BALANCED GROWTH THEORY

As indicated by Prof. Kindleberger, the idea of Balanced Growth Theory can be clarified in various routes, as:

  • If investment is made simultaneously in all sectors of the country, it will be a balanced growth.
  • If investment is made in the economy in such away that the lagging sectors of the economy could also come up to the level of leading sectors of the economy such will be called balanced growth.
  • If investment is made to develop both agriculture and industrial sectors such will be the balanced growth.
  • If a balance is restored in the production of consumer goods or some balanced is restored in the production of capital goods, it will be given the name of balanced growth.
  • If govt, gives equal preferences to all the regions of a country, such will be regional balanced growth.
  • If equal expenditures are made on Directly Productive Activities and Social and Economic Overheads, such will be a balanced allocation of resources.
However, in the present discussion, by balanced growth (BG) we mean the equal and simultaneous growth of all the sectors of the economy so that they could be having a uniform rate. For example, if in Pakistan, both agriculture and industrial sectors are promoted by giving them facilities in such away that both the sectors grow at the same rate, such will be called Balanced Growth. We find the concept of BG in the writings of Prof. Rosenstein, prof. Nusrkey, Prof. Singer and Prof. Lewis. As Rosenstein writes, when different industries which are complement to each other are set-up it will be the most feasible investment. It means to say that if investment is made in so many mutually supporting industries, it will reduce unemployment and the process of development will be initiated. He says that if a shoe-factory is set u in a locality where 20,000 people were unemployed. In the first stage these people will get employment. They will spend their earnings. Then following multiplier effect, other industries could also flourish. Thus, in the presence of complementary industries this fear will also vanish that the goods of an industry would remain unsold. Hence, Rodan suggests establishing so many industries to solve the problem of limited markets. “When” once the issue of limited market is resolved the economy may move on the path of economic growth.

Prof. Nurskey explains BG theory as: The UDCs are entrapped into vicious circle of poverty (VCP). As a result, the per ca pita income in these countries remains poor. Therefore, there is a need to break this VCP. For this purpose, he suggests upon establishing so many industries. So many firms which are supporting to each other will create demand for each other’s products. In this way, the VCP could be broken. In other words, if UDCs establish mutually supporting industries, not only the issue of limited market will be resolved, but the process of growth will also start. As the customers which will be working with more and better instruments in the complementary projects will serve each other’s customers. When so many mutually supporting industries are set up the complementarities and external economies will be availed of. Again, when investment in so many industries is made, the horizontal and vertical integration of industries will take place. There will be division of labor, common source of raw material and technical skill will become available; there will be a better use of infra-structure; and there will be physical investment, in addition to human capital formation. Prof. Singer writes in this context as: the increase in industrial production requires an increase in agriculture production. If employment in industrial production increases the demand for food will increase. Therefore, the food supply will have to be increased. Moreover, the supply of raw material will also have to increased to meet the industrial demand. It implies that there ought to be an adjusted development of horticulture and modern area with the goal that swelling could be kept away from. According to Prof. Nurksey, the balanced growth requires that there ought to be an adjusted in the middle of residential part (household exchange) and remote area (outside exchange). In other word, there should be a balanced in the improvement of family and remote trade. After the discourse we arrive at this conclusion that as indicated by BG hypothesis:

  1. So many industries be set up which could support each other. This will extend the size of market.
  2. There should be a balanced growth of agriculture and industrial sectors.
  3. There should be a balanced growth of domestic and foreign trade. As Prof. Lewis says, “All the sectors of the economy should grow simultaneously in any developmental plan, so there should be a balanced in agriculture and industry, and there should be a balance in between the goods consumed domestically and the goods produced for exports”.

 

3,313 thoughts on “BALANCED GROWTH THEORY

  1. June 22, 2017 at 9:05 pm

    Credo che si sbaglia. Io propongo di discuterne.
    [url=http://rexuiz.top/]Rexuiz FPS Game[/url]

  2. June 23, 2017 at 8:33 pm

    wh0cd273834 abilify

  3. June 25, 2017 at 2:26 pm

    Thank you for sharing superb informations. Your website is very cool. I am impressed by the details that you’ve on this blog. It reveals how nicely you perceive this subject. Bookmarked this website page, will come back for more articles. You, my pal, ROCK! I found just the info I already searched all over the place and just could not come across. What an ideal website.
    Hot exotic beauty in an unforgettable solo tease

  4. June 26, 2017 at 1:40 am

    why is viagra not free on nhs

    [url=http://buyviagraolnline.com/]cheap viagra online[/url]

    buy viagra

    viagra erotic stories

  5. June 26, 2017 at 4:54 pm

    Ha encontrado el sitio con el tema, que le interesa.
    [url=http://www.whorebutt.top/gallery/3025/young-cutie-didnt-notice-when-her-dildo-magically-turned-into-a-dick.html]Young cutie didn’t notice when her dildo magically turned into a dick[/url]

  6. June 27, 2017 at 1:43 pm

    Hello! Would you mind if I share your blog with my myspace group? There’s a lot of people that I think would really enjoy your content. Please let me know. Cheers
    trishaOi

  7. June 28, 2017 at 1:35 am

    I am regular reader, how are you everybody? This paragraph posted at this website is genuinely nice.

  8. June 28, 2017 at 2:58 pm

    Hey would you mind stating which blog platform you’re
    working with? I’m going to start my own blog in the near future but I’m having a difficult time making a decision between BlogEngine/Wordpress/B2evolution and Drupal.
    The reason I ask is because your design seems different then most blogs and I’m
    looking for something completely unique. P.S Sorry for being off-topic but I had
    to ask!

  9. June 28, 2017 at 7:00 pm

    Excusez que je vous interromps, mais vous ne pourriez pas donner plus d’information.
    Hot candy girl real live fuck with two dudes

  10. June 29, 2017 at 9:23 pm

    C’est l’information prГ©cieuse
    Free XXX Picture Galleries

  11. June 30, 2017 at 3:12 am

    I am curious to find out what blog system you have been working with?

    I’m experiencing some minor security problems with my latest site and I’d like to find something more secure.
    Do you have any suggestions?

  12. June 30, 2017 at 2:38 pm

    Oh my goodness! Amazing article dude! Thanks, However I am experiencing difficulties with your RSS.
    I don’t understand the reason why I can’t join it. Is there anybody having similar RSS issues?

    Anyone that knows the answer will you kindly respond?
    Thanx!!

  13. June 30, 2017 at 2:53 pm

    Good day! This is kind of off topic but I need some help from
    an established blog. Is it tough to set up your own blog?

    I’m not very techincal but I can figure things out pretty fast.
    I’m thinking about making my own but I’m not sure
    where to start. Do you have any tips or suggestions?
    With thanks

  14. July 2, 2017 at 3:30 am

    Your style is very unique in comparison to other folks I’ve read stuff from.

    Many thanks for posting when you have the opportunity, Guess I will
    just book mark this blog.

  15. July 2, 2017 at 3:39 am

    We stumbled over here by a different web page and thought I might as well check things out.
    I like what I see so now i’m following you. Look forward to exploring your web page again.

  16. July 3, 2017 at 12:06 pm

    If some one wants expert view on the topic of running a blog then i advise him/her to go to see this blog, Keep up the nice job.
    Rexuiz FPS Game

  17. July 3, 2017 at 4:26 pm

    . Selten. Man kann sagen, diese Ausnahme:)
    Rexuiz FPS Game

  18. July 4, 2017 at 5:21 pm

    Justo! Va!
    Rexuiz FPS Game

  19. July 5, 2017 at 11:45 am

    It was and with me. Let’s discuss this question. Here or in PM.
    British teenage slut sucking Jimbo his stiffy before anal

  20. July 5, 2017 at 1:50 pm

    red and black viagra

    [url=http://viagragha.com/]generic viagra[/url]

    cheap viagra

    pfizer viagra india price

  21. July 5, 2017 at 6:37 pm

    I am sorry, that I interfere, but I suggest to go another by.
    remoteOi

  22. July 6, 2017 at 7:59 am

    Chez tous les messages personnels partent aujourd’hui ?
    Free Adult Picture Galleries

  23. July 6, 2017 at 9:30 am

    A Ud soy muy obligado.
    number1Oi

  24. July 6, 2017 at 11:18 am

    quick faxless loans

    [url=http://soloadvance.com/]payday loans[/url]

    personal loans

    payday loans for bad credit direct lender

  25. July 6, 2017 at 11:31 am

    online pharmacy reviews
    [