Economic Growth

Economic growth is the process of sustained increase in real national and per capita income over a long period of time. Economic growth is measured by rate of change of gross domestic product. The gross domestic product (GDP) is a measure of a country's overall economic output.

Economic Development
Economic development is the process whereby the real per capita income of a country increases over a long period of time subject to the stipulations that the number of people below an absolute poverty line does not increase, and the distribution of income does not become more unequal. Its scope includes the process and policies by which a nation improves the economic, political, and social well-being of its people. Economic development typically involves improvements in a variety of indicators such as literacy rates, life expectancy, and poverty rates.

Distinction between Economic Growth and Economic Development

1. Economic growth refers to quantitative change by emphasizing increase in GNP over a long period of time while economic development involves both a quantitative as well as qualitative concept. Development involves increase in GNP as well as change in the way it is produced and distributed.

Economic growth always results from economic development, but economic development may not result from economic growth if with increase in GNP there are no institutional, organizational and distributional changes.
2.

Economic growth is a concern of advanced countries who have fully developed techniques and production methods and known and developed natural resources. Economic development involves discovery of new resources, adopting modern technology and tapping new sources of supply. Thus, economic development is a major issue before the underdeveloped countries who need all kinds of adjustments and changes for growth in GNP and ensuring better life for the people.
3.

4. Economic growth takes place both in developed as well as underdeveloped countries. But growth process is easier for the advanced countries. However, in the underdeveloped

countries the growth rate may be achieved with great efforts through massive structural and institutional changes. Thus economic development of underdeveloped countries involves more intensive efforts to achieve a given rate of economic growth than is required by the advanced countries.

Three core values of Economic Development

The concept of economic development encompasses the major economic and social objective as well as the values that constitute a better and more humane life. Therefore there are three basic or core values of economic development. These are:1. Life sustenance 2. Self- Esteem 3. Freedom from Servitude All these three values relate to fundamental human needs and thus constitute the goal to be achieved by all societies and nations

Life Sustenance :The Ability to Meet Basic Needs

Life sustenance is concerned with the provision of basic needs. Basic human needs include food, clothing, shelter, health etc. A major objective of economic development is to lift people out of poverty and provide them with most basic needs to improve their quality of life. Absence of access to all these basic need would mean underdevelopment.

Self-Esteem
Self esteem is concerned with the feeling of worth, self-respect, and independence. Economic development aims at raising the level of living in addition to higher income, better education ,provision of more goods which will serve not only to enhance material well-being but also to generate individual and national self- esteem.

Freedom From Servitude: To be Able To Choose

Economic development aims at expanding the range of economic and social choices to individuals and nation by freeing them from servitude and dependence not only in relation to other people, nation and state but also from dogmatic beliefs and outdated institutions so that individuals are free to make choices.

Per Capita Income As A Measure Of Economic Development

Since the basic objective of economic development is to bring all-round improvements in standard of living of the masses, an increase in real national income in the face of rapid increasing population is not considered as an improvement because increased national income get distributed among increased number of people. therefore real per capita income is considered as measure of economic development.

Per capita income= Real national income/ Total population

An increase in real per capita income over a long period of time means that a nation is expanding its output at a rate faster than the growth rate of population. A steady growth of real per capita income is indicative of improvements in standard of living of people and their overall economic betterment. But there are certain limitations of per capita income as an index of economic development.

Limitations
Some of the limitations in using per capita income as an index of economic development are:1. It excludes all non- marketed goods and services, even though they be important for human happiness and better quality of life. 2. It also ignores the way of income distribution as most of the increased income would go to richer sections of society who own the means of production and make profits from increasing investments opportunities .As a result income may rise, but poor people may get completely bypassed and thus register no increase in their real income. 3. The use of modern capital intensive technology in production may increase output and lead to rise in GNP but it causes unemployment or does not add to employment .therefore we cant ensure improvement in living standards and unemployment even when per capita income rising. 4. The composition of output may not correspond with the needs of poor because market forces are driven by the needs of rich i.e. those who have money and can pay for goods .Thus poor may not get what they need. 5. Further an increase in GNP may achieved through increase in working hours of the labour force which involve extra trouble and sacrifice of leisure. This may adversely

affect labour capacity to enjoy life and thus reduce welfare and happiness of working class which is not reflected in increased GNP. All these factor may result in increased GNP without much change in living standard and quality of life of poor which is one of the important objective of economic development .Therefore we must look beyond aggregate measure of per capita income and consider quality of life as other indicator of economic development.

MEASUREMENT OF ECONOMIC DEVELOPMENT Physical Quality of Life Index (PQLI)

The Physical Quality of Life Index (PQLI) is an attempt to measure the quality of life or wellbeing of a country. It comprises of three indicators, viz. , 1. Infant mortality rate, 2. Life expectancy at the age of 1 and 3. Literacy rate. Infant mortality rate is a good index of availability of sanitation and clean drinking water as infants are most affected by in sanitary conditions and water borne diseases. Life expectancy indicates the extent of nutrition and health care services. Literacy rate is indicative of the progress of education. Thus, all these taken together reflect the extent to which basic needs are being fulfilled leading to betterment in quality of life. It was developed for the Overseas Development Council in the mid-1970s by Morris David Morris, as one of a number of measures created due to dissatisfaction with the use of GNP as an indicator of development. PQLI might be regarded as an improvement but shares the general problems of measuring quality of life in a quantitative way. It has also been criticized because there is considerable overlap between infant mortality and life expectancy.

Performance in each of these spheres, viz., Infant mortality, Expectancy of life and Basic Literacy rate is measured on a scale of 1 to 100. For example, in the case of infant mortality, the highest performance (viz., a rating of 100) is assigned to a mortality rate of 9 per 1000 and the lowest rating of 1 is given to a rate of 229 per 1000. For expectancy of life, the upper limit of 100 was assigned to 77 years and the lowest limit of 1 was assigned to 28 years. Within these limits of 28 to 77 years, each country was assigned a rating from 1 to 100. Thus an average expectancy of life of 52 years is assigned a rating of 50. Literacy rates are measured in terms of percentage of literate population to total population (excluding children in the age group 0-6 years) so that zero percentage shows total illiteracy and 100 represents hundred percent literacy rate. A simple average of these 3 ratings is computed to arrive at the composite index of quality of life known as Physical Quality of Life Index (PQLI). Various studies have shown that in general countries with low per capita GNP have low PQLI and the quality of life index was higher in high per capita GNP nations. But this correlation between PQLI and level of per capita GNP was not very strong or close. Some countries with very high per capita GNP had low PQLI while others with low per capita GNP had high PQLI. This shows that movement to higher levels of per capita GNP in the under developed countries is not a guarantee of better quality of life or conversely improvements in quality of life can be achieved before there is any great increase in the level of per capita GNP The UN Human Development Index is a more widely used means of measuring well-being. Steps to Calculate Physical Quality of Life: 1) Find percentage of the population that is literate (literacy rate). 2) Find the infant mortality rate. (Out of 1000 births) INDEXED Infant Mortality Rate = (166 - infant mortality) 0.625 3) Find the Life Expectancy. INDEXED Life Expectancy = (Life expectancy - 42) 2.7 4) Physical Quality of Life = (Literacy Rate + INDEXED Infant Mortality Rate + INDEXED Life Expectancy) 3

The Human Development Index (HDI)

The Human Development Index (HDI) is the latest and most comprehensive index of socioeconomic development formulated by the United Nations Development Programme (UNDP) and is annually published in the United Nations Human Development Reports.

The Human Development Index is a composite statistic used to rank all countries by level of "human development" and separate developed (high development), developing (middle development), and underdeveloped (low development) countries on a scale of 0 to 1. The HDI index is based on three measures, which are the goals or end products of developmental efforts.

These three components of HDI are:

1. Longevity of life as measured by the life expectancy at birth.

2. Knowledge which is measured by the weighted average of the adult literacy and mean years of schooling. 3. Standard of living as measured by the real per capita income adjusted for differences in purchasing power of each currency in its country to reflect cost of living.

Using the three measures of development the UNDP has computed the HDI through some complex formula, and used it for ranking various countries on a scale of 0 to1. Those countries which have the HDI between 0.0 to 0.50 are ranked in the category of low human development. An HDI of 0.51 to 0.79 places countries in the category of medium human development. And those which have HDI between 0.80 and 1.0 are ranked as high in human development.

The Human Development Index (HDI), being based on goals or end products of development (viz., longevity, knowledge and living standards) focuses on the ends of developmental efforts rather than the means to achieve these ends as in the case with the traditional measure of development, viz. , per capita GNP. A study of various countries also shows that countries with similar per capita GNP can have significantly difference HDI depending upon how that income is used. HDI when used in conjunction with the traditional measure of development, viz., GNP per capita, gives a more comprehensive picture of socio-economic development achieved by various developing countries.

Human Development in India

Level of human development in India can be described as low to medium.

In 1992, the HDI for India was 0.439, thus placing it in the low rank of human development. Nearly a decade later in 2001, the HDI improved to 0.590 thus placing the country in lower middle category of human development.

List of countries by Human Development Index

This is a list of all countries by Human Development Index as included in a United Nations Development Program's Human Development Report released on 5 October 2009, compiled on the basis of data from 2007. It covers 180 UN member states . World map indicating the Human Development Index (based on 2007 data, published on 5 October 2009)

0.950 & over 0.900 0.7000.749 0.650 0.949 0.8500.899 0.699 0.6000.649 0.8000.849 0.7500.799 0.5500.599 0.500 0.549

0.4500.499 0.4000.449 0.3500.399 under 0.350 Data unavailable

It is used to distinguish whether the country is a developed, a developing or an under-developed country, and also to measure the impact of economic policies on quality of life. The index was developed in 1990 by Pakistani economist Mahbub ul Haq and Indian economist Amartya Sen. Countries fall into four broad human development categories based on their HDI: Division Very high Numerical range of HDI 1.000 0.900 Map legend color

High Medium Low

0.900 0.800 0.800 0.500 0.500 0.000

Starting in the report for 2007, the first category is referred to as developed countries, and the last three are all grouped in developing countries. The original "very high human development" (0.8 to 1) has been split into two as above in the report for 2007. Presently India comes into the category of Medium human development i.e. , developing countries. Indias ranking is 134 among nearly 182 countries in terms of the Human Development Index for the year 2009. The fact that Indias rank is extremely low is a matter of concern and it is clear that there is need for rapid improvement in the social sector.

SUSTAINABLE DEVELOPMENT
Sustainable development is maintaining a delicate balance between the human need to improve lifestyles and feeling of well-being on one hand, and preserving natural resources and ecosystems, on which we and future generations depend. Consumption of resources More than nature's ability to replenish Equal to natures ability to replenish State of environment Environment Degradation Environmental equilibrium Environmental equlibrium Not sustainable Steady state economy Environmentally sustainable

Less than natures ability Environmental renewal to replenish

The term "sustainable development" was popularized in 1987 by The Brundtland Commission, formally the World Commission on Environment and Development (WCED). The term was used by the Commission which coined what has become the most often-quoted definition of sustainable development as development that "meets the needs of the present without

compromising the ability of future generations to meet their own needs." It refers to a systematic approach to achieving human development in a way that sustains planetary resources, based on the recognition that human consumption is occurring at a rate that is beyond Earth's capacity to support it. Population growth and the developmental pressures spawned by an unequal distribution of wealth are two major driving forces that are altering the planet in ways that threaten the long-term health of humans and other species on the planet. International documents that include the environmental aspect of development affirm and reaffirm that "human beings are at the centre of concern for sustainable development. They are entitled to a healthy and productive life in harmony with nature". As the goal of sustainable development is to permanently improve the living conditions of human beings, social and economic developments must be carried out in a way that is environmentally and ecologically sound; ensuring the continual rejuvenation and availability of natural resources for future generations. What is Sustainable Development? Sustainable development does not focus solely on environmental issues.The United Nations 2005 World Summit Outcome Document refers to the "interdependent and mutually reinforcing pillars" of sustainable development as economic development, social development, and environmental protection.The right to development implies the right to improvement and advancement of economic, social, cultural and political conditions. Improvement of global quality of life means the implementation of change that ensures every person a life of dignity; or life in a society that respects and helps realize all human rights. These changes must include the eradication and alleviation of widespread conditions of poverty, unemployment, and inequitable social conditions. Sustainable development ensures the well-being of the human person by integrating social development, economic development, and environmental conservation and protection.

Social development
Implies that the basic needs of the human being are met through the implementation and realization of human rights. Basic needs include access to education, health services, food, housing, employment, and the fair distribution of income. Social development promotes democracy to bring about the participation of the public in determining policy, as well as creating an environment for accountable governance. Social development works to empower the poor to expand their use of available resources in order meet their own needs, and change their own lives. Special attention is paid to ensure equitable treatment of women, children, people of indigenous cultures, people with disabilities, and all members of populations considered most vulnerable to the conditions of poverty. The Universal Declaration on Cultural Diversity (UNESCO, 2001) further elaborates the concept by stating that "...cultural diversity is as necessary for humankind as biodiversity is for nature; it becomes one of the roots of development understood not simply in terms of economic growth, but also as a means to achieve a more satisfactory intellectual, emotional, moral and spiritual existence". In this vision, cultural diversity is the fourth policy area of sustainable development.

Economic development
Expands the availability of work and the ability of individuals to secure an income to support themselves and their families. Economic development includes industry, sustainable agriculture, as well as integration and full participation in the global economy. Social and economic developments reinforce and are dependent on one another for full realization. Economic Sustainability: Agenda 21, (a set of proposals, made at the 1992 UN Conference on Environment and Development for the furtherance of world-wide, sustainable development, it sets out environmental strategies for the management of coasts, oceans, and water, the monitoring and reduction of chemical waste, the eradication of radioactive waste, and the conservation of natural vegetation and soils. This last proposal links with plans for the development of sustainable farming, and other socio-economic proposals include measures to improve health care, to reduce poverty, and to develop fair and environmentally friendly trade policies.) Agenda 21 clearly identified information, integration, and participation as key building blocks to help countries achieve development that recognises these interdependent pillars. It emphasizes that in sustainable development everyone is a user and provider of information. It stresses the need to change from old sector-centred ways of doing business to new approaches that involve cross-sectoral co-ordination and the integration of environmental and social concerns into all development processes.

Active participation
In sustainable development ensures that those who are affected by the changes are the ones determining the changes. The result is the enjoyment and sharing of the benefits and products generated by the change. Participation is not exclusive, ensuring equitable input, selfdetermination and empowerment of both genders and all races and cultural groups. Furthermore, Agenda 21 emphasises that broad public participation in decision making is a fundamental prerequisite for achieving sustainable development It is impossible to separate the well-being of the human person from the well-being of the earth. Therefore truly sustainable development places just as much importance on the protection and of the earth and the earth's resources. Human health is dependent on the healthy functioning of the earth's ecosystem.

Limitations and Criticisms:

During the last ten years, different organizations have tried to measure and monitor the proximity to what they consider sustainability by implementing what has been called sustainability metrics and indices. Sustainable development indicators (SDI) have the potential to turn the generic concept of sustainability into action. Though there are disagreements among those from different disciplines (and influenced by different political beliefs about the nature of the good society), these disciplines and international organizations have each offered measures or indicators of how to measure the concept. While sustainability indicators, indices and reporting

systems gained growing popularity in both the public and private sectors, their effectiveness in influencing actual policy and practices often remains limited. Sustainable development is said to set limits on the growth in developing world. While current first world countries polluted significantly during their development, the same countries encourage third world countries to reduce pollution, which sometimes impedes growth. Some consider that the implementation of sustainable development would mean a reversion to premodern lifestyles. Sustainable development requires alterations in the lifestyle of the wealthy to live within the carrying capacity of the environment. Others have criticized the overuse of the term: "[The] word sustainable has been used in too many situations today, and ecological sustainability is one of those terms that confuse a lot of people. You hear about sustainable development, sustainable growth, sustainable economies, sustainable societies, sustainable agriculture. Everything is sustainable (Temple, 1992)."

Factors in development
Economic development is a complex phenomenon. It involves changes in the level and structure of production, as well as distribution of national income, reduction in poverty and unemployment along with sustained long term increase in real and per capita income. It also involves changes in social attitude and behaviours; a change away from traditional conservative outlook to modern rational thinking and behaviour pattern. Achievement of these socio-economic objectives requires mobilization and deployment of huge amounts of resources in the form of large scale capital investments in various fields of economic activity, improvement in technology and increase in productivity. Apart from huge investments of physical capital, it requires investment in human resources or formation of human capital. Development also depends upon social attitudes, political conditions, cultural, traditional and historical events.

Economic factors Natural resources

Availability of natural resource in abundant is an important factor in a countrys economic development. Resources like land, water, minerals, forests and vegetation are essential for stepping up countrys production and rate of economic development. The actual and potential quantum of natural resources, largely puts the upper limit to a countrys economic growth. The contemporary developed countries like the USA, Canada, Australia, New Zealand etc., have abundance of natural resources. However, it does not mean that all these countries that have natural resources in abundance, are among the developed or advanced nations. Many countries in South America and Africa have abundant natural resources and yet they continue to be poor underdeveloped countries. This is because, in spite of having such resources in abundance, they have not been able to make their fuller use. Most of these resources have not been fully exploited due to absence of other necessary factors such as adequate supply of capital and adoption of modern technology. Thus abundance of natural resources can provide a base for rapid economic development, it can not guarantee such development in the absence of other essential factors.

 Supply of Capital
Adequate availability of capital is the most essential requisite of economic development. In all the contemporary advanced countries, high rate of capital formation or steady increase in supply of capital has played the most strategic role in the process of their development. Capital formation is the process by which a communitys savings are channelised into investments in capital goods such as plant, equipment and machinery that increases nations productive capacity and workers efficiency, thus ensuring a large flow of goods and services in a country. The process of capital formation implies that a community does not spend whole of its income on goods for current consumption, but saves a part of it and uses it to produce or acquire capital goods that greatly add to productive capacity of the nation. Thus capital formation involves 1. Savings i.e., a sacrifice on the part of community in the form of abstaining from consumption, 2. Mobilization of savings, i.e., making them available to those who want to make use of these resources for investment and 3. Investment, i.e., use of these resources in producing or acquiring capital goods, viz., machinery, equipment etc. Since domestic savings are quite low in most of the less developed countries, they are these days making increasingly greater use of foreign savings or foreign capital or foreign resources. To finance programmes of their development, the underdeveloped countries are supplementing their savings by borrowing from other countries and inviting foreign firms and Multinational Corporations to make direct investments in their country, which is called foreign capital or foreign direct investment. In case of India, we have been making use of both these foreign sources, viz., foreign aid as well as foreign capital.

Technical progress
Progress in science and technology is yet another factor that makes important contribution to economic development. Technical progress in simple words implies discovery or invention of new production methods and their application in various fields of activity to increase output and productivity. Present day developed countries owe much of their advancement to tremendous technological progress that has taken place over the past centuries. The USA, UK, France, Germany, Japan and other advanced industrial nations have all acquired their industrial strength from use of advanced technology developed from scientific progress and steady research and development. In agriculture too, use of modern technology has led to manifold increase in productivity. Use of modern technology has indeed revolutionized all spheres of economic activity, be it agriculture, industry, trade, transport or communication. The underdeveloped countries have generally lagged far behind in the use of modern technology. Lesser development in science and inadequate efforts in research and development of new technology have created technological backwardness in underdeveloped countries. But these countries can surely borrow, or purchase new technology from advanced countries and use it in their own industry and agriculture and then make rapid progress. But the adoption of new techniques and new

production methods requires huge amounts of investment to buy new equipment. Capital thus again becomes an important factor that inhibits or promotes development.

Entrepreneurship
In the contemporary advanced countries, entrepreneurship has made an immense contribution to their economic development. Entrepreneurship ability is regarded by many economists as the vehicle of development in the capitalist economies. Entrepreneurship refers to such characteristics as ability to find out new investment opportunities, willingness to take risks and make investments in these new and growing avenues of business and run the enterprises successfully. Entrepreneurship also implies ability to introduce new products, adopt new techniques, and discover new resources, exploration and development of new markets and successful management of business units. In underdeveloped countries, supply of entrepreneurship is limited and entrepreneurial class is very small in size. To set up the tempo of economic development, it is very necessary that supply of entrepreneurship is expanded by creating a favourable social, economic and economic atmosphere and suitable management training programmes. In the early stage of development, the government can itself undertake entrepreneurial responsibilities and undertake investment in new ventures. Over time, with adequate financial support and fiscal incentives to the private enterprise, the government can help in the growth of entrepreneurship in the country.

Human resource development

In the recent literature of economic development greater emphasis has been put on development of human capital or human resource development as an important contributor to countrys economic growth. The idea here is that human beings too need investment to be made in them; in their health education, training, nutrition, etc., to make them skilled efficient and responsible workers who can greatly contribute to development of the economy. Human resource development is the process of increasing the knowledge, the skills and the capabilities of the people that increases their productivity. This investment has to be made to develop human resources, to create an efficient and productive work force to increase nations production capacity in the same way as investment is made on machinery and equipment to enlarge nations productive capacity. In the same way as investment in machinery and equipment is called physical capital formation, investment in health, education, training and nutrition of the people can be termed as human capital formation. Nation with large stock of human capital such as Germany, Japan, etc., who have high quality trained manpower, engineers, scientists and skilled workers have made rapid progress. Thus human resource development must be given due emphasis in any programme that aims at rapid economic development.

Growth of population
History of economic development shows that periods of rapid population growth have also been periods of faster economic development in almost all these countries which now form the comity of advanced nations. In England the era of Industrial Revolution was also an era of rapid

population growth. Similar was the case with other Western European Countries. In Japan, too, rapid increase in population was observed during the period of economic development. It follows that population growth has some favourable effect on development process. Rapid population growth provides expanding market for goods and services. There is thus need for more population too meet wider demand. Rapid population growth also provides additional labour supply for work in industries demand for whose output has gone up. Thus, more labour produced larger output which a wider market absorbs. In this process, output, income and employment keep on rising and the economy moves on the developed path.

Non-Economic Factors Spread of Education :

Education plays an important role in human resource development, improves labour efficiency and thus contributes to economic development. Spread of education weaken the obstacles to development by removing mental blockade to new ideas and new knowledge. Vocational or technical education directly contributes to labour efficiency and improves productivity levels then contributing to economic development.

Desire for Material Betterment:

For economic development to take place, desire for material progress, i.e., desire to acquire and use more of goods and services is a necessary precondition. A society which does not have much desire for material goods or where spiritual values, self-denial and wantlessness are the cherished goods of life, not much material progress and economic development take place. In our traditional conservative religious society, economic incentives and rational calculations play very little role and thus keep the economy backward. The modern values such as pursuit of profits, acquisition of more and more material goods, grabing of incentives and economic opportunities contribute a great deal to rapid economic development.

Social Institutions:

Social Institutions like caste system, joint family system restrict occupational and geographical mobility and thus pore obstacles to economic development. These social institutions must therefore be changed for any significant economic development to gather momentum. Merit must be recognized and rewarded. Caste system which defines social status infirmities should be removed and a social structure based on individual family units rather than joint family system must be evolved to take advantage of incentives and rewards thrown up by the economic system thereby driving the country towards rapid economic development.

Political Conditions:

Political situation of a country has a great bearing on economic development. An unstable government and corrupt administration has a negative impact on investment and economic development. A democratic political system, stable government, honest administration, transparent policies and their efficient implementation, all develop confidence of investors in the political framework and stability of economic system. This, in turn, provides incentives for investment and attracts domestic as well as foreign capital that leads to faster economic development.

Economic Development = Economic Growth + Economic Change

Economic development is a wider concept than economic growth. Apart from growth of GNP it includes economic changes that are necessary to fulfill the wider objectives of ensuring more equitable income distribution, greater employment and poverty alleviation. In brief economic development includes growth plus change: change in the structure of output wherein nonagricultural output, changes in occupational structure, associated with changes in production structure, changes in institutional and organizational set-up, changes in allocation of resources in various lines of production, etc. Development also includes changes in attitudes of people that makes then more rational in behaviour and more modern in outlook. It includes improvements in material welfare, especially of persons with lowest incomes, eradication of mass poverty, illiteracy, disease and early death. According to Kindleberger, whereas economic growth merely refers to a rise in output, economic development implies a change in technological and institutional organization of production as well as distributive patterns of income. Thus, economic development is associated not merely with the phenomenon of increase in real GNP over a long period of time, but also leads to several other changes simultaneously. There are changes in factor supplies over a long period such as discovery of additional resources, increased capital formation, inventions and technological improvements, improvements in knowledge and skills and institutional and organizational changes. There are also changes in the structure of demand for goods and services as size and age composition of population changes; changes also take place in tastes and consumption patterns and there are changes in the pattern of income distribution. Changes also take place in attitudes and behaviour patterns of the people. Rationality in thinking, actions and choices replaces conservatism, planning of activities replaces ad hoc decisions, and efficiency and diligence take place of casual and indifferent attitudes towards work and economic activity. Thus whereas economic growth refers to expansion or more output, economic development means expansion (more output) as well as structural change

leading to increase in efficiency of the nation through changes in technical and institutional arrangements by which output is produced and distributed.