Definition of an Under Developed Economy:

According to prof . Ragnar Nurkse, “ under- developed countries are those which compared with the advanced countries are under equipped with capital in relation to their population and natural resources” As Nurkse himself points out “ Economic development has much to do with human endowments , social attitudes, political conditions and historical accidents. Capital is necessary but not a sufficient condition  of progress. Hence an economy will be considered under-developed:

a) If its per capita income is low.

b) If the natural resources and manpower in the country remain unutilized or underutilized on account of lack of economic development and

c) If it is possible to raise its level of national income and per capita income by properly utilizing its natural resources and manpower.