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ECONOMICS OF DEVELOPMENT
»Arindam Chaudhari
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ECONOMICS OF DEVELOPMENT
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DIFFERENCE BETWEEN ECONOMIC GROWTH &
DEVELOPMENT
• Economic growth- refers to increases over time in a country’s real output
of goods and service or more appropriately product per capita.
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DIFFERENCE BETWEEN ECONOMIC GROWTH &
DEVELOPMENT
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CHARACTERISTICS OF INDIAN ECONOMY
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CHARACTERISTICS OF INDIAN ECONOMY
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CHARACTERISTICS OF INDIAN
ECONOMY
• Poor quality of Indian working population: compared to advanced
countries the poor quality of Indian labor is due to the reason that the
laborers of India are poor and under fed.
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CHARACTERISTICS OF INDIAN
ECONOMY
• Existence of Dualistic or Dual sector: In India both ancient and
modern sectors exist side by side. We find ancient wooden ploughs as well
as the modern tractors. Similarly in industries old and obsolete machines
and modern sophisticated machines.
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MAJOR ISSUES OF DEVELOPMENT
• Poverty is not only acute but also chronic. At the same time ,
there exist un utilised natural resources.
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MAJOR ISSUES OF DEVELOPMENT
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MAJOR ISSUES OF DEVELOPMENT
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MAJOR ISSUES OF DEVELOPMENT
The following are the major development issues in India.
High proportion of people below the poverty line & Low level of
productive efficiency due to inadequate nutrition and malnutrition. :
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DETERMINANTS OF ECONOMIC DEVELOPMENT
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MAJOR ISSUES OF ECONOMIC DEVELOPMENT
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MAJOR ISSUES OF ECONOMIC DEVELOPMENT
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DETERMINANTS OF ECONOMIC DEVELOPMENT
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DETERMINANTS OF ECONOMIC DEVELOPMENT
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INDIA AS A DEVELOPING ECONOMY
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INDIA AS A DEVELOPING ECONOMY
Strategy and planning in India – In 1951 economic
planning was adopted as an instrument of
development.
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INDIA AS A DEVELOPING ECONOMY
SECTOR WISE ANALYSIS
PRIMARY SECTOR
SECONDARY SECTOR
TERTIARY SECTOR
1850-1950 – Indian economy was stagnant for 100 years, but now
the economy is progressing also with the recent LPG of Indian
economy.
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CONTRIBUTION OF AGRICULTURE TO INDIAN ECONOMY
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CONTRIBUTIONS OF SECONDARY SECTOR
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Contributions of secondary sector
•Annual growth rate of Industrial Production
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CURRENT ECONOMIC SCENARIO
It was announced recently that India would
be achieving a GDP growth of 9.2% against
project figure of 8.5%,all members of ruling
party at Delhi complemented each other.
this was possible due to a very good
performance of manufacturing, IT,
pharmaceutical and service sector.
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INFLATION
• Inflation refers to a situation when there is a general rise in prices
and a corresponding fall in value of money.
• Hyper inflation: 1000% PA . Low purchasing power, real wages fall and
inequalities increases – serious distortions – overall economic condition.
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CAUSES OF INFLATION
The basic cause of inflation normally occurs, when aggregate
demand for output tends to be excessive in relative to the
supply
of output.
1.CHANGES IN MONEY SUPPLY
CAUSES OF
INFLATIONS
3. Changes in business & consumer expenditure
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CAUSES OF INFLATION
• 1. Changes in money supply:
• (a) Deficit financing
• (b) Expansion of credit
• (c ) Increase in Govt Expenditure on large development
• project.
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CAUSES OF INFLATION
• 3. Changes in Business and Consumer Expenditure :
consumer spends more on goods & services the
demand also increase business activity.
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CAUSES OF INFLATION
Inflation may occur due to the following different causes:
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CONTROL ON INFLATION
• 1. DIRECT MEASURES – control on prices and rationing
• of scarce goods. Ceiling on certain goods and should
• not allow to it to rise further.
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CONTROL ON INFLATION
3. MONETARY MEASURES: RBI – Open market operations, & Bank rate policy.
.
4. WAGE CONTROL : money wage rate rises faster than the productivity of
labor. However wage controls difficult to implement.
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PRICE INDICES
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PRICE INDICES
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TYPES OF CONSUMER PRICE INDEX
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BUSINESS CYCLE
• A business cycle can be defined as wavelike
fluctuations of business activity characterized by
recurring phases of expansion and contraction in
periods varying from three to four years.
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FEATURES OF BUSINESS CYCLE
1. Recurring Fluctuations
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PHASES OF BUSINESS CYCLES
• Prosperity phase
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PHASES OF BUSINESS CYCLES
• RECESSIONARY PHASE
• The prosperity comes to end when the forces favoring expansion
become progressively weak.
• In fact profit inflation and over optimism which increase the tempo,
carry with them the seeds of self destruction.
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TYPES OR TIMINGS OF INDICATORS
There are three timings in which these indicators lead to changes
in the business cycle namely:
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