Systems Practice, VoL 7, No. 4, 1994 The Systems Approach to Economic Modeling in India M. J. Manohar Rao 1 Received August 10, 1993; revised December 15, 1993 This paper reviews the evolutionary changes that have taken place in the systems approach to macroeconomic modeling of the Indian economy over the last 40 years in general and the last 5 years in particular. Considering the fact that the systems approach has been used both at the official level, for planning purposes, and at the academic level, as inputs to the planning process, the paper covers both these aspects in a thematic manner. Commencing from the initial official efforts, with their empha- sis on aggregate consistency models, through the intermediate phases of developing programming and nonoptimizing systems and, finally, to the current academic interest in control and chaotic systems, this evolution is considered primarily against the backdrop of the changing perspectives of systems theorists and designers. KEY WORDS: multisector consistency systems; programming systems; nonopti- mizing systems; control systems; nonlinear dynamical systems. 1. INTRODUCTION The last 40 years has witnessed an accelerating interest in the field of systems theory in India, which has evolved from initial attempts to construct models of economic growth (Mahalanobis, 1953) into an established approach for for- mulating development policies with an extensive body of literature and wide- spread practice (see Pandit and Tendulkar, 1993). Part of the reason for this evolution has been to evaluate formally some of the major changes in macro- economic policies contemplated by the Indian government, and although debate continues over the role of the systems approach to economic planning and the relations between planning and implementation, there is, by and large, wide- spread recognition of the usefulness of some form of systematic economic plan- ning as a guidepost for formulating government policy. The systems approach to economic modeling currently in vogue in India can be regarded as the product of a series of evolutionary modifications reflecting t Department of Economics, University of Bombay, Vidyanagari Campus, C.S.T. Road, Santa Cruz (East), Bombay 400 098, India. 351 0894-9859/94/0800-0351507.00109 1994 Plenum Publishing Coqooration