ECONOMIC GROWTH AND ECONOMIC DEVELOPMENT

ECONOMIC GROWTH AND ECONOMIC DEVELOPMENTSIMILARITIES AND DISSIMILARITIESPARADYGM SHIFT IN DEVELOPMENT EFFICIENCY

SOCIAL DEV.

SUSTAINABLE DEV.

HUMAN DEV.

H.R.D.

ECONOMIC DEV.

ECONOMIC GROWTH EQUITY DIFFERENCE BETWEEN ECONOMIC GROWTH AND DEVELOPMENTEconomic Growth: The increase in the real output of goods and services(GNP) is called economic growth.Economic Development: the overall progress of the country with institutional and technical changes is known as economic development. Economic development implies progressive changes in socio-economic structure of the country. ECONOMISTS VIEWS ON ECONOMIC DEVELOPMENTMeir and Baldwin Economic development is a process where by an economys real income increase over a long period of time.Kindle Berger--- Economic Growth refers to a rise in output, but Economic Development implies changes in technological and institutional organization of production as well as distributive pattern of income. H.R.D &H.D.Human Resource Development (Easterlin) includes training an individual after he/she is first hired, providing opportunities to learn new skills, distributing resources that are beneficial for the employees tasks, and any other developmental activities.

Human Development: (Amartya Sen and Huq ) development is focused on expanding the choices human beings have to have the life they value.In this sense, it is essential to work on building capacities for human development that is sustainable over time. These core capacities for human development are: 1.Enjoying a long and healthy life, 2.Being educated 3.Access to resources that enable people to live in dignity 4.Being able to participate in decisions that affect their community

SUSTAINABLE & SOCIAL DEVELOPMENTSUSTAINABLE DEVELOPMENT is development that meets the needs of the present without compromising the ability of future to meet their own needs. (Brundtland)

SOCIAL DEVELOPMENT is a process of social change through increasing awareness about their rights and improving organisation in physical, social, mental, and psychological aspects. (world bank)INDICATORS OF ECONOMIC DEVELOPMENTAt the initial stage, the concept of economic development was confined only to increase in the per capita income.But today, economic development is treated as multi-dimensional concept in terms of increase in real national income, real per capita income, economic welfare, human development index, etc.In brief, economic development brings about qualitative change which includes institutional and technical changes. DEVELOPMENT ASPECTSIncrease in real income and per capita income.It is a long term processChanges in social and economic institutions Improving Standard of livingWelfare of the people should increase through the increase of employment opportunities, reduction in income inequalities and eradication of poverty.DETERMINANTS OF ECONOMIC DEVELOPMENTNatural resourcesHuman resourcesInstitutional factors (democracy, freedom and human rights)Capital and technological progressManagerial skillsForeign Trade and Investment1.NATURAL RESOURCESBoumol and Lewis attached great importance to natural endowments of a country for its development.Availability of fertile soil with abundant supply of water for irrigation purposes provides favorable conditions for agricultural development.Availability of coal, petroleum, minerals like iron ore, copper and tin in plenty can induce the process of industrialization.Many countries which are presently under developed are poor in terms of natural resources. 2. HUMAN RESOURCESPopulation is an important factor in economic development . Man provides labor for production and if a country possess efficient labor with appropriate skills its capacity to grow will be high.If a country can manage to use its manpower properly, it will certainly add to the real economic development.In case, human resources remain either unutilized or manpower management remains inefficient and inappropriate, the same people who would have made a positive contribution to growth activity prove to be a burden on the economy. 3. INSTITUTIONAL FACTORSEconomic Development is influenced by variety of institutional factors- political, economic, social, cultural and religious factors in a society.Freedom of individual, right to property and role of government determine the pace of development.Experiences from number of countries show that whenever there is a defective social organization, only some people grab the benefits of growth. Under such circumstances, it is futile to hope that masses will enjoy the benefits of development activities undertaken by the State. 4. CAPITAL AND TECHNICAL PROGRESSCapital accumulation enlarges a countrys capacity to produce goods. Investment is a crucial factor in economic development.Capital accumulation helps the formation of sound infrastructure. The basic needs of an economy such as transport, communication, power, irrigation etc. are known as infrastructure.Capital accumulation is the main vehicle for the introduction of technical progress in the productive system.Technical progress increases the production tremendously and brings a change in social atmosphere too. 5.MANAGERIAL SKILLSIndia is often quoted as a rich country with poor managerial skillsEnterprise is the bedrock on which the structure of development is raised. Schumpeter has emphasized the role of entrepreneurship in economic development. Management is one aspect of entrepreneurship though these terms are sometimes used synonymously.Organizational abilities and managerial skills of a nation decide the developmental process.Education and technical progress increase an entrepreneurial ability.

6.FOREIGN TRADE AND INVESTMENTForeign trade enlarges the market for goods and services and provides greater scope for division of labor and specialization.Trade has been described as an engine of growth. The gains from trade may be divided into static and dynamic gains.The static gains are those which accrue from international specialization.The dynamic gains are economies of scale, international investment and spread of technical knowledge etc.