Describe and explain the simple Harrod-Domar Growth Model and its relevance to India’s Five Year Plans.
The Harrod -Domar growth model goes on to explain the relationship between economic growth, which is the level of savings and capital in terms of productivity required. This is widely used in developing countries. This model was developed independently by Roy Harrod and Evsey Domar in 1940. This model is based on real life happenings which can be observed like not all people that live do work. Therefore there is unemployment and goes ahead to explain that capital(which is money) is the binding constraint on production and growth.
The growth An aggregate production function is the base for any economic growth model. It’s function can take up in different forms, where we can calculate production and output. Factors that can have an impact on the outcome are based on (agriculture, heavy industry,light labour,intensive manufacturing
Knowing the difference between economic growth and development will only give rise to national income.
Whts the growth model – explain each formauls and wht it means
How did help in Indians development
How the 5 yr plan works y it was introduced spk abt 1 o0 2 of the 11 plans available.
The relevance that the growth model has to India’s five year plan is that India’s GDP grew at a rate of 4% per year during the first two Five year plans which was from 1951-56 and 1956-61. This rate of growth is reported to be 2 to 3 times higher than the rate recorded under the British administration. During this period it is where it opened doors to licensing of private investments in certain sectors. Then prime Minister Nehru
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