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Economic Growth vs Economic Development


Difference between Economic growth & Economic Development

Economic GrowthEconomic Development
Economic growth refers
to an increase in the real
output of goods and
Services in the country.
.
Economic development implies
changes in income, savings and
investment along with
progressive changes in socioeconomic
structure of country
Growth relates to a
gradual increase in one of
the components of Gross
Domestic Product:
consumption, government
spending, investment, net
exports
Development relates to growth
of human capital, decrease in
inequality figures, and structural
changes that improve the quality
of life of the population
Economic Growth is
measured by quantitative
factors such as increase in
real GDP or per capita
income
The qualitative measures such as HDI
Human poverty index (HPI),
Infant mortality, literacy rate etc.
are used to measure economic
Development.
Economic growth reflects
the growth of national or
per capita income
Economic development reflects
Progress in the quality of life in a country.
Generally, economic growth is measured in terms of real Percapita income

Economic Development is measured by using

1. Human Development Index
2. Gross National Happiness Index
3. United Nations world Happiness Index

Human Development Index:

Human Development Index is used to measure Economic development. Economic growth is different from Economic development.

Every year Human Development Index is released by United Nations Development Programme (UNDP)
The HDI is a measure for assessing progress in three basic dimensions of 
human development:

1. a long and healthy life- Life expectancy
2. access to knowledge- Education
3. Access to a decent standard of living- Real Percapita income

The Education component of the HDI is measured by two other indicators— 

Mean of years of schooling (for adults aged 25 years)
Expected years of schooling (for children of school entering age)

Gross National Happiness:

Bhutan, a small Himalayan kingdom developed a new concept of assessing development in the early 1970s known as the Gross National Happiness (GNH).
Bhutan has been following up the GNH since 1972 which has the following parameters to attain happiness/development:
  • Higher real per capita income 
  • Good governance 
  • Environmental protection 
  • Cultural promotion (i.e., inculcation of ethical and spiritual values in life without which, it says, progress may become a curse rather than a blessing)

UN’s World Happiness Index

The Happiness report ranks nations on the basis of six key factors:
(i) GDP per capita,
(ii) Healthy life expectancy,
(iii) Someone to count on,
(iv) Perceived freedom to make life choices,
(v) Freedom from corruption, and
(vi) Generosity

Some Important Questions
1. Which of the following organisation publishes Human Development Index? 
a. IMF
b. World Bank
c. OECD
d. UNDP
2. Head Quarters of UNDP is located at
a. Washington
b. New York
c. Paris
d. Tokyo
3. As per recent HDI report, what is the rank of India? 
a. 130
b. 131
c. 100
d. 135
4. What is the present life expectancy in India as per HDI report? 
a. 60 years
b. 55 years
c. 75 years
d. 68.3 years
5. Which of the following country measures Gross National Happiness Index? 
a. India
b. USA
c. Bhutan
d. Japan