IGNOU Assignment Answers 2021, economic growth & economic development

Explain the major conceptual differences between the ideas of ‘economic growth and ‘economic development. In light of this, do you support the view that ‘growth of an economy is a necessary but not sufficient ‘condition for development’?


Economic Growth
Economic Growth is the positive change in the indicators of the economy.
Economic Growth refers to the increment in the number of goods and services produced by an economy.
Economic growth means an increase in real national income / national output.
It refers to an increase over time in a country’s real output of goods and services (GNP) or real output per capita income.
Economic growth focuses on the production of goods and services.
Economic growth relates to a gradual increase in one of the components of GDP; consumption, government spending, investment, or net exports.
Economic Development
Economic development is the quantitative and qualitative change in an economy.
Economic development refers to the reduction and elimination of poverty, unemployment, and inequality with the context of a growing economy.
Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life expectancy, and health care.
Economic development includes processes and policies by which a country improves the social, economic, and political well-being of its people.
Economic development focuses on the distribution of resources.
Economic development relates to the growth of human capital indexes and a decrease in inequality. 

Economic Growth is a narrower concept that relates to an increase in a country’s real level of national output which can be caused by an increase in the quality of resources such as, education level, increase in the number 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. On the other hand Economic development is a broader concept i.e. it applies in the context of people’s sense of morality.

It relates to an increase in living standards, improvement in self-esteem needs, and freedom from oppression as well as a greater choice. 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.

Economic growth is essential for a country, but it cannot alone serve for economic development. It requires political/people and administrative will to bring structural, institutional, and technical changes to achieve sustainable growth to bring economic development.

Further economic growth can be easily measured from a country’s GDP, but GDP does not define economic development because it does not provide individual living conditions details or purchasing power capacity of an individual.

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