Economic Development It is concerned with whole changes in the Scope: economy It implies changes in income,saving and investment along

with progressive changes in Implication: socio-economic structure of country(institutional and technological changes)

Economic Growth Growth is concerned with small changes in the economy It refers to an increase in the real output of goods and services in the country like increase the income in savings,in investment etc.

Economic Growth relates to Economic Development relates to the optimum utilisation and Utilisation: utilisation and devlopment of unused resources development of under-utilised in the underdeveloped countries resources of developed countries Growth relates to a steady ,general Development relates to growth of a stationary and gradual increase in the rate of Growth: state to a higher level of equilibrium savings and output and investment Economic Development refers to the problem Economic Growth refers to Definition: of Developing countries Developed countries Brings both qualitative and quantitative Brings quantitative changes in the Effect: changes in the economy economy

Economic Growth is a narrower concept than economic development.It is an increase in a country's real level of national output which can be caused by an increase in the quality of resources (by education etc.), increase in the quantity of resources & improvements in technology or in another way an increase in the value of goods and services produced by every sector of the economy. Economic Growth can be measured by an increase in a country's GDP (gross domestic product). Economic development is a normative concept i.e. it applies in the context of people's sense of morality (right and wrong, good and bad). The definition of economic development given by Michael Todaro is an increase in living standards, improvement in self-esteem needs and freedom from oppression as well as a greater choice. The most accurate method of measuring development is the Human Development Index which takes into account the literacy rates & life expectancy which affect productivity and could lead to Economic Growth. It also leads to the creation of more opportunities in the sectors of education, healthcare, employment and the conservation of the environment.It implies an increase in the per capita income of every citizen. Economic Growth does not take into account the size of the informal economy. The informal economy is also known as the black economy which is unrecorded economic activity. Development alleviates people from low standards of living into proper employment with suitable shelter. Economic Growth does not take into account the depletion of natural resources which might lead to pollution, congestion & disease. Development however is concerned with sustainability which means meeting the needs of the present without compromising future needs.

These environmental effects are becoming more of a problem for Governments now that the pressure has increased on them due to Global warming. Economic growth is a necessary but not sufficient condition of economic development.

Economic development is a normative concept meaning that the definition is variable however, the definition given by Michael Todaro is an increase in living standards, improvement in self-esteem needs and freedom from oppression aswell as a greater choice. The most accurate method of measuring development is the Human Development Index which takes into account the literacy rates & life expectancy which affect productivity and could lead to Economic Growth. Economic Growth is an increase in a country's real level of national output which can be caused by an increase in the quality of resources by education etc, increase in the quantity of resources & improvements in technology. Economic Growth can be measured by an increase in a country's GDP. However this does not necessarily mean that development has occured. There is an issue of the distribution of income. It is thought that an increase in a country's GDP means everyone benefits however this increase might only benefit the rich. This creates alienation, encourages crime and threatens social cohesion. This can be justified on the grounds that wealth will eventually trickle down, the 'trickle down' effect. But the problem this creates is that it is far too slow compared to other development policies for example an increase in government spending on health and education. Economic Growth does not take into account the depletion of natural resources which might lead to pollution, congestion & disease. Development however is concerned with sustainability which means meeting the needs of the present without compromising future needs. These environmental effects are becoming more of a problem for Governments now that the pressure has increased on them due to Global warming. Economic Growth does not take into account the size of the informal economy. The informal economy is also known as the black economy which is unrecorded economic activity which in most cases is illegal. This stifles development because it creates urban congestion & allows disease to be spread more quickly. The informal economy also has very little regard for health & safety issues. The government can not collect taxes from them and hence they can not use that money to spend on health and education. Developement alleviates people from low standards of living into proper employment with suitable shelter. Using GDP as a measurement of Development is inaccurate because the exchange rate is not taken into account and the actual level of income might be very different. This can be resolved if the Purchasing Power Parity is used which takes into account the different price levels in country's. The HDI is more effective in measuring development however, this also has to be taken with caution as there are other elements such as access to clean water & doctors per 1000 which can also be used that are not included in the HDI. Overall, to conclude, Growth is just one dimension of development. Economic Growth is a necessary but not a sufficient condition for development because GDP per capita might be rising but at the same time, poverty might be increasing, inquality rising and massive environmental damage might be occuring.

Economic Growth vs Development At first glance, you might feel that we are talking about one and the same thing when we discuss economic growth and economic development, but in reality, these are related but different concepts used in different contexts by economists. Sometimes, people use the terms interchangeably which is incorrect and the two concepts will be clearer in your mind after reading this article. Economic growth of a country is a quantitative measure as there are indicators to tell the economic growth of a country. GDP and GNP are indicators that not only tell the size of an economy, they also tell in numbers and percentage how much an economy has progressed compared to last year. On the other hand, development is an abstract concept hard to measure. Yes, you can tell the difference as when there is perceptible difference in the lifestyles of the people of the country but development is not just confined to income levels and encompasses many more indicators such as life expectancy, education, health and many other factors that go into improving the quality of life. A country may be rich as when its GDP is high but if its social fabric is not developed, the country is still not considered as developed. However, it is seen that in general, when there is economic development, economic growth is invariably there. One can verify this fact in the list of the countries placed according to their GDP. Even though China and India have fairly large economies with high GDP, they are still not considered as developed countries because of their lowly ranks on other parameters such as health, education and life expectancy. Socio-economic development automatically leads to economic growth of a country as has been the case with many countries that are included in the list of developed nations today. Because of all such considerations, an altogether index called Human Development Index (HDI) has been developed to rank countries according to their economic development and not just according to their GDP which is really a misnomer.