run consequences to the Indian consumer.
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