DETERMINANTS OF ECONOMIC DEVELOPMENT

WHAT IS ECONOMIC DEVELOPMENT ? Economic development is the increase in the standard of living in a nation's population with sustained growth from a simple, low-income economy to a modern, high-income economy. Its scope includes the process and policies by which a nation improves the economic, political, and social well-being of its people

WHAT IS ECONOMIC DEVELOPMENT Economic development is a broad concept, it include increase in economic welfare along with increase in per capita income. Economic development is qualitative concept ,it concern with equitable distribution of income and ensure good growth with justice Economic development term is generally used to indicate economic progress of underdeveloped countries

DETERMINANTS OF ECONOMIC DEVELOPMENT

ECONOMIC DETERMINANTS

NON-ECONOMIC DETERMINANTS

ECONOMIC DETERMINANTS ARE: NATURAL RESOURCES  LABOUR OR HUMAN RESOURCES  STRUCTURAL CHANGE  SIZE OF MARKET  CAPITAL FORMATION  CAPITAL OUTPUT RATIO  SCIENTIFIC AND TECHNICAL PROGRESS  FINANCIAL STABILITY  DEVELPOMENT PLANNING  ABLE ENTREPRENEUR AND ORGANISATION  INTERNATIONAL DETERMINANTS

NON ECONOMIC DETERMINANTS ARE: DESIRE FOR DEVELOPMENT  SPREAD OF EDUCATION AND SKILL FORMATION  POLITICAL DETERMINANTS  SOCIAL DETERMINANTS  FREEDOM FROM CORRUPTION  LAW AND ORDER SITUATION

NATURAL RESOURCES: Natural resources occur naturally within environment that exist relatively undisturbed by mankind, in a natural form. Natural resource determine the limit of economic development of a nation

LABOUR AND HUMAN RESOURCES: In certain less developed countries, abundance of labour is a source of economic capital. Its appropriate utilization facilitates capital formation and economic growth

 STRUCTURAL CHANGE: Structural change refer to change in occupational structure. Country s economic generally divided into three sector Primary- agriculture, forestry, etc. Secondary-industrial production, and the like Tertiary-trade, banking, service, etc. It is essential for economic development that more and more people are engaged in secondary and tertiary activities

 Capital formation capital formation means investment in industrial building,machines,means of transport and the like.It is essential for economic development that nearly 30% of the G.D.P is channalised towards capital formation

CAPITAL OUTPUT RATIO

Capital output ratio implies the amount of capital needed to produce one unit of output. Capital output ratio=K:Y K=capital Y=output It depend upon several factors such as capital efficiency, type of investment,etc. A low ratio of capital output ratio is conducive to economic development

Scientific and technical progress

Scientific and technical development is equally important for economic development. It is the principal determinant of growth in Japan and Germany. Economic development is depend on the use of innovation techniques by the entrepreneurs of a nation

Financial stability
Financial stability implies the existence of an efficient and organized banking system in the country economic development of a country also depend on financial stability. it is essential to control the price rise because economic development generally lead to rise in price

Able entrepreneur and organisation

Economic development depend upon its entrepreneur ability as well as organisational efficiency. It is required to economic development that number of entrepreneur increase, they set up industrial establishment.

DEVELOPMENT PLANNING
Development planning mean that the central planning authority plans for the achievement of certain targets within the stipulated period time. Planning ensure the proper utilisation of resources with a view to stimulating the process of growth

INTERNATIONAL DETERMINANTS
International determinants such as foreign capital, technical know how, international trade and investment plan a significant role in economic development mainly in less developed countries

DESIRE FOR DEVELOPMENT

Development is impossible if it does not take place in the minds of men if no desire for development no account of development os possible

EDUCATION AND SKILL FORMATION Investment in education is not only highly productive but also yields increasing returns. so,education play pioneer role for the creation of human capital and social progress whish in turn determine the progress

POLITICAL DETERMINANTS
Economic development of a country is very much influenced by its political environment. An efficient, honest and welfare oriented administration is main determinant of national development. The political leaders should be dedicated and devoted to the cause of economic development

SOCIAL DETERMINANTS
Economic development is closely associated with social changes. Social institution like caste system, joint family system, law of inheritance etc. have their powerful impact on economic development

FREEDOM FROM CORRUPTION

On the account of corruption at all level, there is tax evasion on a large scale in underdeveloped countries. Corruption is the barrier in the way of economic development

LAW AND ORDER SITUATION

Atmosphere of peace and proper law and order in the country are essential of its economic development.domestic and foreign entrepreneurs will increase investment if there is peaceful atmosphere

In short, economic development is not determined by any single factor. It depends upon various economic, political as well as social factors. It is only through the right co-ordination between these factors and the will to developed that the process of development can be accelerated