Page 11 - DECO501_ECONOMICS_OF_GROWTH_AND_DEVELPOMENT_ENGLISH

Unit 1: Economics of Growth and Development: Meaning, Measurement, Difference and Comparisions

4. Economic growth is easy to realize as only monetary aspect is involved. But, it is very difficult Notes
to attain the goal of development as it involves many socio-economic-political aspects.
5. Economic growth can easily be estimated by real GDP or Real Per Capital income. But it is very
difficult to measure development as it has some aspects that can’t be quantified. Economic
development however is indicated by Human Development Index.
6. Economic growth can take place without Economic development; however, economic
development can’t take place without economic growth.
The difference between extensive and intensive growth can be summarized as below :
1. Extensive growth refers to growth in total output level of an economy. Intensive growth refers
to increase in per capita level of the output.
2. If output takes a jump due to unexpected one time force, it is called extensive growth. If there
is continuous expansion in output due to some positive change over time, it is called intensive
growth.
3. Extensive growth is temporary and short lived. However intensive growth is permanent and
has long lasting effects.
4. Extensive growth is relevant to study aggregative phenomenon such as economies of scale.
Intensive growth is relevant to study the increase in standard of living of the people of a
country.

There is no doubt that the performance of Indian economy has improved a lot and
is superior to many other countries of the world.

1.6 Comparison of Economic Growth and Economic Development

Economic Development Economic Growth
Concept: Normative concept Narrowed concept than economic
development
Scope: Concerned with structural changes Growth is concerned with increases
in the economy in the economy’s output
Growth: Development relates to growth of Growth relates to a gradual increase
huma capital indexes, a decrease in in one of the components of Gross
inequality figures, and structural Domestic Product: consumption,
changes that improve the general government spending, investment,
population’s quality of life net exports
Implication: It implies changes in income, It refers to an increase in the real
saving and investment along output of goods and services in the
with progressive changes in country like increase the income in
socio-economic structure of savings, in investment etc.
country (institutional and
technological changes)
Measurement: Qualitative. HDI (Human Quantitative Increase in real GDP.
Development Index), Shown in PPF.
gender-related index (GDI),
Human poverty index (HPI), infant
mortality, literacy rate etc.
Effect: Brings qualitative and quantitative Brings quantitative changes the
changes in the economy economy

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