Rostow's model and India's development

Rostow's model summarises economic growth of countries into five different stages:

  1. traditional society - characterised by subsistence farming or hunter-gathering
  2. preconditions for take off - manufacturing industry begins to develop, and a country develops an international outlook
  3. take off - short period of intense activity where urbanisation increases and industrialisation proceeds with technological breakthroughs.
  4. drive to maturity - where industry diversifies and investment is made in infrastructure and improving quality of life over an extended period of time
  5. Age of high mass consumption - where mass production feeds consumer demands.
Level of development increases over time: traditional society, preconditions for take off, take off, drive to maturity, age of high mass consumption.

It is possible to put any country of the world into one of the stages. For example, most sub-Saharan countries would be in stage 2, while developing economies like Vietnam and Thailand are in stage 3. The UK would have also been found here back in the Industrial Revolution years of the mid-1800s. The emerging economies of places like China and Argentina are in stage 4, while the USA, UK, and most western European countries are in stage 5.

India is a difficult country to place on the model, due to its many regional variations. However, as a nation it would probably be currently placed somewhere between stages 3 and 4.

Rostow's model is now a little old and outdated, as it could not have foreseen many technological developments that have taken place since its creation. It also did not allow for the influence of international aid in some parts of the world.

Changing industry in India

There are four main types of job or industry in India. These are:

  • primary, which involves getting raw materials from the land, eg farming or forestry
  • secondary, which is making products out of raw materials, eg food processing and car manufacturing
  • tertiary, which is providing a service, eg doctors and teachers
  • quaternary, which means ICT and research (eg computer software designers), scientists, and telecommunication industries

A country's industrial structure is the percentage of people working in each job type. Changing the balance between these four sectors of industry can help a country to develop.

Up until the 1980s, India's main type of industry was primary. Many people were subsistence farmers, which is not very profitable. From the late 1980s, the Indian government encouraged foreign transnational corporations (TNCs) to set up within the country. Factories were built and secondary jobs in manufacturing were created. Factory workers earn more money, which means that they can afford to pay people for services, such as entertainment and healthcare. Workers in the tertiary (service) sector are paid more than in primary and secondary.

The additional wealth generated from the changing industrial structure in India has created a multiplier effect - as one thing improves, it allows other elements to improve too.

The multiplier effect: TNCs set up factories, factory workers spend money locally, local services have more trade, government receives more tax, government invests in infrastructure.The multiplier effect