Inter-Sectoral Balance in Fourth Plan-A Demonstration Exercise

The Approach to the Fourth Plan considers 5 per cent and 10 per cent growth rates for agricultural and industrial sectors, respectively, as feasible, along with price and exchange stability. This paper shows that these growth rates imply that the final demand for agricultural goods should be limited to 69 per cent of the output of the agricultural sector instead of 76 per cent as at present. Since exports are targeted to increase by 7 per cent per year, domestic consumption will have to be curtailed drastically.