2. BASIC IDEA :- The idea behind this theory is this that a
big push or a big and comprehensive investment
package can be helpful to bring economic
development. In other words, a certain minimum
amount of resources must be devoted for
developmental programs, if the success of programs is
required.

3. This theory is of the view that through 'Bit by Bit'
allocation no economy can move on the path of
economic development, rather a specific amount of
investment is considered something necessary for
economic development.
Therefore, if so many mutually supporting industries
which depend upon each other are started the
economies of scale will be reaped. Such external
economies which are attained through specific
amount of investment will become helpful for
economic development.

4. Prof. Rodan mentioned three kinds of indivisibilities
which are essential to achieve the economic
development :-
1) INDIVISIBILITY IN PRODUCTION FUNCTION
2) INDIVISIBILITY OF DEMAND
3) INDIVISIBILITY OF SUPPLY OF SAVINGS

5. Indivisibilities in the production function may be with
respect to any of the following:
INPUTS
OUTPUT
PROCESS OF PRODUCTION
Law of increasing returns play an important role in
reducing the capital output ratio.
INDIVISIBILITY
INCREASING
RETURNS

6. FOR EG. :- SOCIAL OVERHEAD CAPITAL
Requires huge investment.
Better utilization will bring down the cost and
make them profitable and useful.
Cannot be imported.
They all contribute to development indirectly.
They last for a longer period of time.
UNDERDEVELOPED COUNTRIES :- Social overhead
capital requires huge investment and
underdeveloped countries will have to invest more of
their income.

7. The SOC is attached with the following indivisibilities:-
i. INDIVISIBILITY OF TIME
ii. INDIVISIBILITY OF DURABILITY
iii. INDIVSIBILITY OF LONG GESTATION PERIOD
iv. INDIVISIBILITY OF INDUSTRY MIX OF DIFFERENT
KINDS OF PUBLIC UTILITIES.
SOC must be developed immediately. Isolated
facilities will not be beneficial
High initial investment in SOC is necessary in order
to pave the way for quick yielding directly
productive investments.

8. Two main characteristics of underdeveloped countries :-
a) Small size of market
b) Low per capita income
Investment in a single industry can be risky as demand is
limited in UDC’s
According to Rodan, investment should be made in
interdependent industries. This reduces the risk as
market will be extended.
REDUCES THE
PURCHASING
POWER OF PEOPLE

10. A specific amount of investment can be made in the
presence of specific savings
But in case of UDCs because of lower incomes the
savings remain low.
Therefore, when incomes increase due to increase in
investment the MPS must be greater than APS.

11. Realistic assumptions of indivisibilities.
Examines the path towards equilibrium and not
merely conditions at the point of equilibrium.
UDC’s realize greater economic from world trade
independently of home investment. External
economies are completely ignored.
Neglects investment in the agricultural sector.

12. SOC-highly expensive, has high capital output ratio
and a very long gestation period. This makes the task
of developing UDC’s more difficult and longer.
Adler’s statistical analysis reveals that low
investment pays off well in the form of additional
output.
Big push is a kind of ‘prescription’ for launching
UDC’s on the path of development. It is not a
historical explanation of how development takes
place.