ECONOMIC GROWTH AND DEVELOPMENT

Economic Growth

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

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.