Walt Whitman Rostow’s work has been a great influence in the field of development economics and economic history. His pre-defined stages of economic growth are useful in breaking down the story of each national economy. According to this model, each economy must pass through five stages of development regardless of the form of its social organization or ideologies Although many do feel that in today’s times’ his work is ‘passé’. To quote Rostow, “These stages are not merely descriptive. They are merely a way of generalizing certain factual observations about the sequence of development in modern societies. They have an inner logic and continuity. They have an analytic bone-structure, rooted in a dynamic theory of production.” (On the Regional Dimensions of Rostow's theory of growth) Here, we attempt to analyze and identify the salient features and the relativity of each stage.
Traditional Society: This is the stage where science and technology in an economy are crippled. Innovation and discovery are not a feature of this economy. The per-capita income continues to be at a lower level and there is an obvious hit to the growth on productivity. Resources of the economy are mainly dedicated to food supply and the remaining resources are used for non-production purposes. In such economies, one can’t expect a very high rate of capital accumulation and most authority of resources lies in the hands of the elite. This stage represents the one where little encouragement is given to initiating economic change.
Pre-conditions for take-off: During this stage, economic progress is considered to be desirable and possible. Rationalization, modernization, and export of agricultural produce are facilitated along with an import of capital goods. This leads to an efficient increase in the supply of net capital. Politically this is the phase when a strong nation builds up along with the formation of commercial institutions.
Take-off to sustained growth: This stage as viewed by Rostow is the most critical yet the most difficult to attain (On the Regional Dimensions of Rostow's theory of growth). This stage is known as the ‘rise of the primary sector’, which further accelerates ‘supplementary growth’ in other sectors. It also means the presence of at least one manufacturing sector and the acceptance towards the latest technology in the primary sector. The presence of an institutional framework that backs the primary sector and is capable enough to diffuse its benefits throughout the economy is suitable. This leads to progressive capital build-up and sometimes a spurt of population growth.
Drive to maturity: This phase begins approximately after twenty years since the take-off stage starts. Surprisingly this period is of quite a shorter duration compared to the take-off stage. The modern techniques of production are no longer confined to just the leading sectors of the economy. This is the time when there is more technical sophistication in supplementary sectors than the earlier leading sectors. On the political and social front adjustments strive to make their way and growth are not necessarily taken for granted.
Age of high mass consumption: This stage is glorified by the high accumulation of economic surplus. In the wake of clearance of this surplus, there are welfare programs, overseas investment, and at last driving the economy towards a typical pattern of consumption. There is a sudden growing importance of consumer durables, housing goods, health and recreational facilities, and the importance of higher education. Each of the above stages focussed on production while this stage focuses on consumption still giving importance to production.
The Relationship of India with Rostow’s Model
India is not just a developing country but also an emerging economy in the world. India’s economy is not just uniform in nature unlike what is prescribed in the model. We have 28 states and 8 union territories, and all of them have different stages of growth which is clearly reflected in their sectorial shares (Arora). Every state of India is at a different stage of economic growth. States like Uttar Pradesh and Bihar are not yet fully developed for the take-off whereas some states like Tamil Nadu, Gujarat, and Maharashtra have been in the last stage of development for a long period of time. There are differences among states in terms of birth rates, urbanization, and dependency ratio etcetera. But these states are becoming less and less diversified because they have been adopting the major skill-development techniques of production (Arora). After extensive research, it has come to notice that in India there is a massive overlap in the stages (Arora). Here, we are referring to the co-existence of various features of the diverse stages of economic growth at the same time. Indian states have intra-regional and inter-regional disparities that account for a crooked development process. In the end, the criteria for reaching each stage will differ according to the country’s colonial past, history, culture, social changes, technological improvements, and initial economic development is taken into consideration. The concepts which are largely understood and analyzed at the national level may differ in their significance and implications at the regional or the state value.