Statement I: The theory of Unbalanced Growth was indeed advocated by Albert O. Hirschman. He is the most prominent figure associated with this development theory. Statement II: The theory proposes that deliberate imbalances in investment across different sectors can stimulate growth. By investing heavily in specific 'leading' sectors with strong forward and backward linkages, it creates bottlenecks and pressures that induce investment in other 'lagging' sectors, thus propagating growth throughout the economy. The concept of forward and backward linkages (e.g., investment in steel industry creates demand for iron ore and coal (backward) and facilitates industries using steel (forward)) is central to this theory.
Given below are two statements: Statement I : The theory of Unbalanced Growth was advocated by Prof. Hirschman. Statement II : The theory of Unbalanced Growth states that investment should be first made in certain core sectors of the economy which have a high degree of complementarity. Once, the process of growth is initiated, it will spread to other sectors through forward and backward linkages. In the light of the above statements, choose the most appropriate answer from the options given below :
Asked in HPPSC HPAS Prelims 2023 · Topic: Sustainable Economic Development (Concept and Evolution of Sustainable Development)
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Answer: A. Both Statement I and Statement II are correct
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