Mahalanobis Model

In 1950s, an Old Russian Model was indianized by PC Mahalanobis, the founder of Indian Statistical Institute and a close aide of Pandit Nehru. This model is known to have set the statistical foundations for state-directed investments and created the intellectual underpinnings of the license-raj through an elaborate input-output model. This Model suggested that there should be an emphasis on the heavy industries, which can lead the Indian Economy to a long term higher growth path. India’s second five year plan and Industrial policy Resolution 1956, which paved the way for development of Public Sector  and license raj; were based upon this model.