ECONOMIC GROWTH AND

ECONOMIC DEVELOPMENT
SIMILARITIES AND DISSIMILARITIES

PARADYGM SHIFT IN DEVELOPMENT

EFFICIENCY

SOCIAL

DEV.

SUSTAINABLE DEV.

HUMAN DEV.

H.R.D.

ECONOMIC DEV.

ECONOMIC GROWTH

EQUITY

DIFFERENCE BETWEEN ECONOMIC

GROWTH AND DEVELOPMENT
Economic 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-

ECONOMISTS VIEWS ON
ECONOMIC DEVELOPMENT
Meir 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

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 DEVELOPMENT

SUSTAINABLE 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
DEVELOPMENT
At 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 ASPECTS
1. Increase in real income and per capita
2.
3.
4.
5.

income.
It is a long term process
Changes in social and economic institutions
Improving Standard of living
Welfare of the people should increase
through the increase of employment
opportunities, reduction in income
inequalities and eradication of poverty.

DETERMINANTS OF ECONOMIC
DEVELOPMENT
1. Natural resources
2. Human resources
3. Institutional factors (democracy,

freedom and human rights)

4. Capital and technological progress
5. Managerial skills
6. Foreign Trade and Investment

1.NATURAL RESOURCES
Boumol 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 RESOURCES
Population 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
FACTORS
Economic 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 PROGRESS

Capital 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 SKILLS
India is often quoted as a rich country with poor

managerial skills
Enterprise 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 INVESTMENT

Foreign 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.