The case Concerns the small car investment project about which the Government of India was to announce a decision in 1955. The problem was: In view of the existing idle capacity in the indigenous industry, and the foreign exchange shortage, was the decision to go ahead with a new Small car project was justifiable. The case calls for an analysis of national priorities ,economies of scale and the economics of capacity utilization in the automobile industry and the problems of resource allocution in national planning. It also highlights the inevitable. Conflicts between the economic and socio-political goals in an economy.