ECONOMIC

GROWTH AND
DEVELOPMENT 
TYBA Economics S 4
Semester 5 
Dr. Manisha Pimpalkhare 
 A quantitative rise in National Income and Per Capita
Income

First Objective of Nations... 1950s when most of the

underdeveloped countries got their independence.

WHAT IS A trickle down approach assumed that growth of National

EC ONOMIC Income will take care of all economic ills.... like poverty
and unemployment.
GR OWT H?
By 1970s, this was proved to be incorrect.

Many countries that registered satisfactory economic

growth, face the challenges of poverty, unemployment and
economic inequality. 
 Naional Income

Per Capita Income

I N D I C ATO R S Limitations-
OF
ECONOMIC
GROWTH  Purely quantitative 

Ignores composition of NI

Ignores distribution of NI
 A Broader and more desired outcome for any country

Requires deliberate policy efforts

Growth plus change

ECONOMIC Transcends the economic sphere to include social, political

DEVELOPMENT  and institutional changes that are progressive in nature.

Multidimensional concept

Ongoing Process- for developed countries too.

Inclusive and Sustainable Process

 “THE PROBLEM OF DEVELOPMENT MUST BE DEFINED
A S A S E L E C T I V E AT TA C K O N T H E W O R S T F O R M S O F
P O V E R T Y. D E V E L O P M E N T G O A L S M U S T B E D E F I N E D I N
TERMS OF PROGRESSIVE REDUCTION AND EVENTUAL
E L I M I N AT I O N O F M A L N U T R I T I O N , D I S E A S E ,
I L L I T E R A C Y, S Q U A L O R , U N E M P L O Y M E N T A N D
I N E Q U A L I T I E S . W E W E R E TA U G H T T O TA K E C A R E O F
O U R G N P B E C A U S E I T W O U L D TA K E C A R E O F P O V E R T Y.
L E T U S R E V E R S E T H I S A N D TA K E C A R E O F P O V E R T Y
B E C A U S E I T W I L L TA K E C A R E O F T H E G N P. I N O T H E R
W O R D S , L E T U S W O R RY A B O U T T H E C O N T E N T O F G N P
E V E N M O R E T H A N I T S R AT E S O F I N C R E A S E . ”
 • Human Development Index 
• The Human Development Index (HDI) is a
HOW statistic composite index of life expectancy,
TO MEASURE   education, and per capita income indicators, which
are used to rank countries into four tiers of
DEVELOPMENT human development. A country scores a higher HDI
when the lifespan is higher, the education level is
HDI  higher, and the gross national income GNI (PPP)
per capita is higher. It was developed by Pakistani
GDI  economist Mahbub ul Haq, with help from Gustav
Ranis of Yale University and Meghnad Desai of the
GEM London School of Economics, and was further used
to measure a country's development by
the United Nations Development Program
(UNDP)'s Human Development Report Office. 
 •The Human Development Index (HDI) is a tool developed
by the United Nations to measure and rank countries' levels
of social and economic development. The Human
Development Index (HDI) is a summary measure of
average achievement in key dimensions of human
development: a long and healthy life, being
knowledgeable and have a decent standard of living.
The HDI is the geometric mean of normalized indices for
each of the three dimensions. 
HDI  •Published on 4 November 2010 (and updated on 10 June
2011), the 2010 Human Development Report calculated the
HDI combining three dimensions:
•A long and healthy life: Life expectancy at birth
•Education index: Mean years of schooling and Expected
years of schooling
•A decent standard of living: GNI per capita (PPP US$)
                                                 GDI 
The Gender Related Development Index (GDI) is an index designed to
measure gender equality. GDI together with the Gender Empowerment
Measure (GEM) were introduced in 1995 in the Human Development
Report written by the United Nations Development Program. The aim of
these measurements was to add a gender-sensitive dimension to the
Human Development Index (HDI). The first measurement that they
created as a result was the Gender-related Development Index (GDI). The
GDI is defined as a "distribution-sensitive measure that accounts for
the human development impact of existing gender gaps in the three
components of the HDI" 
 GEM is a measure of inequalities between
men's and women's opportunities in a
country. It gives indicators to explain ways
in which the inequalities are associated with
GENDER three components of development: access
EMPOWERMENT to resources, employment and political
MEASURE participation.
 It is based on estimates of women's
relative economic income, participation in
high-paying positions with economic power,
and access to professional and
parliamentary positions
 • The GEM was designed to measure "whether women
and men are able to actively participate in economic and
political life and take part in decision-making" (UNDP,
1995, p. 73)(Klasen 257). 
• The GEM tends to be more agency focused (what
people are actually able to do) than well-being focused
(how people feel or fare in the grand scheme of things).
• The GEM is determined using three basic indicators:
MORE ON Proportion of seats held by women in national
GEM parliaments, percentage of women in economic 
decision making positions (incl. administrative,
managerial, professional and technical occupations) and
female share of income (earned incomes of males vs.
females).
• The GEM is thought to be a valuable policy instrument
because it allows certain dimensions that were
previously difficult to compare between countries to
come into international comparison.