Stages of Economic Development:

Professor Rostow, an eminent economic historian and a specialist on economic development, has divided the historical process of economic growth into five stages:

(1) The traditional society;

(2) Pre-conditions for take-off;

(3) The ‘take-off;


(4) The drive to maturity; and

(5) The age of high mass consumption.

Now a word about each of these.

(1) The Traditional Society:

In a traditional society, modern science and technology are either not available or are not being systematically applied. However, there may be ad hoc application of innovations. Production can also increase due to increase in acreage.


Domestic and foreign trade can change in composition. But the distinguishing feature of the traditional society is that there exists a ceiling to the level of the attainable per capita output. A large proportion of productive resources are devoted to agriculture.

(2) The Pre-conditions to Take-off:

Covers a long period of a century or more during which the pre-conditions for take-off are established.

These conditions mainly comprise fundamental changes in the social, political and economic fields; for example:

(a) A change in society’s attitudes towards science, risk-taking and profit-earning;


(b) The adaptability of the labour force;

(c) Political sovereignty;

(d) Development of a centralized tax system and financial institutions; and

(e) The construction of certain economic and social overheads like rail-roads and educational institutions.

(3) The “Take off” Period:

This is the crucial stage which covers a relatively brief period of two or three decades in which the economy transforms itself in such a way that economic growth subsequently takes place more or less automatically. “The take-off” is defined as “the interval during which the rate of investment increases in such a way that real output per capita rises and this initial increase carries with it radical changes in the techniques of production and the disposition of income flows which perpetuate the new scale of investment and perpetuate there by the rising trend in per capita output.”

The term “take-off’ implies three things-, firstly the proportion of invest­ment to national income must rise from 12% to 15%, dennitely outstripping the likely population increase; secondly the period must be relatively short so that it should show the characteristics or an economic revolution; and thirdly, it must culminate in self -sustaining and self-generating economic growth.

(4) Drive to Maturity:

This is, of course, a long period of self-generating and self propelling economic growth. ‘The rates of savings and investment are of such a magnitude that economic development becomes automatic. Overall capital per head increases as the economy matures. The structure of the economy changes increasingly.

The- initial key industries which sparked the take-off” decelerate as diminishing returns set in. But the average rate of growth is maintained by a succession of new rapidly-growing sectors with a new set of pioneering leaders; the proportion of the population engaged in rural pursuit’s declines, and the structure of the country’s foreign trade undergoes a radical change.

(5) The Age of High Mass Consumption:

During this stage, the per capita real income increases to the level at which a large number of people can afford consumption transcending the basic food, shelter and clothing requirements. There is tendency for the leading sectors to shift towards durable consumer goods and services. The present economies of the U.S.A., the U.K., Western Germany and Japan represent this stage. India seems to be yet in the second stage, i.e., pre-conditions to the take-off stage.