Economic growth is defined as the rate of expansion that can move an underdeveloped country from near subsistence mode of living to substantially higher level over a long period of time.

1. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Affiliated to Institution of G.G.S.IP.U, Delhi
Assistant Professor
REENA YADAV
BBA(G)
INDIAN ECONOMY
17204

2. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
ECONOMIC GROWTH
• Economic growth is defined as the rate of
expansion that can move an underdeveloped
country from near subsistence mode of living to
substantially higher level over a long period of
time.
• It is the increase in output or production.
• It’s a process of sustained increase in the real
national income over a long period of time.
• It is an increase in aggregate output of goods and
services in a country during a given period of
time.

3. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
ECONOMIC DEVELOPMENT
• Economic development is a normative concept i.e. it
applies in context of people’s sense of morality (right and
wrong ; good and bad) . It is defined as increase in living
standards, improvement in self esteem needs and freedom
from oppression as well as a greater choice.
• It means both more output or production and changes in
the technical and institutional arrangements by which
factors of production are produced and distributed.
• Economic development includes only those changes which
gather momentum and continuously lead the hole country
to higher levels of economic activity.

4. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
ECONOMIC GROWTH VS ECONOMIC
DEVELOPMENT
BASIS ECONOMIC GROWTH ECONOMIC DEVELOPMENT
Concept It is a narrow concept which
refers to an increase in a
country's real output of goods
and services over a specific
period of time.
It is a comprehensive concept
which includes economic
growth and progressive
changes in social, economic,
political, cultural and historical
levels.
Attainment It can be easily attained by
mobilizing larger resources
and raising their productivity.
It is difficult to realize because
it also involves such changes
in the composition of output
which will ensure social
justice.
Significance It attaches less significance to
equitable distribution of
income, reduction in
employment and poverty
level.
It attaches greater significance
to equitable distribution of
income, reduction in
employment and poverty
levels.

5. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
ECONOMIC GROWTH VS ECONOMIC
DEVELOPMENT
BASIS ECONOMIC GROWTH ECONOMIC
DEVELOPMENT
Measurement It is measurable as it
includes only economic
factors like supply of
capital stock, capital-
output ratio, agricultural
surplus etc.
It cannot be easily
measured because non-
economic factors are also
included like quality of
human resources i.e.,
social organization etc.,
Indicators The indicators of economic
growth are real national
income and real per capita
income i.e., if national
income rises, economic
growth increases and vice
versa .
The indicators of economic
development are physical
quality of life index and
human development index
i.e., if literacy rate or/and
life expectancy rate rises
then economic
development rises and vice
versa.

6. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
ECONOMIC GROWTH VS ECONOMIC
DEVELOPMENT
BASIS ECONOMIC GROWTH ECONOMIC
DEVELOPMENT
Relationship It is possible for an
economy to have economic
growth without economic
development.
It is not possible to have
economic development
without economic growth.
Concern It is a concern of advanced
countries.
It is a major issue with
underdeveloped countries.
Examples of countries like China and India that have huge GDP but not labeled
developed because of their lower ranks on other parameters such as health,
education and life expectancy is enough to demonstrate the difference between
economic growth and economic development.

7. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
INDICATORS OF ECONOMIC GROWTH
• Real National Income
National income is the sum total of values of all final goods and services produced in
a country during one year, calculated after making necessary adjustments.
National Income at constant prices is called real national income.
• Real Per Capita Income
Per Capita Income is defined as the income per head of population in an economy.
It is estimated by dividing national income with the total population.
Per Capita Income calculated at constant prices is called Real Per Capita Income.
Real Per Capita Income = National income at constant prices
---------------------------------------------------
Mid- Year population

8. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
INDICATORS OF ECONOMIC
DEVELOPMENT
• PHYSICAL QUALITY OF LIFE INDEX(PQLI)
PQLI was developed by Hager and Morris. It
includes three indicators of economic
development.
1. Life Expectancy at age one, i.e., how long a
newly born can hope to live in this world.
2. Infant mortality rate, i.e., average number of
deaths per thousand children born within the
age of one year.

9. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
INDICATORS OF ECONOMIC
DEVELOPMENT
3. Literacy rate, i.e., percentage of population to
the total population which is literate.

10. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
INDICATORS OF ECONOMIC
DEVELOPMENT
• HUMAN DEVELOPMENT INDEX AND INEQUALITY ADJUSTED HDI
(IHDI)
Three indicators of HDI are
1. Life expectancy at birth : it is measured in terms of years.
2. Knowledge or educational attainment : it is measured by adult
literacy rate (two-third weight) and combined gross enrolment
rate (GER) of primary, secondary and tertiary levels( one- third
weight).
3. Standard of living : it is measured by GDP per capita (PPP). PPP
stands for purchasing power parity in terms of US dollars. PPP
GDP is calculated after eliminating price differences among the
countries.

11. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
FACTORS IN ECONOMIC
DEVELOPMENT
1. Economic factors
Natural and
human resources
Capital
formation
Technological
development and
innovation
Entrepreneurship
and foreign
capital
Occupational
structure

12. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
FACTORS IN ECONOMIC
DEVELOPMENT
2. Non- economic factors
Social and
institutional
factors
Political factors
Religious and
cultural factors

13. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
BASIC CHARACTERISTICS OF THE
INDIAN ECONOMY AS DEVELOPING
ECONOMY
India is an underdeveloped economy.
Almost all the characteristics of an
underdeveloped economy are found in the Indian
economy. That’s why Indian economy is classified
as an underdeveloped economy.
However, since India has the capacity to develop
its economy and is making serious efforts in that
direction, we may call it a developing economy.

14. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
FEATURES OF INDIAN ECONOMY
Low per capita
income
Low levels of
living
Technological
backwardness
Excessive
dependence
upon agriculture
Lower
productivity

15. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
FEATURES OF INDIAN ECONOMY
Rapid growth of
population
Existence of
unemployment
and disguised
unemployment
Poor quality of
human capital
Dualistic economy

16. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
TRENDS IN NATIONAL INCOME IN
POST INDEPENDENCE ERA
• Annual average growth rates of national
income at 1999-2000 prices
Five year plan in per cent
First plan (1951-56) 4.4
Second plan (1956-61) 4.0
Third plan (1961-66) 2.6
Annual plans (1966-69) 3.9
Fourth plan (1969-74) 3.1
Fifth plan (1974-79) 4.9
Annual plans (1979-80) -6.0

17. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
TRENDS IN NATIONAL INCOME IN
POST INDEPENDENCE ERA
Five year plan In per cent
Sixth plan (1980-85) 5.4
Seventh plan (1985-90) 5.5
Two annual plans (1990-92) 3.1
Eighth plan (1992-97) 6.7
Ninth plan (1997-2002) 5.3
Tenth plan (2002-2007) 7.8

18. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
CHANGES IN OCCUPATIONAL
STRUCTURE IN INDIA
• Occupational structure refers to the distribution
of working force into various sectors of economic
activity.
1. Primary sector includes agriculture and allied
activities like fisheries, poultry, dairy farming
etc.
2. Secondary sector includes manufacturing
industry both ( organized and unorganized) and
construction activity.
3. Tertiary sector includes transport, storage,
communication, trade and commerce etc.

19. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
CHANGES IN OCCUPATIONAL
STRUCTURE IN INDIA
Occupational distribution of working population
in India (in percentage)
Sectors 1951 1971 1991 2001-02 2004-05 2007-08
Primary
sector
72.1 72.1 66.8 60.4 58.4 55.9
Seconda
ry sector
10.7 11.2 12.7 15.8 18.2 18.7
Tertiary
sector
17.2 16.7 20.5 23.8 23.4 25.4
Total 100 100 100 100 100 100