ECONOMIC GROWTH AND DEVELOPMENT
Economic Growth
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The
phenomenon of a sustained increased in the real per capita income of a country
over a period of time is known as economic growth. Economic growth is only
concerned with the production aspect of the economic activity and not
considering the distribution aspect
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Economic Development
Till 1960
the term ‘economic development’ was often used as a synonym of ‘economic growth’
in economic literature. But now the entire concept of economic development has
changed. It is considered to mean growth plus progressive changes in
certain crucial variables which determine the well being of the people. According
to UNO economic development concerns not only man’s material needs, but also
the improvement of social conditions of his life. As per the World Bank
reports, economic development means ‘the improvement in quality of life.’ The
improvement in quality of life is measured on the basis of the following
factors.
(1)
Reduction in absolute poverty (2) Reduction in unemployment (3) Improvement in
health standard(4) Improvement in educational standard(5) Access to clean
environment, and(6) Greater individual freedom
Difference between Economic Growth and Development
(1)
Economic Growth is a quantitative change but ED is a qualitative change
(2) EG is
a one dimensional process but ED is a multi-dimensional process.
(3) EG is
a necessary condition for ED but is not a sufficient condition for ED
Measures
of Quality changes
1. Physical Quality of Life Index (PQLI)
It is developed
by Morris.D.Moris in 1979.He uses three important variables
Like Life
expectancy at age 1,Infant Mortality Rate and adult literacy
A
country’s rank in PQLI is based on its performance in the above three areas. The
Overseas Development Council (ODC), a US based research council is the nodal
agency to construct the PQLI
2. Human Development Index (HDI)
HDI was
developed in 1990 by Pakistan economist Mahabub-ul-Haq and Indian economist
Amartya Sen.HDI has three important variables such as life expectancy,
literacy, education and standard of living for countries world wide. It is used
to measure the impact of economic policies on quality of life. HDI is prepared
by UNDP in every year in its Human Development Report (HDR)
3. Gender Development Index (GDI)
GDI is
same as HDI, but adjusted to reflect gender in equalities. It is also a comparative measure of
longitivity, literacy and standard of living.
But while calculating GDI separate index for each of the dimension are
separately calculated for men and women and then two are club together to
calculate the GDI
4.Gender Empowerment Measure(GEM):
GEM
measures the opportunities available to a woman in a society the capability of
political participation and decision making, economic participation and decision
making and command over resources
5. Human Poverty Index (HPI)
It tell
us the extent of deprivation in a society, ie What percentage of the population
is deprived of a longer life, literate life and decent standard of living.
6. Technology Achievement Index (TAI)
It is
introduced in 2001.It measures the capacity of a nation to create and diffuse
technology and to create human skills based on that technology.