Coverage:
General Studies- III: Economic Development
Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Answer structure
- Introduction: “Economic Development” was used interchangeably with “Economic Growth”
- Body: Means for Economic Growth, means for Economic Development
- Conclusion: Underdeveloped Countries, Economic Growth and Economic Development
Answer:
Until 1960s, the term “economic development” was used interchangeably with “economic growth,” the latter being assessed by increase in per capita GNP in real terms.
According to Kindleberger, “Economic growth refers to increase in output, economic development encompasses changes in technological and institutional organisation of production and distribution of income.”
Economic development is a broader concept than economic growth. In comparison to the goals of development, achieving economic growth can be more straightforward.
By mobilising resources more effectively and enhancing their productivity, output levels can be increased. However, development process entails increase in output, alterations in composition of that output and reallocation of productive resources to promote social justice.
In some cases in underdeveloped countries, economic growth has coincided with economic development, but not always. It is possible to experience growth without development, development without growth is inconceivable. A significant increase in a country’s GNP is essential before it can expand its industrial and service sectors.
(The model answer provided by us strictly follows the word limit, the above answer is compiled in 156 words.)