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Theory

Of
Big Push
Introduction
Problem of capital formulation is widely recognized as the principal bottleneck in the
process of growth in less developed countries.
Two theories deserved special mention in this regard :
1. Theory of Big push
2. Theory of critical Effort
Theory of Big push
Was pronounced by a notable economist, Rosenstein Rodan, in his Pioneer work
Notes of the Theory of Big Push.
A strategy to emancipate the less developed countries from clutches of vicious circle of poverty
Refers to the strategy of injecting into systems such as lump sum investment that breaks the
shackles of economic pessimism


Offers private investors enough of investment opportunities with high rates of profit
According to the theory, there ought to be a critical minimum size of growth programme so that
the constraints of indivisibilities and discontinuities in the system are effectively overcome
Need of Big Push
2. Indivisibility of Demand
1. Indivisibility in the Production Function or in
the Supply of Social Overhead Coasts
3. Indivisibility of supply of saving
a) Time process involving long gestation lag before investment actually become productive
b) Heavy mechanization, involving huge investment expenditure over years
c) Interdependences between various types of infrastructural projects
This refers to interdependences of different industries as regards the demand for their products
A critical minimum investment in the terms of Big Push calls for a critical minimum saving
Potential in the system.
Large saving are possible only when the size of income is large.
Implications
Prof. Rodan
A Big Push seems to be required to jump over the economic obstacles to
development
An atmosphere of development may only
Prof. Myrdal
States that backwardness and poverty are impediments to generating
sufficient resources for any development programme in less developed
countries
Basis of the Big Push Theory
External economies are the principal basis of the theory of Big push
External economies act as a catalytic agent in the process of growth.
Prof. Rodan
states that stressing the externalities is what separates the theory growth
from a Static Theory
Scitovosky
External Economies mean services rendered free by one producer to the other
Features of Theory of Big Push
3. Planned Industrialization
2. Investment in Different Sectors
1. Massive Investment
The theory investigates massive investment at the very outset of the process of growth
The theory stresses the need for investment across different channels of growth
The theory underlines the need for planned industrialization of less developed countries.
Criticism
JacobViner,Horward and Edler have criticized the theory of big push
1. Impractical
2. Less Increase in Production
6. Inflationary
5. Not a historical Fact
4. More Production from Less Investment
3. Neglect Of agriculture
THANKING
YOU
Submitted By
Kamana, Nancy
Anu, Ruchi
Guided by Ms
Poonam Arora

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