WHAT IS ECONOMIC DEVELOPMENT ?

 WHAT IS ECONOMIC DEVELOPMENT ?

Economic development is a fundamental goal of any nation. “Economic development” is the process of lifting a nation’s per capital consumption, production and income so that its people can enjoy the benefits of improved material wellbeing. The term economic development is comprehensive in its scope as compared to economic growth. The term ‘economic development signifies both economic growth as well as structural change in the economy. It is growth plus structural changes. Thus the term economic growth signify only rise in real national and per capita incomes. Whereas the term economic development is the signification of rise national income and per capita incomes along with the following structural changes in the economy.

1)   Changing occupational structure:
   
   In the course of economic development. Its occupational structure undergoes a change. As the level of economic development rises, the percentage shares of labor working in primary sector (farming fishing mining food stuffs etc). Begins to decline, whereas the percentage share of working population in secondary, sector (manufacturing portion of the economy) increases.

2)   Changing sect oral structure of national output: 

    In the process of economic development. There takes place a visible change in the relative contributions of primary. Secondary and tertiary sector (services and commerce portion of an economy such as trade transpiration finance etc) in the generation of national output. The % share of primary sector in the national output falls and the share of secondary and tertiary sectors gradually goes up.

3)   Changing structure of industrial production: 

   In the course of economic development industrialization takes place in the country. The proportional of capital goods in the total industrial output rises and that of consumer goods declines.

4)   Changing structural of foreign trade:
   
   As the country develops economically, the share of primary goods in the total exports decline and that of the manufactured capital goods goes up. Likewise the share of consumer goods in total import falls and those of raw material capital goods rises.

5)   Technological progress:

   In the development process, there is a technical breakthrough in agriculture, transport, industries, communication and other sectors of the economy. The traditional techniques of production gradually give way to science based automated techniques.

6)   Social, institutional changes: 

   With the development of an economy, there is general urbanization and the adoption of modern methods of thinking acting producing and consuming. There are changes in behavioral, institutional and organizational factors. The propensities to undertake risk, innovations and investment become sharper.

Summing up:

we can say that economic growth and economic development go side by side. Economic development to an advanced country means a contribution or acceleration of existing rates of economic growth. For a developing country, it means the rate of expansion which can move a developing country from the state of under development to the state of development through the changes in the technical and institutional arrangement. Whatever may be the objectives or goals of development, the essence of economic development, however, remains, rising per capita income, elimination of poverty, grater employment opportunities, lessening income inequalities and more-important development of physical quality of life such as education, health life expectancy etc. etc.