Economic Crisis in India and the Fifth Five Tear Plan
Full text of the statement containing the conclusions of the Third All India Conference of the Indian School of Social Sciences held in Bombay between November 16 and 19^ 1974^ is given below.
CRISIS is inherent in the capitalist system. Often identified with steeply decelerated or depressed activities, it appears as part of secular, short-term and seasonal fluctuations in the capitalist economy. Dwindling growth fates, recurring recession, rising unemployment, galloping inflation, falling real wages and unstable currencies are some of the recent manifestations of the deepening economic crisis of the world capitalist system. As former colonies and dependencies still tied to the imperialist countries through trade and 'aid9, the 'developing countries' are precariously exposed to the instabilities of the 'developed" capitalist world. Deteriorating external values of currencies and unfavourable prices of scarce raw materials and capital goods are some of the ways in which the crisis in the advanced capitalist countries is transmitted to the developing economies. Indian economy has been vulnerably open to some of these external influences though it is obvious that the current crisis stems largely from the unique colonial heritage and internal contradictions.
Indian economy was in the grip of stagnation for more than four decades preceding independence. The rate of accumulation was so low that the national income growth was hardly adequate to neutralize the population increase. Though the colonial heritage of a lopsided enclave-type development had somewhat restricted the Indian economy since independence, the per capita real income grew at the rate of about 1.9 per cent per annum in the first decade of planning. Even this modest growth rate could not be sustained on account of the cramping influence of the remnants of feudal and semi-feudal relations in land, the growth of monopoly and concentration of economic power in industry and urban property. The expansion of the public sector has only helped these tendencies. The slowdown in the growth rate is largely attributable to the contradictions and constraints in property relations both in land and industry that have developed since independence. It is this systemic disability which has placed impediments in the path'bf capitalist development especially after the Third Plan.