1. Development
Economics

2. Elements of Development Structural Changes in Development process
Chapter outline:
Growth Vs Development
Elements of Development
Structural Changes in Development process
Objectives of Development

3. Difference Between Growth and Development
Generally, the terms Economic Growth and Economic Development are used to convey the same idea i.e. Economic Progress. However, the term Economic Development is more comprehensive in its scope than Economic Growth.
ECONOMIC GROWTH:
The increase in the Real GNP of a country over a long period of time is known as Economic Growth. OR
The increase in Real Per Capita Income of a Country over a long period of time is known as Economic Growth.

4. Eco. Dev.= Economic Growth + Structural Changes
Difference Between Growth and Development
ECONOMIC DEVELOPMENT:
Economic Development refers to the situation of a country where its Real GNP and Real per capita income is increasing over time with structural changes in the various economic sectors of the economy.
Economic Development means economic growth plus structural changes in the economy.
Eco. Dev.= Economic Growth + Structural Changes

5. Elements of Economic Development:
Long Term Process:
Economic Growth is a long- run process involving a period of decades. A short-term increase in national income for a few years is not considered as economic growth.
Rise in productivity:
Economic Growth is always associated with substantial rise in productive capacity of the economy. The rise in real output can be achieved by proper utilization of natural resources and human resources and better techniques of production in all sectors of the economy.

6. Elements of Economic Growth…. continued
Rise in real per capita income:
Economic Growth is accompanied by substantial rise in real per capita income. This can be possible only if the real per capital income is higher than the rate of growth of population over a long period of time.
Greater equality in the distribution of income:
There should be greater equality in the distribution of income and reduction of unemployment in the country.

7. STRUCTURAL CHANGES: (1) Changing Occupational Structure:
As the level of economic development rises, the percentage share of labour working in primary sector (farming, fishing, mining etc) begins to decline whereas the percentage share of working population in Secondary Sector (manufacturing and service sector) increases.
(2) Changing structure of Industrial Production:-
in the course of economic development, industrialization takes place in the country. The proportion of capital goods in the total industrial output rises and that of consumer goods declines.

8. STRUCTURAL CHANGES:
(3) Changing Sectoral 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).
(4) Changing structure of foreign trade:-
As the country develops economically, the share of primary goods in the total exports leads to decline and that of the manufactured capital goods goes up. Like-wise, the share of consumer goods in total imports falls and those of raw material capital goods rises.

9. STRUCTURAL CHANGES: (5) Technological Progress:
In the development process, there is a technical break through in agriculture, transport, industries, communication and other sectors of the economy. The traditional techniques of production gradually give away 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, producing and consuming. There are changes in behavioral, institutional and organizational factors. The propensities to take risk, innovation and investment become more Sharpe.

10. Objectives of Development
1.Provision of Basic Needs: The primary objective of development is the provision and expansion of basic human needs such as food, clothing, shelter, health and protection.
2. Raising Level of Living: Another important objective of development is to raise the level of living of the people by providing them higher incomes, more jobs, better education, greater freedom and self respect.
3. Expanding the range of Economic and Social Choices: in addition to the above advantages of economic growth, development must include the increase in human choices. People should have the freedom to choose greater leisure, political freedom and equality of opportunity.

11. Objectives of Development…continued
4. Poverty elimination
Poverty elimination is an important development objective but all models applied to this problem have not borne fruit. In fact unemployment and poverty has been increasing in the developed countries in recent years.
5. Universal Education
Another important development objective that has been addressed to some extent. In developing countries, however, many educated persons are facing unemployment or underemployment

12. 6.Modernization of Institutions
Objectives of Development…continued
6.Modernization of Institutions
Although some modernization of political, social and economic institutions has taken place but this has worked to the benefit of smaller sections of the population mostly urban based ones.
7. National Independence
Developing countries have been focusing on superficial symbols of independence but not tackling the real issues that are impeding growth and development.

13. 8.Economic and Political Participation
Objectives of Development…continued
8.Economic and Political Participation
This has been practiced to some extent but again most of the people have been denied access due to one reason or another
9. Grass Root Democracy
Means affording channels to people at the lowest level to participate in decisions regarding important issues impacting their lives. Again limited avenues that have been mostly ineffectual have been afforded, in this regard, to common people.

14. 10. Economic and Social Equality
Objectives of Development…continued
10. Economic and Social Equality
Large income and social inequalities exist in many developing countries that hinder prospects of growth and development. Power and authority is in the hands of a few groups of elites and most of the people are denied participation in important areas of politics and economics.

15. Thank you