Economic growth is increase in a country’s real GDP or per capita income over a long period of time. It does not mean erratic increase in income but a sustained increase over a long period of time. Economic growth 1s increase in total capital stock of the country so that country's productive capacity increases over time. It deals with material welfare and concentrates on increase in total availability of goods and services in an economy over a period of time. It is a process whereby an economy is capable to increase the size of its cake but does not ensure that the cake will be distributed equally amongst different members of the economy.
(a) Economic growth is Quantitative while economic development is a qualitative concept.
(b) Economic Growth is Quantitative while economic development is qualitative.
(c) Economic growth is comparatively a narrow concept and Development is much more comprehensive.
(d) Economc Growth refers to increase in the total output of final goods and services in a country over a long period of time. In contrast, Economic Development refers to progressive change in the socio-economic structure of the country. It includes gender equality, change in composition of output, shift of labour force from agriculture to other sectors.
(e) Economic growth is easy to realize as only monetary aspect is involved. But, it is very difficult to attain the goal of development as it involves many socio-economic-political aspects.
(f) Economic Growth can easily be estimated by real GDP or Real Per Capita income. But it is very difficult to measure development as it has some aspects that can’t be quantified. Economic Development however is indicated by Human Development index.
(g) Economic Growth can take place without Economic Development; however, Economic Development can’t take place without economic growth.
Following major changes in the structure of the economy as an economy develops:
(a) As a percentage of GDP, savings increase, food consumption decrease, non-food consumption increase, relative output of industry and tertiary sector increase and that of agriculture decrease with development.
(b) Share of workers employed in primary sector decrease and that of industry and tertiary sector increase.
(c) Exports account for larger proportion of incomes and composition of exports shifts from raw material to finished goods, primary products to industrial products and services. BOT will come in balance.
India’s economy has made great strides in the years since independence. In 1947, the country was poor and shattered by the violence and economic and physical disruption involved in the partition from Pakistan. The economy had stagnated since the late nineteenth century and industrial development had been restrained to preserve the area as a market for British manufacturers. In Fiscal Year (FY) 1950, agriculture, forestry and fishing accounted for 58.9 per cent of the Gross Domestic Product (GDP) and for a much larger proportion of employment. Manufacturing, which was dominated by the jute and cotton textile industries, accounted for only 10.3 per cent of GDP at that time.
Beginning in the late 1970s, successive Indian Governments sought to reduce state control of the economy. Progress toward that goal was slow but steady, and many analysts attributed the stronger growth of the 1980s to those efforts. In the late 1980s, however, India relied on foreign borrowing to finance development plans to a greater extent than before. As a result, when the price of oil rose sharply in August 1990, the nation faced a balance of payments crisis. The need for emergency loans led the government to make a greater commitment to economic liberalization than it had up to this time. In the early 1990s, India’s post- independence development pattern of strong centralized planning, regulation and control of private enterprise, state ownership of many large units of production, trade protectionism, and strict limits on foreign capital was increasingly questioned not only by policy-makers but also by most of the intelligentsia.
As India moved into the mid-1990s, the economic outlook was mixed. Most analysts believed that economic liberalization would continue, although there was disagreement about the speed and scale of the measures that would be implemented. It seemed likely that India would come close to or equal the relatively impressive rate of economicgrowth attained in the 1980s, but that the poorest sections of the population might not benefit.
0 Comments