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3.1 - Economic Growth and Development

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Shuchi Goel
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31 views12 pages

3.1 - Economic Growth and Development

Uploaded by

Shuchi Goel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Economic Growth and

Development
Economic growth:
Economic growth can be
defined as an increase in
the capacity of an
economy to produce goods
and services, compared
from one period of time to
another. Economic growth
can be measured in
nominal terms, which
include inflation, or in real
terms, which are adjusted
for inflation.
Economic development:
• Economic Development is
policy intervention with aims of
development of :
 Human capital
 Literacy ratio
 Infrastructure
 Health & general welfare of the
citizens
whereas Economic growth is a
phenomenon of market
productivity and rise in GDP
Economic development is:
• Quantitative and Qualitative
changes in the economy
• Promoting the standard of
living and Economic health
• Human Development Index
is one of the most accurate
method for measuring it which
takes into account the literacy
rates & life expectancy.
• Modernization and
industrialization plays
important role for economic
development of a nation.
Factors affecting Economic
Development :

• Inflation distorts business decisions as buying


capacity of consumer reduces.
• Tax Levels Income tax affect how much consumer
have to spend, hence the demand.
• Interest Rates can impact the growth of an industry.
For ex. High car loan interest rate will discourage
vehicle industry.
• Governmental Policies provides a friendly
environment for businesses to move into and operate
within a community.
• Currency Strength is important even for
companies that do not import or export goods.
• Government Intervention Many industries are
regulated by the government which ensures safety
of consumers, employees & natural resources
• Overall Economic Health The economic state of
the country and consumer confidence can also
spur development or harm it.
• Social and Cultural Values affect economic
development through attitude toward progress.
• Foreign Direct Investment
Indicators of Economic Growth:
• Using measures of economic performance in terms of the
value of income, expenditure and output
• GDP – Gross Domestic Product
▫ The value of output produced within a country during a
time period
The Importance of Economic Growth:
• Economic growth is important because it is a necessary
ingredient for both higher incomes and higher living
standards.

• GDP is a measure of both output and income. Growth of


output is necessary for growth of income.

• Per capita GDP is the nation’s GDP divided by its


population. Growth of per capita GDP means more goods
and services per person.

• In most cases, higher levels of per capita GDP will mean


that the typical person has a better diet, improved health
and access to medical services, a longer life expectancy,
and greater educational opportunity.
Indicators of economic development:
• GDP PER CAPITA
• LIFE EXPECTANCY
• LITERACY RATES
• MEASURES OF POVERTY
• DEMOGRAPHIC
INDICATORS
• DISEASE INDICATORS
ECONOMIC DEVELOPMENT IN
INDIA
• After fundamental
reforms since 1991 and
their renewal in the
2000s, India has
progressed towards
a free market economy

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