Economic Growth &
By : Radhika Gohel
Attention of Economists
Different Economists convey different meanings
Some Economists says no need to frame its precise
definition while others….
• Thus growth & deve. are used interchangeably
• We also feel the same that to avoid ambiguity it’s
better to identify economic growth in terms of some
– Economic growth refers to increase over the time
in a country’s real output of goods & services.
[national income, per capita income & social
– Historically E.G accompanied/measured by
Greater Industrialization & Commercialization
– E.G is not an end in itself. It is rather a means
to an end.
• Determinants of Economic Growth:
– Per capita income
– Some of the times population grows faster then the
– So that the most appropriate approach to measure
E.G is in terms of a rise in per capita net domestic
• Till 1960s, it was synonym of
• It is taken to mean growth + progressive changes in
• There are qualitative dimensions which missing..
• According to Mahbub ul Haq….
– We are taught to take care of GNP bcoz it would take care
of poverty but…
– Let us take care about the content of GNP more than its
rate of increase.
• The Traditional Approach:
– This approach defines development strictly in Economic
i. Sustained growth rate of GDP of 5 to 7% or more
ii. Structural transformation
• The New View Of Economic Development:
Having realized that about 40% of the world’s
population have not at all benefited from the economic
growth during 1950 & ‘60s the economists called for the
rejection of narrow definition of economic development.
During 1970 they redefined the
concept of economic development in terms of the
reduction or elimination of poverty , inequality &
unemployment in the context of growing economy.
• The new view of development includes
– Material in welfare
– Eradication of mass poverty
– Literacy rates
– Eradication of Disease & early deaths rates
– Unemployment and Inequality