UPSC Prelims 2015 Q90: Indian Economy – Infrastructure & Industry
The substitution of steel for wooden ploughs in agricultural production is an example of
- (a) labour - augmenting technological progress
- (b) capital - augmenting technological progress
- (c) capital - reducing technological progress
- (d) None of the above
Answer: (b) capital - augmenting technological progress
Explanation
Steel ploughs in place of wooden ploughs
A plough is a tool, so it is capital.
A steel plough does more work than a wooden one.
So each unit of capital becomes more productive: this is capital-augmenting technological progress.
| Type of progress | Meaning | Example |
|---|---|---|
| Labour-augmenting | Raises the productivity of workers | Education, training, better health |
| Capital-augmenting | Raises the productivity of capital (tools, machines) | Steel plough for wooden plough |
| Neutral | Raises both equally | A general improvement in methods |
The options checked:
| Option | Verdict |
|---|---|
| (a) Labour-augmenting technological progress | Incorrect |
| (b) Capital-augmenting technological progress | Correct |
| (c) Capital-reducing technological progress | Incorrect |
| (d) None of the above | Incorrect |
Answer: (b) capital-augmenting technological progress.
Why each option is right or wrong
- (a) Incorrect. Labour-augmenting progress improves workers' skills, not their tools.
- (b) CORRECT. A better plough is better capital: capital-augmenting technological progress.
- (c) Incorrect. Nothing here reduces capital; the capital becomes more productive.
- (d) Incorrect. Option (b) fits, so 'None of the above' is wrong.
Key point
Capital-augmenting progress improves tools and machines (steel plough); labour-augmenting progress improves workers (education, skills).
Remember
Better tool = capital-augmenting progress.
Common mistakes
- Thinking a plough helps the labourer, so it must be labour-augmenting.
- Not seeing that a plough is a capital good.
- Choosing 'None of the above' when the terms look unfamiliar.
Exam tip
Ask what was improved: the worker (labour) or the tool (capital)?
Sources
- Michael Todaro and Stephen Smith — Economic Development (Classic Theories of Economic Growth: technological progress)
- NCERT Class XII — Introductory Microeconomics, Ch 3 (Production and Costs)