B.A.III Year DR. SURENDRA KUMAR GUPTA - PowerPoint Presentation

1. B.A.III YearDR. SURENDRA KUMAR GUPTAASSISTANT PROFESSORDEPT OF ECONOMICSDDU GORAKHPUR UNIVERSITY, GORAKHPURUNIT IITOPIC: Choice of TechniqueDEVELOPMENT PLANNING AND ENVIRONMENTAL ECONOMICS28/01/2021

2. OBJECTIVESIn the Previous Class we have known:What is production techniqueLabour Intensive TechniqueCapital Intensive TechniqueIn this class: We will know –Choice of Technique:Factors Influencing the Choice of Techniques in Economics28/01/2021

3. Choice of TechniqueINTRODUCTION: There is a more debate on the question of choosing between labour intensive and capital intensive technique in less developed countries. All concerns differ to each other. Some are in favour of labour-intensive technique, Some are in favour of capital-intensive technique. Before formulating any important opinion on the choice of technique, let us study the arguments for and against each of these techniques.Arguments for Labour-intensive Techniques:Arguments for such techniques are:28/01/2021

4. Conti………………….The first argument in favour of labour- intensive technology is its high employment potential. Poor LDCs suffer from huge unemployment problem.These countries also experience a huge army of surplus labour. By using labour-intensive industry like small-scale and handicrafts industry, employment possibilities of the unemployed labour force can be met in a greater way.Secondly, this technique makes an equitable income distribution since this technique helps in raising the income level of a relatively large member of workers and hence poverty level gets reduced. This technique either increases employment or minimizes the problem of unemployment by absorbing workers.

5. Conti….This technique increases output, consumption, etc.Thus, this technique is helpful in creating roadmap for built up a classless society. Social justice, an important objective of growth and development cab be ensured through this technology.Labour-intensive techniques are not import-dependent technologies as such. Being simple, these technologies are produced domestically. As a result, scarce foreign exchange reserves are not drained out.  Labour-intensive techniques are helpful for the reduction of regional inequalitiesAnother powerful argument in favour of labour-intensive techniques of production is that it can use local underlying resources in a miscellaneous and varied manner. 

6. Arguments for Capital-intensive TechniquesThe capital-intensive techniques of production will make possible a rapid rate of investment as this technology maximizes productivity per worker.The capital-intensive technology has the highest reinvestment quotient’ a faster economic development appears because of high income, savings, and investment.Economic growth rate tends to be higher and faster under capital-intensive technology, it generates more employment opportunities over a long period of time.  capital- intensive plants enhance the skills and the efficiency of the workers as well as managers.learning by doing argument is very strong in the case of capital-intensive technology.29/01/2021

7. ConclusionIt is very clear from the above discussion is that both the techniques have advantages. Some people argue: Small is beautiful, while others argue: Large is beautiful. Hence the controversy: Which technique is to be chosen? Depends upon surroundings and availability of resources.Indeed, it is because of the conflict between employment and output, and between employment and savings in the choice of techniques, there is no ‘clear-cut’ answer.29/01/2021

8. THANKS28/01/2021