The Effect of Investment Subsidy in a Dualistic Economy


India has been posting high growth figures on one hand, while on the other; it is recording an increase in unemployment rate. The growth of the country is not being able to absorb the growing labour force. In this paper, we develop a two-sector macro-economic model that serves us two purposes. First, it establishes the link between industry and agriculture and secondly it analyses how the provision of investment subsidy to the industrial sector will affect output and employment levels in the two sectors. Finally it charts out a sustainable development strategy for the country

Keywords: Agriculture, Industry, Labour-displacing Technological Progress

Unique Article ID: IJDES-125

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