In general, the terms Economic Growth and Economic Development are used to express

the same idea i. e., Economic Advancement. But the term economic development is more
comprehensive in its scope. Growth means persistent increase in per capita income. While
development includes growth and structural changes like, infrastructural, social and political
in the country.
ECONOMIC GROWTH:
Definitions:
According to Micheal P. Todaro.
Economic growth is a steady process by which the productive capacity of the economy is
increased over time to bring about rising levels of national output and income.
According to Simon Kuznets.
Economic growth may be defined as a long term process wherein the substantial and
sustained rise in real national income, total population and real per capita income takes
place.

Essentials of Economic Growth:

Above definitions are showing following basics of economic growth:
i. Economic growth is a long run process; it includes a period of decades.
ii. Economic growth shows higher rate of increase in real per capita income than rate of
growth of population.
iii. Economic growth is always linked with large increase in productive ability of the
economy.
iv. Economic growth is connected with the fair distribution of income and wealth.
v. Economic growth is attached with the reduction in poverty and unemployment.
ECONOMIC DEVELOPMENT:
Definitions:
Simple Definition.
It refers to the process whereby the total supply of goods and services of the society
increases leading towards improved living standard.
According to Micheal P. Todaro.
 Development must be conceived (considered) for as a multi-dimensional process involving
major change in social structures, popular attitudes and national institutions as well as the
acceleration of eco-growth, the eradication (end) of poverty and reduction of inequality of
wealth.

Structural Changes of Economic Development:

Economic development represents following structural changes in various sectors of the
country:
There is a change in the occupational structure. In economic development there is
decrease in the share of labour force in primary sector (farming, fishing and mining etc.) and
increase in the share of labour force in secondary sector (industry etc).
i. There is a change in the structure of national output. The contribution of primary
sector in the national output falls and the share of secondary and tertiary (3 rd) sector slowly
go up.
ii. There is a change in the structure of industrial production. There is an increase in
the production of capital goods and decrease in the production of consumer goods.
iii. There is a change in the structure of foreign trade. The share of primary goods in
exports decreases and the share of capital goods in imports increase. Accordingly, in
economic development there is an increase in exports of manufactured and final goods.
Similarly, there is decrease in the imports of consumer items.
iv. There is a change in the structure of technology. In the economic development
modern and advanced techniques are used in all the sectors of economy.
v. There is a change in the social and institutional sector. Due to economic
development there is an increase in the self-esteem and living standard of the population.
Conclusion:
We conclude that, normally the terms economic growth and economic development are
used for the explanation of encouraging changes in the economic achievements of a
country.

Economic Growth = Annual increase in per capita income

Economic Development = Economic Growth + Structural Changes