GROWTH & DEVELOPMENT
1. Distinguish between economic growth and economic development.
2. Explain various aspects of economic development incorporating the core values
of development.
Development is the process of structural transformation.
The definition of economic development given by famous economist Michael Todaro is
an increase in living standards, improvement in self- esteem needs and freedom from
oppression as well as a greater choice.
Economic development brings both qualitative and quantitative changes in the economy
As Dr. Amartaya Sen put it, ``Economic growth cannot be sensibly treated as an end in
itself. Development has to be more concerned with enhancing the lives we lead and the
freedoms we enjoy.”
This new approach is popularly known as Sen’s Capabilities Approach. According to
this approach, development is not just about increasing the availability of commodities
(focus of the per-capita income approach) but expanding the capabilities of individuals
to use these commodities and enhancing the freedom of choice of people.
Higher income is important an element of one’s well-being. But, well-being of
individuals also depends on their health, education, geographical and social environment,
and political system.
There are 3 core values of development:
(i) Sustenance (ii) self-esteem (iii) freedom.
Sustenance: Sustenance is the ability to meet basic needs of people. All people have
certain basic needs without which life would be impossible. These basic needs include
food, shelter, health, and protection. People should have access to these basic needs.
Self-Esteem: Sense of worth and self-respect and feeling of not being marginalized are
extremely important for individual’s well-being. All peoples and societies seek some
form of self-esteem (identity, dignity, respect, honor etc.). The nature and form of self-
esteem may vary from on culture to another and from time to time. Self-esteem may be
based on material values: higher income or wealth may be equated with higher
worthiness. One may consider individuals worthy based on their intellect or public
service.
Freedom from Servitude: Human freedom, the ability to choose, is essential for the well-
being of individuals. Freedom involves an expanded range of choices for societies:
economic and political. It involves freedom from bondage, serfdom, and other
exploitative economic, social, and political relationships.
Economic growth is a sustained increase in national income.
It shows the performance of the economy.
Although there may be year to year fluctuations or short term variations in the growth of
national income, there has to be a continuous growth in national income in the long run
for it to qualify as economic growth.
Per-Capita income is a better measure of economic growth.
Q. What is Inclusive Development? What are the elements of Inclusive
Development? What measures have been included in the Budget 2022-23
for Inclusive development of India?
Inclusive Development refers to the "development of all" and "development in various spheres
of life", regardless of person's gender, caste, religion, region and social status. It is based on the
philosophy of "leaving no one behind." It ensures overall well-being of the human beings in
various spheres of life such as Economic, Political, Social, etc.
As per OECD (Organisation for Economic Co-operation and Development), inclusive
development is economic development that is distributed fairly across society and
creates opportunities for all.
Elements of Inclusive Development:
1. Principle of Equity: It is one of first things that have to be ensured to achieve inclusive
development of the country. Every citizen of the country must be treated at par and should not
be discriminated based on his/her gender, religion, etc.
2. Social Justice and Positive Discrimination: Not everyone has achieved equal level of
development be it in terms of income or otherwise. Therefore, special focus must be given to
the vulnerable and disadvantageous sections such as women, children, Scheduled caste (SC)
and Scheduled Tribes (ST) persons, etc. Positive discrimination such as reservation in jobs,
monetary support, etc. should be ensured to achieve "Social Justice" which is a prerequisite for
inclusive development of the country.
3. Range of Choices: As per "Developmental Capabilities Approach" coined by noble prize
winner economist Amartya Sen, economic growth cannot be translated into economic
development unless and until wide range of choices are not made available to the people.
Therefore, focus should be on making broad range of choices available to all.
4. Freedom from Oppression: Every citizen of the country must be free from any kind of
oppression such as Political Oppression and Economical Oppression, etc.
Skill Development
Harnessing the demographic dividend will depend upon the employability of the working
age population, their health, education, vocational training and skills. Skill development
plays a key role here.
India is facing a dual challenge in skill development:
First, there is a paucity of highly trained workforce
Second, there is non-employment of conventionally trained youths
According to the Economic Survey 2017, over 30% of youth in India are NEET (Not in
education, employment or training). Similarly, UNICEF 2019 reports stats that at least 47%
of Indian youth are not on track to have the education and skills necessary for employment
in 2030.
Financial Inclusion
Financial Inclusion is the process of ensuring access to financial services to vulnerable
groups at affordable costs. Financial inclusion is necessary for inclusive development
as it leads to the culture of saving, which initiates a virtuous cycle of economic
development.
Technological Advancement
The world is moving towards an era of Industrial Revolution 4.0. These technological
advancements have capabilities to both decrease or increase the inequality depending on
the way these are being used.
Several initiatives have been taken by the government, eg. Digital India Mission, so that a
digitally literate population can leverage technology for endless possibilities.
Technology can help to combat other challenges too, eg:
Agriculture- Modern technology can help in making an agro-value chain from farmer to
consumer more efficient and competitive.
Manufacturing- Technology can resolve the problems of finance, procuring raw materials,
land, and linkages with the user market. GST was made possible only with the help of
sound technology.
Education- Innovative digital technologies can create new forms of adaptive and peer
learning, increasing access to trainers and mentors, providing useful data in real-time.
Health- Technologies could transform the delivery of public health services - extend care
through remote health services
Governance- Technology can cut down delays, corruption, and inefficiency in the delivery
of a public service
Economic Growth
India is among the fastest-growing major economies in the world. However, currently
Indian economy is facing slowdown due to both cyclic and structural challenges.
However, the target of becoming a $ 5 trillion economy by 2024-25 can allow India to
reduce inequality, increase social expenditure and provide employment to all.
Social Development
It means the empowerment of all marginalised sections of the population like
SC/ST/OBC/Minorities, women and transgenders.
Empowerment can be done by improving institutions of the social structure i.e. hospitals
especially primary care in the rural areas, schools, universities, etc.
Investment in social structures will not only boost growth (by fiscal stimulus) but will also
create a healthy and capable generation to handle future work.
Measures announced in Budget 2022-23:
1. PM DeVINE Scheme: Pradhan Mantri Developmental Initiatives for North East Scheme- This
Scheme has been announced with an outlay of Rs. 1500 crore, which will focus on meeting the
unmet demands for development of the people of North-East Region of the country.
2. RAMP Scheme: Raising and Accelerating MSEM Performance Scheme- Today, in India around
63 Million MSMEs employ around 110 Million people of the country. RAMP Scheme would help
MSME entrepreneurs to enhance more job opportunities for all.
2. DESH- Digital Ecosystem for Skilling and Livelihood- DESH e-stack would help people to attain
skills, re-skill and up-skill, therefore, aiding in livelihood opportunities for all.
