DEVELOPMENT

Prof. Hanumant Yadav

HNLU, Raipur

Prof. H. Yadav,
HNLU,

Economic Growth
Economic Growth
Economic Progress
Economic Development

Prof. H. Yadav,
HNLU,

Economic Growth
Growth in Economics is known as Economic Growth
which indicates increase in production of goods
and services in a country or a State.
In the context of economy, economic growth
indicates increase in national output or GNP or
GDP.
Economic growth has also been defined in terms
of per capita increase in GNP or GDP. This is a
better definition for two reasons, firstly it
takes population growth under consideration;
secondly it makes comparison easier.

Prof. H. Yadav,
HNLU,

Economic Growth
Another measurement of economic growth is :
Per unit increase in output with same level of
input.
This is a productivity concept of economic growth
which measures growth in terms of per worker
production, per hectare production, total value
of input to total output.
This method is used to compare efficiency of
production system or economy.

Prof. H. Yadav,
HNLU,

Growth Rate
Growth Rate or Economic Growth Rate
indicates per annum increase in GDP or GNP
or national output in a country.
National Income is also defined in terms of
total value of goods and services produced in
a country in a year. It means National
Income is represented by GNP.
So, Growth rates indicates per annum
increase of National Income of a country.
Prof. H. Yadav,
HNLU,

Economic Progress
Economic progress indicates increase in
the stock of physical assets and capital
goods. Increase in the number of
Buildings, Dams, Roads, Railways,
vehicles, Factories, machines, etc.
The economic history of countries have
shown that in the past Economic growth
and economic progress have taken place
without Government intervention and
initiatives. .
Prof. H. Yadav,
HNLU,

Economic Development
Development indicates increase in level of living
along with increase in output.
Per capita increase of output as well as per
capita increase in consumption is better
indicator of Development.
The Economic development includes both
economic growth and economic progress.
Thus it is a misconception that economic growth and
development have same meaning so can be used
interchangeably.

Prof. H. Yadav,
HNLU,

Growth and Development

Economic growth is easily quantifiable
growth of national product, growth of
savings and investment.
Development encompasses a wide range of
ideas from the economic growth, to
better/just distribution, stability in social
life. Thus development includes
improvement in quality of life.
Prof. H. Yadav,
HNLU,

Distinct Features of Economic

Development
1.

2.

Development indicates increase in per capita

production as well as per capita consumption. So
development includes upliftment of weaker
sections of the society,I.e. scheduled Castes,
scheduled tribes, unorganized agriculture labour,
rural artisans, etc. Thus development leads to
poverty alleviation in a country.
Development is defined economic growth with
social justice or distributive justice. It means
that the underprivileged also get share of
economic growth or increased GNP/GDP.

Prof. H. Yadav,
HNLU,

Distinct Features of

Development

3. Economic planning is also necessary for

development.
4. Plans are prepared and implemented under the
directions of State. It indicates Government
involvement is necessary for the development.
.5. Development also includes legal provisions and
regulatory frame work to check the
exploitation of underprivileged, to provide
gainful employment to them and raise their
standard of living.

Prof. H. Yadav,
HNLU,

10

Distinct Features of
Economic Development
6. Development requires establishment of
institutions to meet the growth needs of
different sectors, e.g. In India NABARD in
agriculture sector, IFC in Industrial sector,
SISI and SIDBI for promotion of small
Industries.
7.
Development requires Government initiatives
for development of infra-structure and capital
market.
8. Conservation of environment is one of the
component of development.

Prof. H. Yadav,
HNLU,

11

1.

Development Indicators
High per capita Income

-----------------------------------------------------Country
Per Capita GNP US$
I - Low Income
$ 875 or lees
2- Lower Middle Income $ 876 - 3465
3- Upper Middle Income $ 3466 - 10725
4- High Income
$ 10726 & above
------------------------------------------------------------------------------------

Source : World Bank/UNDP, 2005

Prof. H. Yadav,
HNLU,

12

Development Indicators
2. High level of living : High Per capita
consumption of
A) Household items: food, clothing, housing B)
Industrial items: Per capita consumption of
electricity, steel, etc.
2. Lower contribution of Agriculture sector to
GDP and low dependency for employment :
( Percent contribution) Industrially developed

countries are known as developed countries, such as USA,

UK, Japan, Germany, France, etc.

Prof. H. Yadav,
HNLU,

13

Development Indicators
4. Low Poverty Ratio : Small size of Population below
Poverty line. ( Zero ratio)
5. High Rate of Capital Formation :
6. High Life Expectancy
7. Developed Infrastructure : Transport and
communication facilities, Financial institutions,
Technical Training facilities ( units per 100 sq.km /
per lakh population)
8. Developed Health facilities : It leads to
Low
Infant Mortality Rate, Low Mother Mortality Rate

Prof. H. Yadav,
HNLU,

14

Development Indicators
9. High literacy rate particularly female
literacy rate
10. Export of Finished and value added
goods

11. Low Inequality of Income and Wealth :

Prof. H. Yadav,
HNLU,

15

Development Economics
Development Economics studies
models, theories and problem of
economic development.

Prof. H. Yadav,
HNLU,

16

Four Wheels of
Economic Development
1.
2.
3.
4.

Human Resources :
Natural Resources
Capital formation
Technology and entrepreneurship

Prof. H. Yadav,
HNLU,

17

Wheels of Development
Human Resources : a) Size of labour force
b) Education c) Skill
Natural Resources : a) Energy b) Soil
c) minerals d) Climate
Capital formation : a) Plant and machinery
b) Infrastructure facilities
Technology and Entrepreneurship :
a) Technical know how b) managerial know how
c) Innovation and initiative to launch enterprise

Prof. H. Yadav,
HNLU,

18

Capital formation
Savings = Income - Consumption
INVESTMENT = part of savings used for
earning income a) Interest : Deposit in banks,
purchase of bonds,
b) Dividends : purchase of shares
PRODUCER : Mobilization of funds by issuing
bonds, shares, and borrowing from financial
institutions)
Capital formation : Purchase of Plant &
machinery, building, equipments, etc.

Prof. H. Yadav,
HNLU,

19

Development :

Inhibiting factors/Obstacles
1.
2.
3.
4.
5.
6.

Vicious Circle of Poverty

Over-Population
Inflationary trend
Poor governance / corruption
Poor infrastructure
Shortage of skilled mkanpower
Prof. H. Yadav,
HNLU,

20

Development :

inhibiting factors/obstacles
7. Low savings and investment
8. Undeveloped capital marked and low
rate of capital formation
9. Old Technology
10. Lack of entrepreneurship
11. Traditional outlook and castecisim

Prof. H. Yadav,
HNLU,

21

DEVELOPMENT
ISSUES & CHALLENGES

Prof. H. Yadav,
HNLU,

22

Development :
Issues & Challenges
1.
2.
3.
4.
5.
6.

How to achieve double digit growth

How to achieve inclusive growth
How to achieve sustainable growth
How to control inflation
Good Governance
Participatory growth
Prof. H. Yadav,
HNLU,

23

Features of
Underdevelopment
A) Economic Features
B) Non-Economic Features

Prof. H. Yadav,
HNLU,

24

ECONOMIC FEATURES
of Underdevelopment

-----------------------------------------------------------------------------------------------

Country

Per Capita GNP US$

1. Low per Capita GNP / GNI

------------------------------------------------------------------------------------

- Low Income
$ 875 or less
2- Lower Middle Income $ 876- 3465
3- Upper Middle Income $ 3466- 10725
4- High Income
$ 10726 & above

------------------------------------------------------------------------------------

Prof. H. Yadav,
HNLU,

25

Economic features
2 Significant size of Population below
Poverty line
3. Over-dependency on Agriculture sector
: A) Disguised Unemployment
B) Zero Marginal Productivity
4. Heavy Population pressure

Prof. H. Yadav,
HNLU,

26

5. Low Rate of Capital Formation

6. Inequality of Income and Wealth
7. Underutilization of Resources
8. Lack of Entrepreneurship
9. Export of Raw material and Minerals
10. Technological backwardness

Prof. H. Yadav,
HNLU,

27

Economic Features
11. Poor Infrastructure
a) Poor Transport and
Communication facilities
b) Poor Banking facilities
c) Poor Technological and Professional
Education and Training Facilities

Prof. H. Yadav,
HNLU,

28

Non-Economic Features
1. Low Life Expectancy
2. High Infant Mortality Rate
3. High Mother Mortality Rate
4. High Rate Illiteracy
particularly among female
Prof. H. Yadav,
HNLU,

29

Non-Economic Features
Traditional Outlook

5. Casteism and Regionalism

6. Low status of women

Prof. H. Yadav,
HNLU,

30

DEVELOPMENT
SCHEMES
Rural Development Schemes
Poverty Alleviation Schemes
Employment Generation Schemes

Prof. H. Yadav,
HNLU,

31

Rural Development
Programmes
Integrated Rural Development
Programme (IRDP)
Pradhan Mantri Gramodoya Yojna
(PMGY)
Bharat Nirman Yojna

Prof. H. Yadav,
HNLU,

32

Integrated Rural Development

Program (IRDP)

Prof. H. Yadav,
HNLU,

33

Prof. H. Yadav,
HNLU,

34

Prof. H. Yadav,
HNLU,

35

Prof. H. Yadav,
HNLU,

36

Prof. H. Yadav,
HNLU,

37

Prof. H. Yadav,
HNLU,

38

Prof. H. Yadav,
HNLU,

39

Prof. H. Yadav,
HNLU,

40

Prof. H. Yadav,
HNLU,

41

Prof. H. Yadav,
HNLU,

42