DETERMINANTS OF ECONOMIC DEVELOPMENT

WHAT IS ECONOMIC DEVELOPMENT ? Economic development is the increase in the standard of living in a nation's population with sustained growth from a simple, low-income economy to a modern, high-income economy. Its scope includes the process and policies by which a nation improves the economic, political, and social well-being of its people

WHAT IS ECONOMIC DEVELOPMENT Economic development is a broad concept. Economic development is qualitative concept . it include increase in economic welfare along with increase in per capita income.it concern with equitable distribution of income and ensure good growth with justice Economic development term is generally used to indicate economic progress of underdeveloped countries .

DETERMINANTS OF ECONOMIC DEVELOPMENT ECONOMIC DETERMINANTS NON-ECONOMIC DETERMINANTS .

ECONOMIC DETERMINANTS ARE: NATURAL RESOURCES  LABOUR OR HUMAN RESOURCES  STRUCTURAL CHANGE  SIZE OF MARKET  CAPITAL FORMATION  CAPITAL OUTPUT RATIO  SCIENTIFIC AND TECHNICAL PROGRESS  FINANCIAL STABILITY  DEVELPOMENT PLANNING  ABLE ENTREPRENEUR AND ORGANISATION  INTERNATIONAL DETERMINANTS .

NON ECONOMIC DETERMINANTS ARE: DESIRE FOR DEVELOPMENT  SPREAD OF EDUCATION AND SKILL FORMATION  POLITICAL DETERMINANTS  SOCIAL DETERMINANTS  FREEDOM FROM CORRUPTION  LAW AND ORDER SITUATION .

Natural resource determine the limit of economic development of a nation . in a natural form.NATURAL RESOURCES: Natural resources occur naturally within environment that exist relatively undisturbed by mankind.

abundance of labour is a source of economic capital.LABOUR AND HUMAN RESOURCES: In certain less developed countries. Its appropriate utilization facilitates capital formation and economic growth .

Secondary-industrial production. Country s economic generally divided into three sector Primary. and the like Tertiary-trade. etc. banking. etc. service.agriculture. forestry.‡ STRUCTURAL CHANGE: Structural change refer to change in occupational structure. It is essential for economic development that more and more people are engaged in secondary and tertiary activities .

‡ Capital formation capital formation means investment in industrial building.P is channalised towards capital formation .D.machines.It is essential for economic development that nearly 30% of the G.means of transport and the like.

‡ ‡ A low ratio of capital output ratio is conducive to economic development . . Capital output ratio=K:Y ‡ K=capital ‡ Y=output It depend upon several factors such as capital efficiency.etc. type of investment.CAPITAL OUTPUT RATIO Capital output ratio implies the amount of capital needed to produce one unit of output.

Scientific and technical progress Scientific and technical development is equally important for economic development. Economic development is depend on the use of innovation techniques by the entrepreneurs of a nation . It is the principal determinant of growth in Japan and Germany.

Financial stability Financial stability implies the existence of an efficient and organized banking system in the country economic development of a country also depend on financial stability. it is essential to control the price rise because economic development generally lead to rise in price .

they set up industrial establishment.Able entrepreneur and organisation Economic development depend upon its entrepreneur ability as well as organisational efficiency. . It is required to economic development that number of entrepreneur increase.

Planning ensure the proper utilisation of resources with a view to stimulating the process of growth .DEVELOPMENT PLANNING ‡ Development planning mean that the central planning authority plans for the achievement of certain targets within the stipulated period time.

technical know how.INTERNATIONAL DETERMINANTS International determinants such as foreign capital. international trade and investment plan a significant role in economic development mainly in less developed countries .

DESIRE FOR DEVELOPMENT Development is impossible if it does not take place in the minds of men if no desire for development no account of development os possible .

so.education play pioneer role for the creation of human capital and social progress whish in turn determine the progress .EDUCATION AND SKILL FORMATION Investment in education is not only highly productive but also yields increasing returns.

An efficient. honest and welfare oriented administration is main determinant of national development.POLITICAL DETERMINANTS Economic development of a country is very much influenced by its political environment. The political leaders should be dedicated and devoted to the cause of economic development .

law of inheritance etc.SOCIAL DETERMINANTS Economic development is closely associated with social changes. Social institution like caste system. have their powerful impact on economic development . joint family system.

FREEDOM FROM CORRUPTION On the account of corruption at all level. Corruption is the barrier in the way of economic development . there is tax evasion on a large scale in underdeveloped countries.

LAW AND ORDER SITUATION Atmosphere of peace and proper law and order in the country are essential of its economic development.domestic and foreign entrepreneurs will increase investment if there is peaceful atmosphere .

political as well as social factors. economic development is not determined by any single factor. It depends upon various economic. It is only through the right co-ordination between these factors and the will to developed that the process of development can be accelerated .In short.

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