2016 · Q104
‘Unbalanced growth’ is hypothesized when
Indian EconomyGrowth and sectors
- AExpansion can take place simultaneously on several growth routes
- BSupply of labour is fixed
- CSupply of capital is unlimited
- DActive sectors need to, and do energize sluggish sectors.
Explanation
The unbalanced-growth hypothesis (Hirschman) argues that when resources such as labour cannot be spread thinly across all sectors at once — the supply being fixed — development must proceed through concentrated investment in strategic sectors whose linkages then pull the rest of the economy. Simultaneous expansion on several routes (A) describes balanced growth instead. Hence (B).