1. National Income and Economic Growth

2. Economic Growth
Economic growth may be defined as a rate of expansion that can move an underdeveloped country from a near subsistence mode of living to substantially higher levels in a comparatively short period of time.

3. Economic Growth
Historically, rapid economic growth has been accompanied by greater industrialisation.
More accurately the process of economic growth can be described in terms of greater commercialisation of economic activities.

4. Indicators of Economic Growth
GDP/ GNP
Per capita GDP/GNP
Per capita GDP/GNP is most appropriate measure.

5. National Income
The rate of growth of the national income in an economy is an indication of the pace at which the economy has been growing.
A high national income indicates the economy is developed and the overall environment is favorable.

6. Growth of National Income in India
National Income.doc

8. IMPORTANT N.I. INDICATORS
Category
Unit
GDP (Current Market Price)
Rs. Crores QE
Growth Rate % -
14.4
15.6
15.5
12.7
10.6
GDP (factor cost prices)
9.5
9.7
9.2
6.7
7.2
Saving Rate
% of GDP
32.2
33.1
34.4
36.4
32.5 na
Capital Formation Rate
32.7
34.3
35.5
37.7
34.9 Na
Per Capita NNI
(factor cost at current prices)
Rs.
24095
27183
31080
35430
40141
43749

11. Distribution of India’s National Income

12. State of the Economy Economy has decisively to a higher growth phase.
There is an acceleration in domestic investment and savings rate to support high growth rate.
Heavy dependence on agriculture continues.
Contribution of tertiary sector is growing.
Unequal distribution of income and poor standard of living
Regional disparity

13. Economic Growth Economic growth can occur due to
Available amount of resources in the economy changes over time, mainly capital and labour
Change in the efficiency of the factor of production

14. Economic Growth: A limitation of the indicator
An increased national income theoretically means greater material welfare and a rise in living standards, it does not ensure higher levels of well being for individuals in that nation.
Higher Economic Growth can have negative impact like -
Environment degradation
Greater Inequality between Different Classes
Loss of Traditional and Cultural Values

15. Economic Growth VS. Economic Development
There are qualitative dimensions in the development process which may be missing in the growth of an economy expressed in terms of increased in the National Product or Per Capita Product.

16. Economic Development
The problem of development must be defined as a selective attack on the worst forms of poverty. Development goals must be defined in terms of progressive reduction and eventual elimination of malnutrition, disease, illiteracy, unemployment and inequalities.
-Mahbub Ul Haq

17. Economic Growth VS. Economic Development
Uni-dimensional
Multi-Dimensional
Income Based
Standard of Living Based
Well being of the Economy
Well being of the society

18. Measuring Development
Human Development Index (HDI)
Human Poverty Index (HPI)
Gender-Related Development Index (GDI)
Gender Empowerment Measure (GEM)
Human Freedom Index (HFI)

19. Human Development Index
Takes welfare of individuals in a country
Takes following factors in to account
Life Expectancy at Birth
Levels of Educational Attainment
Gross Domestic Product Per Capita

20. HDI
It was developed by UNDP to measure the economic achievements of a nation in combining economic growth and social welfare.
HDI is essentially a score between o and 1
HDI rank.doc

21. Gross happiness index
Gross National Happiness: "GNH" was developed in an attempt to define an indicator that measures quality of life or social progress in more holistic and psychological terms than gross domestic product (GDP).

22. Gross happiness index
A second-generation GNH concept, treating happiness as a socioeconomic development metric, was proposed in 2006 by Med Jones, the President of International Institute of Management.
GNH value is proposed to be an index function of the total average per capita of the following 7 measures:

23. Measures of GNH
Economic satisfaction (savings, debt and purchase power)
Environmental satisfaction: (pollution, noise and traffic)
Workplace satisfaction (job satisfaction, motivation, ethics, conflict, etc.)
Physical health (Severe illnesses, overweight,..)
Mental health (usage of antidepressants, self-esteem, positive outlook..)
Social satisfaction [including family and relationship satisfaction] (domestic disputes, communication, support, sex, discrimination, safety, divorce rates, complaints of domestic conflicts and family lawsuits, public lawsuits, crime rates, etc.)
Political satisfaction (quality of local democracy, individual freedom, and foreign conflicts, etc.)