ECONOMIC DEVELOPMENT

DEFINITION OF ECONOMIC DEVELOPMENT

“Development concerns with not only man’s material needs but also the
improvement of the social conditions of his life. Development is, therefore not
only economic growth but also growth plus change-social, cultural, institutional and
economic”. – UNITED NATIONS EXPERT COMMITTEE
“Development must be conceived as a multi-dimensional process involving
major changes in social structure, popular attitudes and national institutions as
well as the acceleration of economic growth, the reduction of inequality and the
eradication of poverty”. – MICHAEL P.TODARO
In simple terms, Michael defined economic development as increase in
living standards, improvement in self-esteem needs and freedom from oppression
as well as a greater choice.
“An innovative process leading to the structural transformation of social
system”. – John Friedmann
 MEANING OF ECONOMIC DEVELOPMENT

Economic development is economic growth

accompanied with positive and progressive
changes in socio economic structure of a
country. These changes refer to socio change ,
cultural change, political change, economic
change, institutional change which enrich the
living standards of people. It includes
development in all spheres. It does not mean
increase in real per capita income but also
includes economic and non economic factors. It
is social well being of people in a country.
 NECESSARY FEATURES FOR A COUNTRY’S DEVELOPMENT

• Better provision of education

• Better medical facilities and infrastructure
• Technology upgradation
• Equitable distribution of resources
• Reduction of poverty, illiteracy, unemployment
• Basic needs for people of a country
• Life expectancy rate
• Faster growth of industrial sector
• Social justice, fundamental rights for people
• Balanced regional development
• Less population
• Rise in efficiency of factors of production
• Higher savings and investments of people
• Improvement in technique
• Positive changes in attitudes towards work
Conservation of the environment

These are the factors indicating

development in a country. It includes economic and
non-economic factors, quality and quantitative
factors. All the facilities provided to the people of the
country should be of high quality. Nice quality leads to
more quantity of output of goods and services .
 NATURE OF ECONOMIC DEVELOPMENT

It is both qualitative & and quantitative aspect. It is wider concept

and normative concept. Its link is not only with an increase in income
but also with the well being of the economy.The most accurate method
of development is quality of human resources which takes into account
various factors. Quality of resources play a vital role since it indirectly
affects economic growth. It leads to more employment opportunities,
and increase in per capita income. Economic growth Simply doesn't
mean increase in per capita income, there should be equal distribution
of income i.e reduction in inequalities of income. Economic growth and
economic development are dependent process. Economic development
refers to the problems of underdeveloped countries.
 STRUCTURAL CHANGES IN
ECONOMIC DEVELOPMENT
Structural changes is shift or change in the basic ways a market or
economy functions or operates. Occupational structure refers to
aggregate distribution of occupations in society classified according to
skill level, social status etc.
In economic development there will be decrease in the share of
labour force in primary sector and increase in share of labour force in
secondary and service sector. Occupational structure refers to shift
from one Sector to another sector. Agriculture is predominant in
developing countries. There is need of occupational Structure in
developing economies.
1.STRUCTURE OF NATIONAL OUTPUT
National output refers to value of all final goods
and Services produced in a country within a fiscal year by
all the sectors of economy. The contribution of primary
sector in national output falls and shares of secondary
sector and service sector slowly go up.

2.STRUCTURE OF INDUSTRIAL
PRODUCTION
Industrial production is a measure of output of
industrial sector of economy. It contributes a small
portion of GDP. There will be increase in production of
capital goods and also consumer goods.
3.STRUCTURE OF FOREIGN TRADE
Foreign trade of a country consists of inward and outward
movement of goods & services from one country to another country.
The share of primary goods in exports decreased and share of capital
goods in imports increased. In economic development there will be
increase in exports of manufactured and final goods and decrease in
imports of consumer items. Agricultural exports are always given
importance.

4.STRUCTURE OF MODERNIZATION
Technology is the application of scientific
knowledge for practical purposes. It helps produce things
faster with better quality. Modern and advanced techniques
of production are used in all sectors of economy Technology
upgradation is important feature because it improves
quality and competitiveness of industry.
5.SOCIAL AND INSTITUTIONAL SECTORS
Social and institutional sector play a vital role for welfare and well-
being of people. There will be increase in self esteem and living standards
of population.
ECONOMIC DEVELOPMENT= ECONOMIC GROWTH+CHANGE

CHANGE

QUALITATIVE QUANTITATIV
CHANGE E CHANGE

IMPROCEMENT IN LEVEL
INCREASE IN
OF LIVING,FASTER
GDP,GNP,PER
GROWTH OF
CAPITA INCOME
INDUSTRIAL SECTOR