concept of economic development

8/7/2019 Concept of Economic Development

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Concept of Economic

Development


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Common Features

Low levels of living

Low levels of productivity

High rates of population growth and dependency

burdensHigh and rising rates of unemployment and

underemployment

Significant dependence on agricultural

production and primary product exportsDominance, dependence and vulnerability in

international relations


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Vicious Cycle of Poverty &

Low-Level Equilibrium Trap

Low Level of Income

Low level of Savings

Low level of capital formation

Low productivity


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Traditional Meaning of Development

Structural and sectoral changes in an

economy with respect to output and

employment share

Underdevelopmentimplies

Agricultural Share is highest

followed by industry and

services sector

Developing implies Agricultural share declines industry andservice sector increases with industry

share being the highest

Developedimplies

Services sector share highest followed by

industry


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The Rostows stages of growth

Five stages

Traditional

TransitionalTake-off

Maturity

High mass consumption


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Three core values of New Definition

of developmentLife sustenance

Self-esteem

Freedom for servitudeAbove framework is a multidimensional

framework


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Trade as a vehicle of growth

Two development strategies

Import substitution

Export-orientation

Importance of International finance

Trade as an Engine of growth Inequality reduction through trade?

Economies of Scale Growth of MNCs


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Current Account in some developing

nations_ 2009

CountryCurrent a/c balance as a % of gdp

Argentina

4.416

Brazil-1.269

China7.808

India-2.212

Russia 3.62

Source: World Economic Outlook, October 2009


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Inclusive Growth

Birdsall identified three definitions

Long term objective of Productive

Employment instead of direct redistributionof income

Creates new opportunities with access of

equal opportunities to all

Growth beneficial to large proportion of

people in population


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Barriers and Constraints for

Inclusive Growth

Geography

Human Capital

HealthAssets and Access to Credit

Economic Insecurity

Displacement due to Industrialization


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Policies to promote Inclusive

growth

Enabling Environment

Redistributive Public Expenditure and

Social protectionHuman Capital and job creation

Broad-based Sectoral growth

Infrastructure DevelopmentPartnerships


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Relation between Inclusive Growth

and Sustainable Development

Sustainable Development Securing

future generation

Inclusive Growth Including all sections ofpopulation in the growth process

Inclusive Growth with sustainability

Sustainability in terms of productive

employment, education, and health for

both present and future generation.


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Why Inclusive growth strategy in

India Now?

High GDP growth without trickle down

effect

The Planning ProcessPolitical will

Displacement and development

Unemployment and Underemployment


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Development strategies in Indian

Planning

Mahalanobis Strategy

Gandhian Approach

Liberalization, Privatization andGlobalization Process (LPG)

Providing Urban Amenities to the Rural

Area (PURA)


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Mahalanobis strategy

Emphasis on heavy

industry

Agriculture and Small

scale sector as a linkage

through heavy industry

Inequality reductionthrough fiscal policy

Low stress on export

orientation

Public sector importance

Gandhian Model growth

Stress on Agriculture

Cottage and village

industries

Provision of wage goods

to the urban mass

Liberalization,Privatization and

Globalization


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LPG

To reduce fiscal deficits,

disinvestment of Public

Sector

Opening up of Private

Sector in major sectors

Freed from the thresholdasset limit of MRTP

FDI promoted

Revival of Sick Public

Sector units Export orientation in

terms of liberal trade

PURA A neo-Gandhian

Approach

Providing Urban

Amenities in Rural Areas

Agriculture and

Processing

Reliable quality electric

power for all

Education and Health

Expansion of information

and communication

technology to rural areas Development of strategic

sectors


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Four Connectivities in PURA

Model

Physical

Electronicknowledge

Economic


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ACME Telepowers Model ofRural

Livelihood

Preservation of fruits

Cold StorageUsing Renewable Energy

Retail outlet

Employment Generation in Rural Area

Knowledge Connectivity

Economic Connectivity

Electronic Connectivity

No wastage of fruits


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Common Service Centres

Project Go

IInitiatives -

PPP

CSC

To promote Village Level entrepreneur Provide connectivity services,

other digital services,non-digital services

Road Infrastructure

Telecommunication Infrastructure

Power Infrastructure

Approval of G to C ServicesSpread of Internet Awareness

Entrepreneurial Ability

Knowledge Connectivity

Electronic Connectivity


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Eleventh Five YearPlans

Approach to Inclusive Growth

Towards faster and more Inclusive

growth

Lack of inclusiveness addressing SC/ST,Minorities and Women

Vision

Generation of adequate productiveemployment opportunities

Access to essential services

Social Justice and Empowerment


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Vision

Generation of adequate

productive employment

opportunities

Access to essential

services

Social Justice andEmpowerment

Policy designed

To enhance centralbudgetary provision

towards centrally

sponsored schemes

already implemented in

the Tenth plan on socialinfrastructure, viz.,

National Rural

Employment Generation

Scheme, Sarva ShikshaAbhiyan, Bharat Nirman,

etc.


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Requirements forInclusive Growth

Agriculture and Rural Development

Need to develop the Non-Farm Sector

Technological Infusion to ProvideEducation

Technological Infusion to Provide Health

CareTechnological Infusion to provide Financial

Inclusion


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Role ofPrivate Sector in Inclusive

Growth Exploit Opportunities?

Formation of Social Entrepreneurship

Providing for Health and Education

through CSR

ICT led innovative Rural development

Business oriented strategies to upgrade

quality of living

Generating Quality Employment

PPP in Infrastructure Development

Financial Inclusion

concept of economic development

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