Mars, Penelope Amey (1984) The rubber industry of India: a vital industry in the planned economy. (MPhil thesis), Kingston Polytechnic, .

Abstract

The object of the thesis was to examine the planning system of India and to assess the ways in which it affected the rubber industry between 1951 and 1979. The planning system has been biased towards heavy industry and transportation so that tyre manufacture had priority. The initial bias in favour of autarky resulted in neglect of possible trade development, but this was gradually relaxed. The manufacture of all rubber products was controlled by a licensing system. Delays before passing a Land Reform Act in 1964 led .to a multiplication of very small rubber holdings planted with low-yielding stock. Although the output of natural rubber increased considerably, attempts at subsidised replanting of smallholdings were less successful than they might have been largely owing to lack of foreign exchange to secure trained supervisory personnel and supplies of foreign planting material. Shortage of foreign exchange stemmed from the failure to develop trade. Rubber estates were not subdivided but their expansion was severely restricted leading to a sacrifice of economic viability since they managed to replant almost totally with high-yielding stock despite heavy taxation. Estates were more productive than smallholdings. Throughout the period, natural rubber was subject to minimum price control which benefited growers. Maximum price control existed until 1963 when it was virtually abandoned although 12 large manufacturers were said to influence prices. Tyre prices were controlled up to 1974. The prices of other rubber manufactures were not controlled so that the producers were able to recoup themselves for the high prices of natural rubber. However, priority in the acquisition of raw materials enabled the tyre industry ,to expand at the expense of other manufactures. Indian planning has been flexible: licensing controls and import restrictions were relaxed in the 1970s while exports of rubber products were encouraged by such measures as cash incentives and duty drawbacks.

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