The acute regional imbalance in the development and industrialisation of the various areas of the country has come sharply into focus during the last year or two. Various measures have, therefore, been taken to provide direct assistance on softer terms for the setting up of projects in the less developed areas. Under the scheme announced in July 1970, the Industrial Development Bank of India has decided to extend direct loans to industrial units in specified backward districts at a concessional rate of 7 per cent instead of the normal rate of 8 per cent. Certain other concessions regarding the period of repayment, lower commitment charge on the undrawn balance of the loan, liberal under-writing facilities have also been announced to enable faster growth of the neglected regions of the country. Under the new licencing policy, various measures have been announced to liberalise the licencing of the new entrepreneurs and those entrepreneurs in the lower and middle range and to put further restrictions on the big and dominant monopoly houses. The Government has also announced its decision that the public financial institutions will retain the option of conversion of loans into equity so as to have a more positive say in such industries and sectors of the economy which are of vital concern to public interest. The scope of the public sector has also been extended -to the production of consumer goods. The principle of joint sector has been accepted by the Government and this may well be the pattern of new enterprises in years to come. I have outlined some of the important developments in the economic field during the last few months as they have firmly set a new direction to our approach.
It has often been said in recent months that the strategy or the orientation of the recent decisions of the Government is hardly well-conceived and rational and there is only an attempt to find experimental and ad hoc solutions to meet the immediate political requirements. But as I had mentioned earlier, it is difficult to conceive of economic strategy for the whole country with its massive problems in a vacuum. The process of growth cannot merely be equated in terms of preparation of theoretical growth models. If the plan has to be successful, it must have the willing cooperation and support of the millions for whose betterment it is prepared. It must be not only rational and logical but also real and pragmatic. I firmly believe that economic development is not merely an economic concept and there can be no standard solution to the problem of growth in the developed and the developing countries. The social, political and historical setting within which planning has to be attempted and made successful is not the same in all countries or for that matter even in the same country for all the times.