CONCEPT OF ECONOMIC DEVELOPMENT

According to Prof.Meier and Baldwin

“ Economic Development is a process whereby an economy’s real
national income increases over a long period of time”
Evaluation of Concept
Ancient Economists
1. Increase in per Capita Income
Middle Age

1. +
2. Structural Changes
3. Human Capital Accumulation
4. Increasing return to scale
5. Investment
Modern Economists
1. 1-5 = +
6. Three Core Values
a. Sustenance (BNA)
b. Self Esteem
c. Freedom of Servitude (Internal+ External)
Crux
Economy Development is a process consisting of a long chain of
inter-related changes in fundamental factors of supply and in the
structure of demand, leading to a rise in the net national product
of a country in the long run.
Explanation
1. PROCESS - variation - Production
(a) Supply Sector. New Technology, rate of investment, new
resources, Efficiency
(b) Demand. Increase in income, Tastes,
Varieties

2. REDUCTION IN POVERTY : Must reduce

3. Higher Rate of Development

4. LONG PERIOD : 20 TO 25 YEARS in all sectors

5. BETTER ORGANIZATION : May not be any hindrance

6. COOPERATION OF PEOPLE : Harmony

7. PROVISION OF BASIC NECESSITIES (BNA)

Economic Growth

It means the capacity of national economy, whose initial economic

conditions have been more or Less static for a large time, to generate
and sustain an annual increase in GNP/GDP (at rate of 5% annually).