Subject(s): Features of Under developed economics -- Process of economic development: Supply of natural resources, Capital formation, Technical progress, Growth of population, formation of human capital -- Problems of capital formation in poor countries : Capital in underdeveloped economies, Vicious circle of poverty -- Size of the market and the inducement to invest : domestic market in poor countries, Salesmanship and advertisement, Population, Geographical area, Cost of transport and trade barriers , Level of productivity -- Theory of balanced and unbalanced growth : Nurkse's explosion of the theory, balance between consumer goods and industries and the social overhead capital, Big push theory , balanced growth theory -- path of balanced growth and the rate of economic development : in Agriculture, Forced savings and deficit financing -- Critical minimum effort theory of economic development : Increase in per capita income and the induced increase in population growth rate -- Disguised unemployment and capital formation : Surplus labour, Seasonal unemployment , Open employment, Capital formation and savings -- Demonstration effect on consumption : Demonstration effect and the new theory of consumption, balance of payment -- International transfer of capital: Direct business investment, international loans and grants, Bilateral and multilateral aid, foreign aid -- Commercial policy and cpaital formation : infant industry argument for Tariff protection, tariff protection and capital supply , Rational of luxury import restrictions -- Capital formation and public policy : Automatic mechanism to ensure voluntary savings , Fiscal policy and capital formation, Compulsory savings and forced loans, Public investments in Social capital projects