Economic Growth vs Development
Notes
Economic growth is a quantitative increase in a country's real output, national income or per capita income over time (measured by the growth rate of real GDP). Economic development is a broader, qualitative concept: improvements in living standards, health, education, income distribution, freedom and sustainability.
Basis | Economic growth | Economic development |
|---|---|---|
Nature | Quantitative | Quantitative and qualitative |
Scope | Narrow (income and output) | Broad (human well-being, equity, institutions) |
Measure | Real GDP, per capita GDP | HDI, MPI, Gini coefficient, SDG indices |
Time | Short to medium term | Long term |
Relation | Necessary, but not sufficient | Includes growth and goes beyond it |
Key ideas and measures
- Amartya Sen: development is freedom and the expansion of human capabilities.
- Human Development Index (HDI): published by the UNDP (Mahbub ul Haq, 1990). Dimensions: a long and healthy life (life expectancy at birth), knowledge (mean and expected years of schooling) and a decent standard of living (GNI per capita, PPP); a geometric mean is used. India ranks in the "medium human development" group, around the 130th position.
- Multidimensional Poverty Index (MPI): by the UNDP and Oxford (OPHI); NITI Aayog publishes India's National MPI (health, education and standard of living; 12 indicators). It shows a sharp decline in multidimensional poverty over the last decade.
- Others: Gender Inequality Index, Gender Development Index, Gini coefficient (inequality), Physical Quality of Life Index.
- Kuznets curve: an inverted-U relationship between inequality and per capita income.
- Inclusive growth (growth that reaches all sections), sustainable development (Brundtland Report, 1987; SDGs, 2015: 17 goals under the 2030 Agenda) and Gross National Happiness (Bhutan).
- Jobless growth: output rises without employment growth.
Key Points
- Growth is quantitative; development is broader and includes human well-being.
- HDI: health, education, income (UNDP; Mahbub ul Haq).
- Amartya Sen: development as freedom.
- MPI measures non-income poverty.
- SDGs: 17 goals; Agenda 2030.
MCQs
Q1. The Human Development Index is published by the:
(a) World Bank
(b) UNDP
(c) IMF
(d) WTO
Ans: (b) .
Q2. Which of the following is NOT a component of the HDI?
(a) Life expectancy
(b) Education
(c) Per capita income
(d) Poverty gap
Ans: (d) .
Q3. The concept of "development as freedom" is associated with:
(a) Amartya Sen
(b) Simon Kuznets
(c) Mahbub ul Haq
(d) Adam Smith
Ans: (a) .