grpwth and developmentindicator of dvelopment
- 1. INDICATOR OF GROWTH AND DEVELOPMENT cGrowtand Development
- 2. INTRODUCTION After the II world war the race of achieving Economic Development started with in all the nations.This was period a around 1939-1944. After this the terms Economic Growth and Economic Development are the term became popular The race of Economic Development was only for Developing countries. • The developing nations started focusing on improvement of their Per capita income, increasing their Standard of living, reduction in poverty and unemployment, increase in literacy ,etc. The aim of developed nations where to maintain their living standard, per-capita income. If we think this way, maintaining economic growth is the aim of developed Countries and attaining speedy economic development is the prime requirement of developing Countries
- 3. After 2ndWorld war (1939-1944) Term(Popular) Eco. Growth and Eco. Development Eco Development was for Both Developed and developing nations Aims of developing nations: Reduce poverty,increase PCI,etc Aims of Developed Nations: Maintaing PCI and Standard of Living Developing nation -- Eco Devlopment Developed nation -- Eco growth
- 5. Economic Growth Economic Growth means increase in the output of a economy. In Economic growth, there is a continuous increase in the real national income and the real per capita income. Such growth is possible due to the increase in the supply of factors of production like land, capital, labour and entrepreneurial ability and increase in their productivity In short, it can be said that, the supply of factors of production, their availability, productivity and efficiency tend to increase leading to a continuous increase in real national income and real per capita income. Thus Economic growth is a quantitative changes It also helps in a comparative evaluation of economies of two countries.
- 6. Definition of Economic Growth "Economic Growth refers to growth rate of national income or rise in total quantum of goods and services." – Prof. Hansen Quantum = Quantity "A long term increase in capacity of a country to supply diverse economic goods to its people is known as economic growth." – Simon Kuznets
- 7. Limitation of Economic Growth Economic Growth takes into consideration only the quantitative change. Quantitative change means Increase in amount of National income and Per Capita Income, It only focuses on increase in rate and amount of National income, Per Capita Income Employment, etc In Economic Growth, there is a rise in national income and per capita income but institutional and psychological factors remain as before. Iinstitutional and psychological factors means Peace of mind , Mental state etc Example If a person want to get rich and if he works for 24 hr he will achieve his target too of getting rich but working 24*7 is not practically possible Rest, Peace of mind etc are important for person so this are the institutional and psychological factors and it is been ignored by this theory
- 8. The concept of economic growth is narrow and depicts only the rise in the rate and extent of output. The concept of economic growth is not of much use in understanding the welfare of the people.
- 9. Economic Development Even in Economic Development there is an increase in the real national income and real per capita income but economic development is not just about quantitative chances but also about qualitative chances. Development is different from growth. It is a multi dimensional process. Hence the term economic development has a very wide meaning which includes economic growth, economic welfare and economic progress. Along with economic progress, progress takes place in the society too. The contribution of agriculture as percentage of the total national income decreases. The contribution of industry and service sector increases. Modern technology is being implemented due to which time and money is saved. New seeds are innovated as a result the structure of institutions pertaining to production and distribution chances. Poverty unemployment and inequalities fall due to such systematic chances.Along with economic procress, procress takes place in the society too.
- 10. What happens due to Economic Development Along with economic progress, progress takes place in the society too. The contribution of agriculture as percentage of the total national income decreases. The contribution of industry and service sector increases. Modern technology is being implemented due to which time and money is saved. New seeds are innovated as a result the structure of institutions pertaining to production and distribution chances. Poverty unemployment and inequalities fall due to such systematic changes.Along with economic progress, progress takes place in the society too.
- 11. Definition of Economic Development "Economic Development is a multidimensional process." MichaelTodaro "Economic Development is such a process in which there is no increase in the population living below the poverty line, the distribution of income does not further increase the inequalities and there is a continuous rise in the real per capita income of the country for a long period of time." G.M. Meier "Economic Development is a process which increases the factors of production and create change in the technique of production due to which per capita income continuously increases and the standard of living continuously rises irrespective of whether population remains constant or increases." Machlup
- 12. Characteristics of Economic Development 1. Economic Development is a continuous process : 1. Economic Development is a slow but strong process in a predetermined order and direction. In any country, development is a process which is easy to start but difficult to maintain.The process of development is usually fast initially but slows down over a period of time. 2. Quantitative and qualitative chance takes place : 1. In Economic Development, output increases which is quantitative and due to research, the quality of the product improves which is qualitative. But there is more of qualitative improvement. 3. Change in demand : There is rise in the income of the people due to development which changes their taste. In the initial stages of development, the demand for basic or primary goods rise but subsequently there is a rise in the demand for comforts and luxury goods.
- 13. 4. Labour become more dynamic : Development leads to increase in education of labour which makes him more dynamic. 5. Increases capital formation : Development leads to increase in demand for different commodities. New enterprises come forward due to which the rate of investment and capital formation increase enormously. 6. Change in technology : 1.There is a shift in dependence from fire and water based technology to coal & iron based technology which results in faster development.
- 14. Trick to remember (CCD Q TCS) 1. C-Economic Development is a continuous process 2. C- Increases capital formation 3. D- Labour become more dynamic 4. Q-Quantitative and qualitative change takes place 5. T-Change in technologygy 6. C-Change in demand 7. S- Self Motivating
- 15. Limitations of Economic Development Economic development indicates the progress of a nation. It show the economic scenario but in real sense, it cannot discuss the human development. It cannot become the index of human progress. Economic development cannot be measured as economic growth. It is a very difficult to measure economic development. Economic development includes those changes that have happened in the society. It is very difficult to derive a measurement for this. When economic development takes place, the standard of living of people improves. Thouch economic development is taking place in India today, there is not much improvement in the standard of living of the people and therefore we cannot say that economic development means improvement in standard of living.
- 16. Difference between Economic Development and Economic Growth Economic Development Economic Growth Economic Development is a process. Economic growth is an occurrence. In Economic development quantitative and qualitative chances take place In Economic growth quantitative chance occur. In Economic development the question of utilisation of unutilised resources arises. In Economic growth, emphasis is on the distribution of available resources.
- 18. The concept of Economic development is related to developing countries Economic growth is related to developed countries Economic development is difficult to measure It is easy to measure economic growth. The concept of development is broad. The concept of growth is narrow. Economic development is related to distribution alonc with per capita income. Economic growth is only related to increase in per capita income Economic development is a slow process Economic growth is a rapid process Economic development is not possible without economic growth. .Economic growth is possible without economic development.