INDIAN ECONOMY- ECONOMIC GROWTH. ECONOMIC DEVELOPMENT. ECONOMIC GROWTH VS ECONOMIC DEVELOPMENT INDICATORS OF ECONOMIC GROWTH INDICATORS OF ECONOMIC DEVELOPMENT FACTORS IN ECONOMIC DEVELOPMENT

1. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Affiliated Institution of G.G.S.IP.U, Delhi
BBA(G)
INDIAN ECONOMY
17203
By
Reena yadav

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