|
Economic Development
|
Economic Growth
|
|
|
Implications:
|
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.
|
|
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.
|
|
Effect:
|
Brings qualitative and quantitative changes in the economy
|
Brings quantitative changes in the economy
|
|
Concept:
|
Normative concept
|
Narrower concept than economic development
|
|
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.
|
***********************************************************
Jagdish Bhagwati v/s Amartya Sen debate
(Although , I believe ...that this type of debate has been
glamourised by MEDIA.and have gave a political colours to it ....but still v wl see what it is all about ! ...since v r UPSC
Aspirants )
Amartya Sen and Jagdish Bhagwati, tackling each other on
what India’s governance priorities should be.
Sen is a Nobel Prize winner in economics and a professor of
economics and philosophy at Harvard University.
Bhagwati is a Columbia
University professor of economics, who has been nominated for the top honour
several times. Along with Sen and Avinash Dixit, he is considered to be among
the three greatest Indian economists ever.
- While Sen believes
that India should invest more in its social infrastructure to boost the
productivity of its people and thereby raise growth.
- Bhagwati
argues that only a focus on growth can yield enough resources for
investing in social sector schemes.
- Investing in health
and education to improve human capabilities is central to Sen’s scheme of
things. Without such investments, inequality will widen and the growth
process itself will falter, Sen believes.
- Bhagwati
argues that growth may raise inequality initially but sustained growth
will eventually raise enough resources for the state to redistribute and
mitigate the effects of the initial inequality.
---------------------------
Kerala
Vs Gujarat
·
The Bhagwati-Panagariya duo argues that whatever Kerala
had achieved was thanks to a growth-oriented approach. They suggest that
Kerala's high social indicators have much less to do with the so-called Kerala
model, and more to do with global trade, growth-oriented policies and
private-sector participation. "To keep asserting such causality [Sen's
argument] is the mark of a lazy intellect and is, besides, dangerous in its
potential for misleading us to make harmful policy choices,"
·
But many economists argue that this amounts to
misrepresentation of facts. Says Suresh Babu, a professor of economics at IIT
Madras: "In the current debate we need to be careful to not confuse
between 'levels' and 'rates of change'. Professor Bhagwati focuses more on
rates of change, while Sen argues that levels matter. For Gujarat some recent
rates of change might look impressive, as it is on a small base, while for
Kerala even incremental changes on high levels are impressive as they are
difficult to come by."
*******************************************************
