Assessment of the development model

Nehruvian economists believe that state controlled industrialization leads to economic growth which in turn leads to general prosperity and alleviation of poverty through diffusion (Figure 23.1). There are several strong assumptions in this argument:

• Investment in industry rather than agriculture always means that there is a higher return on it.

• For the benefit of the nation the industry must be regulated and controlled by the state.

• Growth always leads to diffusion (He was clear in his mind that as. the country achieves a higher rate of growth the level of income of middle and poor classes will also get an upward push)

• Diffusion alleviates poverty.

• Economic indicators are the true indicators of individual and social health.

• Economic development itself solves the national socio-political problems. Put it differently, economic poverty leads to social and cultural poverty and this is true at both individual and social levels. A poor country is marked by distrust, divisions, conflicts, and hostilities and if India is to emerge as a strong and united country we have to give maximum priority to economic development.