Economics(Paper-4) - Shivaji University

economic organizations and institutions. According to Rostow, “preconditions for takeoff
are an era, when society prepares itself for sustained growth”.
Rostow has suggested that pre-conditions for take-off require radical changes in
the three non-industrial sectors. First, there should be expansion of social over-head
capital i.e. development of transport, communication, roads, etc. Secondly, radical
changes should take place in agriculture and thirdly, there should be an expansion of
foreign trade. The radical change of these three sectors is essential to take-off of an
economy.
Briefly it can be summed up that pre-conditions for take-off required the evolution
of modern science and technology, rational and scientific attitude of the people,
expansion of social over-head capital particularly transport, rising agricultural productivity,
large extent of market and expansion of internal and external trade.
3. Take-off :
The various factors discussed in the second stage, prepare the ground for third
stage of economic growth i.e. take-off. The expansion of different sectors transforms
the basic structure of an economy and it starts moving on the road to self-sustained
growth. Rostow defines take-off stage, “as an interval during which the Rate of
investment increase in such a way that real output per capita rise, and this initial increase
carries with itself radical changes in production techniques and the disposition so income
flows, which perpetuates the new scale of investment, and perpetuate thereby the
rising trend in per capita output.”
During the take-off, obstacles of resistance to steady growth are overcome and
forces of economic development expand and dominate the society. Then growth
becomes automatic during the stage of take-off. Modern writers call it by different names
such as, “a big push”, “an initial push”, “critical minimum effort”, “a great leap forward”,
etc.
During take-off industries expand rapidly yielding profits, profits are invested in
new industries, demand for manufactured goods expands, expands demand for
agricultural products, rise of level of income, expand financial institution etc. These
changes lead the economic growth rapidly and it becomes self-sustained.
B Pre-Requisites for Take-off :
Rostow has suggested three conditions for making the growth process selfsustained.
These conditions are discussed as follows.
a) Rate of Investment :
Rostow has suggested that the rate of net investment for self-sustained growth
should be over 10 per cent of the national income. The rate of increase in investment
should, however, outstrip the growth of population. Rostow explained this point with the
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