Prof. H. Yadav, HNLU, * DEVELOPMENT Prof. Hanumant Yadav HNLU, Raipur

Economic GrowthEconomic GrowthEconomic ProgressEconomic DevelopmentProf. H. Yadav, HNLU, *

Prof. H. Yadav, HNLU, *Economic GrowthGrowth in Economics is known as Economic Growth which indicates increase in production of goods and services in a country or a State. In the context of economy, economic growth indicates increase in national output or GNP or GDP. Economic growth has also been defined in terms of per capita increase in GNP or GDP. This is a better definition for two reasons, firstly it takes population growth under consideration; secondly it makes comparison easier.

Prof. H. Yadav, HNLU, *Economic GrowthAnother measurement of economic growth is : Per unit increase in output with same level of input.This is a productivity concept of economic growth which measures growth in terms of per worker production, per hectare production, total value of input to total output. This method is used to compare efficiency of production system or economy.

Prof. H. Yadav, HNLU, *Growth RateGrowth Rate or Economic Growth Rate indicates per annum increase in GDP or GNP or national output in a country. National Income is also defined in terms of total value of goods and services produced in a country in a year. It means National Income is represented by GNP.So, Growth rates indicates per annum increase of National Income of a country.

Prof. H. Yadav, HNLU, *Economic ProgressEconomic progress indicates increase in the stock of physical assets and capital goods. Increase in the number of Buildings, Dams, Roads, Railways, vehicles, Factories, machines, etc.The economic history of countries have shown that in the past Economic growth and economic progress have taken place without Government intervention and initiatives. .

Prof. H. Yadav, HNLU, *Economic DevelopmentDevelopment indicates increase in level of living along with increase in output. Per capita increase of output as well as per capita increase in consumption is better indicator of Development. The Economic development includes both economic growth and economic progress. Thus it is a misconception that economic growth and development have same meaning so can be used interchangeably.

Prof. H. Yadav, HNLU, *Growth and DevelopmentEconomic growth is easily quantifiable growth of national product, growth of savings and investment. Development encompasses a wide range of ideas from the economic growth, to better/just distribution, stability in social life. Thus development includes improvement in quality of life.

Prof. H. Yadav, HNLU, *Distinct Features of Economic DevelopmentDevelopment indicates increase in per capita production as well as per capita consumption. So development includes upliftment of weaker sections of the society,I.e. scheduled Castes, scheduled tribes, unorganized agriculture labour, rural artisans, etc. Thus development leads to poverty alleviation in a country. Development is defined economic growth with social justice or distributive justice. It means that the underprivileged also get share of economic growth or increased GNP/GDP.

Prof. H. Yadav, HNLU, * Distinct Features of Development3. Economic planning is also necessary for development. 4. Plans are prepared and implemented under the directions of State. It indicates Government involvement is necessary for the development. .5. Development also includes legal provisions and regulatory frame work to check the exploitation of underprivileged, to provide gainful employment to them and raise their standard of living.

Prof. H. Yadav, HNLU, *Distinct Features of Economic Development Development requires establishment of institutions to meet the growth needs of different sectors, e.g. In India NABARD in agriculture sector, IFC in Industrial sector, SISI and SIDBI for promotion of small Industries. 7. Development requires Government initiatives for development of infra-structure and capital market. Conservation of environment is one of the component of development.

Prof. H. Yadav, HNLU, *Development Indicators1. High per capita Income ------------------------------------------------------Country Per Capita GNP US$I - Low Income $ 875 or lees 2- Lower Middle Income $ 876 - 3465 3- Upper Middle Income $ 3466 - 10725 4- High Income $ 10726 & above------------------------------------------------------------------------------------Source : World Bank/UNDP, 2005

Prof. H. Yadav, HNLU, *Development IndicatorsHigh level of living : High Per capita consumption of A) Household items: food, clothing, housing B) Industrial items: Per capita consumption of electricity, steel, etc.Lower contribution of Agriculture sector to GDP and low dependency for employment : ( Percent contribution) Industrially developed countries are known as developed countries, such as USA, UK, Japan, Germany, France, etc.

Prof. H. Yadav, HNLU, *Development Indicators4. Low Poverty Ratio : Small size of Population below Poverty line. ( Zero ratio) 5. High Rate of Capital Formation :High Life Expectancy 7. Developed Infrastructure : Transport and communication facilities, Financial institutions, Technical Training facilities ( units per 100 sq.km / per lakh population) Developed Health facilities : It leads to Low Infant Mortality Rate, Low Mother Mortality Rate

Prof. H. Yadav, HNLU, *Development Indicators9. High literacy rate particularly female literacy rateExport of Finished and value added goodsLow Inequality of Income and Wealth :

Development EconomicsDevelopment Economics studies models, theories and problem of economic development.

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Prof. H. Yadav, HNLU, *Four Wheels of Economic Development

Human Resources :Natural ResourcesCapital formationTechnology and entrepreneurship

Prof. H. Yadav, HNLU, *Wheels of DevelopmentHuman Resources : a) Size of labour force b) Education c) SkillNatural Resources : a) Energy b) Soil c) minerals d) ClimateCapital formation : a) Plant and machinery b) Infrastructure facilities Technology and Entrepreneurship : a) Technical know how b) managerial know how c) Innovation and initiative to launch enterprise

Prof. H. Yadav, HNLU, *Capital formationSavings = Income - Consumption INVESTMENT = part of savings used for earning income a) Interest : Deposit in banks, purchase of bonds, b) Dividends : purchase of shares PRODUCER : Mobilization of funds by issuing bonds, shares, and borrowing from financial institutions)Capital formation : Purchase of Plant & machinery, building, equipments, etc.

Prof. H. Yadav, HNLU, *Development : Inhibiting factors/Obstacles Vicious Circle of PovertyOver-PopulationInflationary trendPoor governance / corruptionPoor infrastructureShortage of skilled mkanpower

Development : inhibiting factors/obstacles Low savings and investment Undeveloped capital marked and low rate of capital formationOld Technology Lack of entrepreneurship Traditional outlook and castecisim Prof. H. Yadav, HNLU, *

DEVELOPMENTISSUES & CHALLENGES Prof. H. Yadav, HNLU, *

Development :Issues & ChallengesHow to achieve double digit growthHow to achieve inclusive growthHow to achieve sustainable growthHow to control inflation Good Governance Participatory growth Prof. H. Yadav, HNLU, *

Prof. H. Yadav, HNLU, *Features of UnderdevelopmentA) Economic FeaturesB) Non-Economic Features

Prof. H. Yadav, HNLU, *ECONOMIC FEATURES of Underdevelopment-----------------------------------------------------------------------------------------------Country Per Capita GNP US$Low per Capita GNP / GNI ------------------------------------------------------------------------------------I - Low Income $ 875 or less 2- Lower Middle Income $ 876- 3465 3- Upper Middle Income $ 3466- 10725 4- High Income $ 10726 & above------------------------------------------------------------------------------------

Prof. H. Yadav, HNLU, *Economic features

2 Significant size of Population below Poverty line3. Over-dependency on Agriculture sector : A) Disguised Unemployment B) Zero Marginal Productivity4. Heavy Population pressure

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Low Rate of Capital Formation Inequality of Income and Wealth7. Underutilization of ResourcesLack of EntrepreneurshipExport of Raw material and MineralsTechnological backwardness

Prof. H. Yadav, HNLU, *Economic Features 11. Poor Infrastructure a) Poor Transport and Communication facilities b) Poor Banking facilities c) Poor Technological and Professional Education and Training Facilities

Prof. H. Yadav, HNLU, *Non-Economic Features1. Low Life Expectancy2. High Infant Mortality Rate 3. High Mother Mortality Rate 4. High Rate Illiteracy particularly among female

Prof. H. Yadav, HNLU, *Non-Economic FeaturesTraditional Outlook Casteism and RegionalismLow status of women

DEVELOPMENT SCHEMESRural Development SchemesPoverty Alleviation SchemesEmployment Generation Schemes Prof. H. Yadav, HNLU, *

Rural Development ProgrammesIntegrated Rural Development Programme (IRDP)Pradhan Mantri Gramodoya Yojna (PMGY)Bharat Nirman Yojna

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Integrated Rural Development Program (IRDP) Prof. H. Yadav, HNLU, *

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