The document discusses the differences between economic growth and economic development. It states that economic growth is a narrower concept, focused on increases in GDP, while economic development also considers improvements in human welfare factors like education, health, and living standards. The most accurate way to measure development is through the Human Development Index, which evaluates longevity, knowledge, and standard of living. Economic development leads to greater opportunities and productivity that can then enable continued economic growth.

1. ECONOMIC
DEVELOPMENT &
ECONOMIC GROWTH

2. • Economic Growth is a narrower concept than economic
development. It is an increase in a country's real level of
national output which can be caused by an increase in the
quality of resources (by education etc.), increase in the
quantity of resources & improvements in technology or in
another way an increase in the value of goods and services
produced by every sector of the economy. Economic Growth
can be measured by an increase in a country's GDP(gross
domestic product).

3. • Economic development is a normative concept i.e. it applies in
the context of people's sense of morality (right and wrong,
good and bad). The definition of economic development given
by Michael Todaro is an increase in living standards,
improvement in self-esteem needs and freedom from
oppression as well as a greater choice.

4. • The Human Development Index (commonly abbreviated HDI)
is a summary of human development around the world and
implies whether a country is developed, still developing, or
underdeveloped based on factors such as life expectancy,
education, literacy, gross domestic product per capita. The
results of the HDI are published in the Human Development
Report, which is commissioned by the United Nations
Development Program(UNDP) and is written by scholars,
those who study world development and members of the
Human Development Report Office of the UNDP.

5. According to the UNDP, human development is “about
creating an environment in which people can develop their full
potential and lead productive, creative lives in accord with
their needs and interests. People are the real wealth of
nations. Development is thus about expanding the choices
people have to lead lives that they value.”

7. • In the year 1990 the United Nations Development
Programme in its first Human Development Report
introduced the concept of Human Development
Index.
• It is the cumulative measurement of:
• (a) Longevity
• (b) Knowledge
• (c) Decent Standard of Living.

8. • (a) Longevity: It shows the life expectancy. It is a choice to live long and healthy
life.
• (b) Knowledge: It is a choice to acquire literacy, education, information, etc. It is
measured by the literate percentage in ratio with the total population. The literacy
rate may be compared in the primary, secondary and tertiary levels.
• (c) Decent standard of life: It is a joy to enjoy a quality and standard life. It
depends upon the purchasing power of the people and the per capita income of the
people etc.
• The rank of a country is determined by the overall developments in these three
basic dimensions of human developments. ADI ranks countries, in relation to each
other to tell them how for a country has travelled and how for yet it has to travel in
the part of Human Development

9. • The most accurate method of measuring development is the
Human Development Index which takes into account the
literacy rates & life expectancy which affect productivity and
could lead to Economic Growth. It also leads to the creation of
more opportunities in the sectors of education, healthcare,
employment and the conservation of the environment. It
implies an increase in the per capita income of every citizen.

10. DIFFERENCE BETWEEN ECONOMIC
GROWTH AND ECONOMIC
DEVELOPMENT.
• Economic Growth does not take into account the size of the
informal economy. The informal economy is also known as the
black economy which is unrecorded economic activity.
Development alleviates people from low standards of living
into proper employment with suitable shelter. Economic
Growth does not take into account the depletion of natural
resources which might lead to pollution, congestion & disease.

11. • Development however is concerned with sustainability which
means meeting the needs of the present without
compromising future needs. These environmental effects are
becoming more of a problem for Governments now that the
pressure has increased on them due to Global warming.

12. Basis Economic Development Economic Growth
Economic development implies
changes in income, savings and
investment along with progressive
changes in socio-economic
structure of country (institutional
and technological changes).
Economic growth
refers to an increase
in the real output of
goods and services
in the country.
Factors:
Development relates to growth of
human capital indexes, a decrease
in inequality figures, and structural
changes that improve the general
population's quality of life.
Growth relates to a
gradual increase in
one of the components
of Gross Domestic
Product:
consumption,
government spending,
investment, net
exports.

13. Basis Economic Development Economic Growth
Measurement:
Qualitative.HDI (Human
Development Index),
gender- related index
(GDI), Human poverty
index (HPI), infant
mortality, literacy rate etc.
Quantitative.
Increase in real GDP.
Shown by PPF.
Concept: Normative concept
Narrower concept
than economic
development

14. Basis Economic
Development
Economic Growth
Effect:
Brings qualitative and
quantitative changes in the
economy
Brings quantitative changes
in the economy
Relevance:
Economic development is
more relevant to measure
progress and quality of life in
developing nations.
Economic growth is a more
relevant metric for progress
in developed countries. But
it's widely used in all
countries because growth is a
necessary condition for
development.