Impact of assistance under P.L. 480 on Indian economy 1956–1970

In a developing country a crisis of “food gap” cannot be ruled out because of the aggregate demand of such an economy has a tendency to increase on one hand and the elasticity of supply is low on the other1 There has been a substantial increase in the population of many developing countries since the 1950s and the food production has failed to keep pace with demand.2 One bad harvest in a region could mean food shortage. Bad harvest in two consecutive years could mean disaster. Indian case has to be seen against the background sketched here.