INDICATORS OF GROWTH AND DEVELOPMENT — Economics STD 12 Commerce — Question
Gujarat BoardEnglish MediumSTD 12 CommerceEconomicsINDICATORS OF GROWTH AND DEVELOPMENT5 Marks
Question
Explain the meaning of economic development and also Explain its characteristics.
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Answer
$1.$ Introduction:
We need to understand as to what economic development actually means, when economics of Asia, Africa and Latin America have become proactive in achieving economic development.
Economic development is a process which is continuous to achieve economic well being.
Hence, the term economic development has a wider meaning which includes economic growth, economic welfare and economic progress.
Even in economic development there is an increase in the real national income and real per capita income, but economic development is not just about quantitative changes but also about qualitative changes.
Development is different from Growth.
It is a multi dimensional process. During the development process, both economical and social structural changes are seen.
The society also changes according to the development.
During Economic Development, the growth rate of Agriculture sector starts reducing and that of industrial and sertvice sectors start increasing. The workers working in agriculture sector are now a part of disguised unemployment.
To save time and money people use modern technology.
New technology is necessary in economic development.
New seeds are innovated.
As a result the structure of institutions pertaining to production and distribution changes and by that poverty and unemployment reduces.
The poor class or backward class of society gets nutritious food, clothing, shelter, primary education etc. in sufficient way.
$2.$ Definitions of Economic Development:
“Economic Development is a multi dimensional Process.”-Michael Todaro.
“Economic development is such a process in which there is no increase in the population living below the poverty line, the distribution of income does not further increase the inequalities and there is a continuous rise in the real per capita income of the country for a long period of time.”-G.M. Meier
“Economic Development is a process which increase the factors of production and create change in the technique of production due to which per capita income continuously increase and the standard of living continuously rise irrespective of whether population remains constant or increases.”-Machlup
$3.$ Characteristics of Economic Development:
$(1)$ Continuous process:
Economic development is a continuous process.
Economic development is a predetermined order and direction.
The process of development is easy to start but difficult to maintain for any country.
In starting stage it is fast but after some period it slows down.
$(2)$ Quantitative and Qualitative change take place:
In economic growth only Quantitative changes are measured but here both quantitative and qualitative changes are measured.
But there is more of qualitative improvement.
$(3)$ Change in demand:
There is rise in the income of the people due to development which changes their taste. Normally at starting stage of development people demand for primary goods but subsequently there is rise in the demand for comforts and luxury goods.
$(4)$ Labour become more dynamic:
Development leads to increase in education of labour which makes him more dynamic.
Also due to increase in transportation facility, labours are more movable now a days.
$(5)$ Increase Capital Formation:
In development with the change of demand, the value of commodities also increase.
For increase in new commodities more enterprises come forward.
The rate of investment and capital formation increase enormously.
$(6)$ Change in Technology:
During Development the new technology is applied so that the time and expenses both are saved.
There is a shift in dependence from tire and water based technology to coal and iron based technology which results in faster development.
$(7)$ Other:
After a particular stage, development becomes self motivating.
The development process of countries is different because the problems are also different. Human welfare is also taken into consideration.
Economic development is a wide concept which includes economic growth.
$4.$ Limitation:
$(1)$ Economic development shows the progress of a nation. It shows the economic scenario but in real scene, it cannot discuss the human development.
$(2)$ It cannot become the index of human progress.
$(3)$ It is very difficult to derive a measurement for this.
$(4)$ In India today, the standard of living of people is not much improved, so we cannot say that economic development means improvement in standard of living.
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