Better Utilization of Existing Capital Equipment

It is generally seen that in the under developed countries factories are working below their installed capacity either for the lack of raw materials or of shortage of power or on account of inadequacy of complementary resources such as skilled and trained personnel or due to defective management . By removing these handicaps, fuller  use can be made of the existing capital equipment. By raising the level of productivity in the country, the level of per capita income, and hence the capacity to save, can be increased. Since the under developed countries suffer from scarcity of capital, it is only prudent that maximum possible use should be made of the existing capacity. In this way , the aggregate output in the country can be increased without increasing the stock of capital Japan provides a classical example of how a country can accelerate its economic growth and lif itself by its bootstraps