|Technological Independence The Asian experience (UNU, 1994, 372 pages)|
|7. The lessons from Asia: From past experience to the future|
In the case of India, a Soviet-inspired planning model was imposed on a mixed economy, the "commanding heights" of the economy and key industries being largely in state hands. This implied that, unlike in the Soviet Union, market signals as well as administrative guidance mediated the economy, giving rise to a potentially more flexible system.
Particularly since her second Five-Year Plan, India has emphasized the development of an S&T capacity. By the third Plan, an extensive network of institutions for pure and applied research had been established, and the state was allocating about 1 per cent of total public outlays to the S&T programme. The different plans in India resulted in a sequence of somewhat differing emphases. These included: self-reliance primarily by building up the capital goods and machine-building sector, and the use of scientific research for the "benefit of the people" (the third Plan); maximizing the use of indigenous resources, employment, modernization, capacity utilization, and energy efficiency (the sixth Plan); and consolidating and modernizing the S&T infrastructure already built up and promoting certain front-line areas (seventh Plan, 1985-1990). The later plans recognized the lack of linkages between the S&T system that had emerged and the economy, and emphasized the need for this linking.
By the early 1980s, the Indian strategy had brought down the share of imports in gross capital formation to virtually a tenth of what it had been in the 1960s. This trend towards self-sufficiency was particularly noticeable in areas where the rate of technological change was not very fast. Indian firms had also developed a capacity for adapting imported technologies to the local context. And, although India still had a high percentage of illiterates among her population, she had expanded her higher and technical education to reach an estimated total of around 800,000 personnel in 1990.
However, although the relative achievements of Indian S&T were considerable, it was less successful that it could have been. The use of locally generated technology in large modern industries tended to be small and the national laboratories that had been developed had not become significant sources of industrial technology. Furthermore, despite financial incentives, the number of in-house R&D units was still small. There was no significant spill-over of S&T into the industrial economy. And, as in China, S&T tended not to be demand-driven, but to exist in isolation. In addition, studies have indicated that Indian scientific output has not been commensurate in quality and creativity with the numbers engaged in science.4
The Indian policy in S&T, like that of the Chinese, had been primarily one of import substitution. After debate, however, a general trend towards liberalization began in 1979 (as it did in China at around roughly the same time). The import of capital goods was liberalized. A significant increase in imported technology resulted after the 1980s, although the technology import policy still remained selective, targeting specific areas. New measures announced in mid-1991 pushed these tendencies further.