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Date: 10/01/2012
7. Financial Services 8. Health & Social Services 9. Tourism Services 10.Transport Services Increasing Share in GDP Providing Employment Providing Support To Other Services Contribution to Exports * Travel * Transportation * Insurance * Communication * Construction * Software * Agency Services * Management Services
Low levels of human well-being; is measured by HDI HDI- Human Development Index
Problems faced by Agri sector till date: a. Slow and uneven growth and rain dependency b. Lack of modern techniques c. Flaws in land reforms d. Problems related to private money lenders e. Warehousing and Marketing facilities and knowledge
Theoretical Underpinning
The classical economic growth theorys main representatives are Adam Smith, Ricardo David and Allyn Young. Those theories mainly focus on analyzing determinant factors of economic growth. They stated that economic growth depends on how much surplus of production will be use on investment, and not all economic activities can provide surplus of production. Adam Smith (1776) divided labor into two categories, productive labor and unproductive labor. He also examined the role of division of labor in economic growth. He claimed two important factors for the growth of national wealth, the ratio of productive labor in total labor and the increase of labor productivity because of division of labor. International trade is a good example for explaining the benefit of labor division, especially when transaction cost and transport cost is very low. Adam Smith and some other scholars later emphasized that key factors for rapid economic growth are international trade, low transport cost and wellfunctioning market system.
Mahalnobis Model
The Indian economy provides a revealing contrast between how individuals react under a government-controlled environment and how they respond to a market-based environment. Evidence suggests that recent market reforms that encouraged individual enterprise have led to higher economic growth in that country. Indias economic development strategy immediately after Independence was based primarily on the Mahalanobis model, which gave preference to the investment goods industries sector, with secondary importance accorded to the services and household goods sector (Nayar,2001).