Importance Of Technological Progress In Economic Growth

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3. Technological Progress and Economic Growth: Another important factor in economic growth is progress in technology, Use of advanced techniques in production or progress in technology brings about a significant increase in per capita output. Technological advance refers to the discovery of new and better ways of doing things or an improvement in the old ways. Sometimes technological advances result in an in¬crease in available supplies of natural resources. But more generally technological advance re¬sults in increasing the productivity or effectiveness with which natural resources, capital and labour are used and worked to produce goods. As a result of technological advance it becomes possible to produce more output with same resources or…show more content…
The growing population increases the level of output by increasing the number of working population or labour force provided all are absorbed in productive employment. Labour is combined with capital to produce goods and services. Therefore, increase in the quantity of labour force will contribute to economic growth when the cooperating factor capital is also increasing. In the modern times workers need machines, tools and factories to work. Since a developing country such as India has a lot of surplus labour but a small stock of capital, the workers cannot be productive if they are employed in some…show more content…
The fact that more multinational corporations are investing in India signifies that India is increasingly focusing on the industrial sector. The increase in Foreign Direct Investments resulted in the Government of India making critical reforms in 1991 and since then, the emphasis on Indian industry has been constantly on the rise. The political impact of larger FDI is influencing the government to initialize and support concepts like liberalization. The political climate is focusing on liberalization of banking, telecom, infrastructure, and insurance sectors. The political scenario is changing gradually, and is accepting the concept of Foreign Direct Investment widely within the country. The government is looking forward to working on the rural areas and bringing about equality in terms of investment and wealth distribution with the urban areas. In November, 1991 there was tremendous activism against opening up the Indian market to multinational corporations. But now, the situation is completely different since there has been an increase in the investment of multinational corporations. The political scenario too is learning to accept globalization and privatization with an open and progressive outlook. Reformation in this regard is taking place in the public sector, financial services, and tax structures as well. The political scenario of India is looking forward

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