Planning involves not merely the mobilisation of resources but also their allocation in accordance with a rational scheme of priorities between different sectors of activity, including the different segments of industry. Needless to say, both size of investment outlays and their allocation are crucially dependent on the final objectives of our development programmes. One cannot hasten the pace of progress without raising the overall rates of saving and investment; nor can a high rate of growth of industrial production be sustained for long without a commensurate expansion in the output of basic and machine building industries or without adequate power and transportation infrastructure. We cannot realistically envisage industrial growth in the coming years in terms of emphasis on movement along any one direction -growth of consumer goods industries or growth of capital goods and basic industries. Unless growth is balanced, capacity bottlenecks, inadequate infrastructure and shortage of key intermediates would very soon begin to act as a drag on industrial growth.
Domestic savings and investment outlays financed by them have, as a proportion of national income, more than doubled since the early fifties. The growth of domestic savings enabled us throughout to minimise our dependence on external assistance; and we have now reached a stage where the net inflow of external resources for development is beginning to acquire a marginal character. However, sizeable as this rise in domestic savings appears to be, it remains quite inadequate to fuel a faster rate of growth of national income than the one we have been able to achieve so far. Manifestly, every effort has to be made now to set aside a larger part of our annual output of goods and services for the purposes of productive investment. Wasteful use of resources has to be avoided and the more affluent among us should curtail spending on conspicuous or inessential consumption. What I have in mind here is not merely personal consumption but also what may be termed 'institutional consumption'. that is to say, conspicuous or luxury consumption financed by corporate income rather than by individual earnings. Our way of life must now be guided by a certain sense of austerity.