Take off Stage of Economic Growth in UDC

The idea of take-off has a relevance to the problems of industrialisation, in UDCs.

According to Prof A, K. Das Gupta, “The term lacks precision and yet it is suggestive and can be given interpretation which is useful for an understanding of the process of the economic development of an UDC.

It is indeed the vagueness of the term that gives it strength, for one can put an interpretation upon it to suit the conditions of the economy in which one is interested.”

Of the three necessary conditions for take off, the first two, namely capital formation over 10 per cent of national income and the development of one or more leading sectors, are helpful in the process of industrialisation of backward countries. So far as the first condition is concerned, there can be little doubt about achieving that percentage. But the second condition can be molded to suit a country’s environments.

The last condition is more important in the context of UDCs where monetary and political institutions and skills and technology are at a low level whereby they retard the expansion of the modern sector. Prof Higgins remark? The usefulness of Take off stage of poor countries.

“It is with both the problems and cyclical movements of national income in such growing economies in the fourth stage that the bulk of modern theoretical economies is concerned. The students of the contemporary UDC are more likely to be concerned with the economies of first three stages. If we are to have a useful and adequate theory of economic growth, it must obviously be comprehensive enough to embrace these three stages as well, especially the economies of take off. Thus, the concept of take-off is more suitable for the industrialization of poor countries.”

Limitations:

The concept of take-off, no doubt, carries a wide acceptance among UDCs, yet it is a dangerous weapon. It has to be used with care by the planners of poor countries.

There are certain limitations which do not allow the concept to work properly, which are stated as under:

(а) Capital Output Ratio not Constant:

While calculating the capital requirement for take-off period, Rostow assumes capital output ratio as fixed. This implies constant returns to scale. This assumption is valid in case of advanced economies. But UDCs are characterised by the predominance of agriculture and primary production. Thus, the planner of UDCs cannot rely upon constant capital output ratio for the calculation of capital requirement for take-off

(b) It Ignored the Removal of Unemployment:

The concept of take-off has been criticized on the ground that is does not consider the problem of unemployment at all. Most of the UDCs are faced with the problem of unemployment. The concept of take-off is of little utility to UDCs as it fails to consider the urgent problem like that of unemployment. Prof. A.K. Dass Gupta is of the opinion that the elimination of unemployment should be one of the conditions of take-off.

Unless the problem of unemployment is tackled effectively, the higher level of investment will not generate the momentum for the self generating growth in an economy. Once full employment is secured, the economy is raised to a level where growth is self-sustained and spontaneous. Therefore, it is imperative for the over populated country to have elimination of unemployment as one of the conditions for take-off.

(c) Economic Development not Spontaneous:

The concept of take-off suggests an element of spontaneity which is of little significance in the context of UDCs. But according to Prof. Lewis, “a take-off is not an instantaneous process. It is an exercise that requires time and from which, after a certain speed has been attained and a portion of the runway used up, there is no turning or even safe throttling down.”

(d) Aeronautical concept not Correct:

Prof. Bicanic, does not agree with the symbolical presentation of the take-off as it appears to him like a light flying animal just got at off from the earth and floating in the air. In fact, it is like creeping over a very difficult threshold of economic development. One has to creep it, one can’t fly over it. It is not a take-off but a very painful process which every UDCs has to go through.

(e) Removal of Obstacles not discussed:

The concept of take-off suggests the conditions for accelerating the pace of development, but fails to throw light for the removal of certain obstacles faced by UDCs. In initial stages of economic development, certain inhibiting factors also appear in the underdeveloped economies. Unless these obstacles are removed, the development could not be a smooth process. The take-off is silent about these problems of development.

(f) Element of Ambiguity:

Another limitation of the concept that there is an element of ambiguity in this concept of take-off when applied to UDCs. During the take-off investment increases with a rise in the national income without reducing average propensity to consume.

In a technical speaking sense, there is an “excess of the marginal rate of saving over the average rate of saving, so that the average rate keeps on rising…. the final level is characterised in this manner by a constant, though high, average rate of savings.” Prof. A.K. Dass Gupta, puts it “This does not seem to be a sensible interpretation for even a highly developed economy where the average rate of saving may not remain constant.”