ABSTRACT
This chapter considers the determinants in an underdeveloped economy—an economy with a significant and increasing volume of employment at a level of remuneration considerably below the average—of what might be called an optimal policy for investment. In particular the chapter reviews this question with reference to the geographical spread of newly-created employment. The chapter comprises a shortened version of a paper of the same title first published in Oxford Economic Papers, February 1962. The advantages of more happily situated industrial centers in a framework of extreme underdevelopment such as exists in India are manifold. The determination of a country like India to accelerate the increase and widen the scope of the public sector is to be welcomed. It should be noted, however, that if such a policy is to produce the best results in promoting a balanced and integrated society, the pricing policy in that sector will have to be appropriately formulated.
