Project Work

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this docuement provides an analytical study of economic development
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    PROJECT WORK E CONOMIC D EVELPOMENT   S UBMITTED T O : S UBMITTED B Y : Mr. Mohit Vikrant Ahlawat(16ru12020) Assiatant Professor Scholar  I NTRODUCTION   Economic development is the primary objective of the majority of the world’s nations. This truth is accepted without controversy, or so it would appear in public discourse at least. Raising the well-being and socioeconomic capabilities of peoples everywhere is easily the most crucial social task facing us today. Every year, aid is disbursed, investments are undertaken, policies are framed, and elaborate plans hatched to achieve this goal, or at least to get closer to it. How do we identify and track the results of these e ↵ orts? What criteria do we use to evaluate the extent of “development” a country has undergone or how “developed” or “underdeveloped” a country is at any point in time? How do we measure devel opment? The issue isn’t easy to resolve. We all have intuitive notions of ”development.” Presumably, when we speak of a developed society, we have in mind a world in which people are well fed and well clothed, have access to a variety of goods and services, possess the luxury of leisure and entertainment, and live in a healthy environment. We think of a society free of violent discrimination, with tolerable levels of equality, where the sick receive proper medical care and people do not have to sleep on the sidewalks. In short, most of us would insist that a minimal requirement for a “developed” nation is that its physical quality of life be high, uniformly so rather than restricted to an incongruously Aquent minority. Of course, the notion of a good society goes further. We might stress political rights and freedoms, intellectual and cultural development, stability of the family, a low crime rate, social civility and so on. However, a high and widely accessible level of material well-being is probably a prerequisite for most other kinds of advancement, quite apart from being a worthy goal in 1 Economists and policy makers therefore do well (and have enough to do!) by concentrating on this aspect alone. It is, of course, tempting to suggest that the state of material well-being of a nation is captured quite accurately by its per capita gross national income (GNI): the per person value of income earned  by the people of a country over a given year. (Or one might invoke its close cousin, gross domestic  product, GDP, which restricts itself to domestically produced income, and ignores net income received from other countries, such as dividends, interest or repatriated profits.) Indeed, since economic development at the national level was adopted as a conscious goal there have been long  phases during which development performance was judged exclusively by the yardstick of per capita income growth. In the last few decades, this practice increasingly has come under fire from various quarters.    C ONCEPT   The earliest concept of development was interpreted in terms of growth of output over time and later in terms of per capita output. The terms growth and development were used interchangeably. During 1950 and 1960s many developing countries realized their economic growth targets but standard of living of the people did not change. In fact existence of mass poverty, illiteracy and ill health continued to plague the developing countries. This implied that there was something wrong with this definition of economic development. Most of the economists clamored for dethronement of GNP and define development in terms of removal of poverty, illiteracy, disease and changes in the composition of input and output, increase in per capita output of material goods. Increase in output of goods and services and in income does not imply an improvement in the standard of living of the people because GDP is a narrow indicator of economic development that does not include non-economic indicators such as leisure time, access to health, education, environment, freedom or social justice Economic development is thus a multivariate concept; hence there is no single satisfactory definition of it. Economic development is a process where low income national economies are transformed into modern industrial economies. It involves qualitative and quantitative improvements in a country’s economy. Political and social transformations are also included in the concept of economic development in addition to economic changes. Literally, economic development can be defined as “passage from lower to higher stage which implies change”. Charles P. Kindleberger and Bruce   Herrick (1958) point out: “Economic development is generally defined to include improvements in material welfare especially for persons with the lowest incomes, the eradication of mass poverty with its correlates of illiteracy, disease and early death, changes in the composition of inputs and output that generally include shifts in the underlying structure of production away from agricultural towards industrial activities, the organization of the economy in such a way that productive employment is general among working age population rather than the situation of a privileged minority, and the correspondingly greater  participation of broad based groups in making decision about the direction, economic and otherwise, in which they should move their welfare”.    Consequently in the words of Meier (1964), “economic development is a process whereby an economy’s real national income increases over a long period of time”. This definition fails to take into account the changes in the growth of population. If a rise in real income is accompanied by faster growth in population there will be no economic development but retardation. Thus, some economists define economic development in terms of an increase in per capita income. Drewnewski (1966) defines development in terms of economic and social welfare, “In the standard of living of people economic development is supportive and it involves increased per capita income and creation of new opportunities in education, healthcare, employment sectors. Development is of limited significance if it does not lead to economic welfare. Economic development implies increased per capita income and reduced income inequalities and satisfaction of the people as a whole”. In 1970’s redistribution from growth became a common slogan. Dudley Seers (1972) raised the basic question about the meaning of development succinctly when he asserted questions about a country’s development, such as   “what has been happening to poverty? What has been happening to unemployment? What has been happening to inequality? If all three of these have declined from high levels, then beyond this constitutes period of development for the country concerned. If one or two of these central problems have been growing worse, especially if all three have, it would be strange to call the result development even if per capita income doubled”. Further, for understanding the meaning of development Goulet (1971) consider  s three core values as an important basis and guideline: 1.   Life Sustenance:  The ability to meet basic needs: There are some basic needs (food, shelter, etc.) that are essential for improvement in the quality of life. So the basic function of economic activity is to overcome people from misery arising from shortage of food, shelter. 2.   Self-esteem:  A second universal component of the good life is self-esteem. Self-esteem refers to self-respect and independence and for development of a country it is an essential condition. Developing countries need development for self-esteem to eliminate the feeling of dominance. 3.   Freedom:  A third universal value is the concept of freedom. Freedom here is understood as a fundamental sense of release from freedom, freedom from misery, institutions and dogmatic beliefs. It refers to freedom from three evils of want, ignorance and squalor.
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