Economic Growth & Economic Development

By : Radhika Gohel

Introduction

• Attention of Economists• Definition• Different Economists convey different meanings• Some Economists says no need to frame its precise

definition while others….• Thus growth & deve. are used interchangeably • We also feel the same that to avoid ambiguity it’s

better to identify economic growth in terms of some measurable criteria.

Cont.

• Meaning– Economic growth refers to increase over the time

in a country’s real output of goods & services. [national income, per capita income & social welfare]

– Historically E.G accompanied/measured by Greater Industrialization & Commercialization

– E.G is not an end in itself. It is rather a means to an end.

Cont.

• Determinants of Economic Growth:– GDP– GNP– Per capita income– Some of the times population grows faster then the

growth rate– So that the most appropriate approach to measure

E.G is in terms of a rise in per capita net domestic product

Economic Development

• Till 1960s, it was synonym of economic growth

• It is taken to mean growth + progressive changes in crucial variables

• There are qualitative dimensions which missing..• According to Mahbub ul Haq….

– We are taught to take care of GNP bcoz it would take care of poverty but…

– Let us take care about the content of GNP more than its rate of increase.

Cont.

• The Traditional Approach:– This approach defines development strictly in Economic

terms

i. Sustained growth rate of GDP of 5 to 7% or more

ii. Structural transformation

• The New View Of Economic Development: Having realized that about 40% of the world’s

population have not at all benefited from the economic growth during 1950 & ‘60s the economists called for the rejection of narrow definition of economic development.

Cont.

During 1970 they redefined the

concept of economic development in terms of the reduction or elimination of poverty , inequality & unemployment in the context of growing economy.

• The new view of development includes – Material in welfare

– Eradication of mass poverty

– Literacy rates

– Eradication of Disease & early deaths rates

– Unemployment and Inequality

Comparing V/s