ABSTRACT
The early development economists, e.g. Lange, Lewis and Nurkse, regarded the lack of capital as the fundamental problem of development. Thus, accumulation of capital occupies a central position in the process of economic growth. The process of capital accumulation entails three steps. First, the volume of real savings must increase. According to Arthur Lewis, the crux of the development problem was to raise the proportion of national income saved from 4–5 per cent to 12–15 per cent, so that additional resources became available for investment. Therefore, the second step was to channel savings to investors and the final stage in the process of capital accumulation was the act of productive investment.
