1.

Economic Growth and Economic Development (10+2)

I. Answer the following questions in about 40 lines each:

1Q:- Explain the concepts of Economic growth and development.

What are their differences?

1A:- In initial stage the term growth and development were used
Synonymously. In the process of economic development some economists
like Hicks and Schumpeter identified a slight difference between them.
Economic growth: Economic growth refers to an increase a country’s real
output of goods and services
Economic Development: It refers not only to economic growth but also
progressive changes in the socio-economic structure of country.

Differences between economic growth and development

Economic Growth Economic Development

1. Increase output of goods and
services in a year.
2. It is a single dimensional.
3. It is quantitative
4. There is no government
interference.
5. Take care of growth and poverty
eliminates.
6. It is a narrow sense.
7. It is short-term process.
8. It concerns to developed
countries.
9. It concerns economic changes.
10.Eg. Physical growth of a man.
1. Overall progress of the economy.
2. It is a multi-dimensional.
3. It is qualitative and quantitative.
4. Government interference is
required.
5. Take care of poverty and growth
attains.
6. It is wider sense.
7. It is long-term process.
8. It concerns to developing countries.
9. It concerns social changes.
10.Eg. Physical and mental growth of
a man.
2Q:- Explain the objectives of economic development?
2A: Economic development refers not only to economic growth but
also about progressive changes in the socio-economic structure of a
country.

Objectives of Economic Development:

1. High rate of growth: The developing economies like India and China
are trying to achieve high growth rate of economy. The Indian five
year plans gave importance to high growth rate of national income.
2. Economic Self Reliance: Self-reliance means to stand on one’s own
legs. At beginning of planning India depended more on foreign
countries for food, capital goods and infrastructure. Excessive
dependence on foreign sector may leads to economic colonialism.
3. Social Justice: Social justice means equitable distribution of income
and wealth of the country. India highlights four aspects of social
justice. They are:
• Democratic principles in the political structure.
• Social and economic equity.
• Decentralization of economic power.
• Development of BC’s, SC’s and ST’s.
4. Economic Stability: Economic stability is ensured when a non-
inflationary full employment growth occurs in a country the broad
objective of economic development has been a non-inflationary self-
reliance growth with social justice.
5. Inclusive Growth: The concept of inclusive growth referred by world
bank. It refers to pace and the pattern of economic growth, it means
obtain growth exclude population growth.
6. Modernization: Before independence Indian economy was backward,
after independence the planners and policy makers tried to modernize
the economy by changing structural and institutional set up of the
country. It improves standard of living of the people, increase
industrial output and improve national income.
 7. Sustainable Development: The Brundtland Report defined it as
“meeting the needs of the present generation without compromising the
needs of future generations”. It aims at accelerating economic
development by increasing the stock of environmental, physical and
human capital.
Inclusive Growth: The concept of inclusive growth referred by world
bank. It refers to pace and pattern of economic growth exclude
population growth.

3Q: Examine the indicators of Economic development.

3A: Economic Development refers not only to economic growth but
also about progressive changes in the social economic structure of a
country.
Indicators of economic development:
1. Real National Income: Higher real national income is the index of
higher level of economic development and vice versa. On the basis of
real national income estimation countries are classified into developed
and developing.
2. PQLI: (Physical Quantity of Life Index) This is a non-income indicator
of economic development it can be measured by taking following three
factors:
• Life expiatory.
• Infant mortality rate.
• Literacy
High PQLI leads to increase the facilities of food, health, education and
Sanitation
3. HDI: (Human Development Index) HDI is a indicator of economic
development. It is a statistical tool used to measure countries overall
achievement by taking three factors
• Income for better living
• Education
• Life expectancy
4. GDI: (Gender Related Development Index) GDI is a composite
indicator which measures the average achievement of population in the
same dimensions as the HDI it uses same variables as HDI.
5. SPI: (Social Progress Index) SPI measures the provision of social and
environmental of their country citizens. By taking 54 indicators, in the
areas of basic human needs, foundation of well-being and opportunity, it
is published by “The non-profit social progress imperative” and is based
on the writing of Amarthyasen, Douglass north and stiglitz.
6. GNP Per Capita: The increase in per capita real income of any country
shows an increase in economic development. The rate of increase in real
per capita income should be higher than the growth rate of population.
7. Welfare: According to Okun and Richardson, economic development is
“a sustained, secular improvement in material well-being, which we may
consider to be reflected in an increasing flow of goods and services”.
8. Social Indicators or Basic Needs: Basic needs focus on elimination of
poverty by providing basic human needs to the poor like food, water,
education, health etc. Basic needs lead to a higher level of productivity,
income and economic development.
9. GEM (Gender related Empowerment Measure): It focusses on
women’s political participation, economic participation and women’s
power over economic resources.
10. MPI (Multi-dimensional Poverty Index): It was introduced in 2010.
It designed to illustrate the many deprivations faced by the most severely
disadvantaged. The MPI requires a household to be deprived in multiple
indicators like nutrition, child mortality, access to information etc.