Indicators of Economic Development Presention.pptx

Indicator of economics development

1. What is Economic Development It is a wider concept. Economic development implies economic growth plus progressive changes in certain important variables which determine well being of the people. Thus it has a qualitative dimension . Economic development is not just only about money. It is the government objective of improving civilian standards of living with the creation of jobs through improvements in infrastructure and education.

2. Indicators of Economic Development Economy development has become the hot chase in the modern competitive world. Every country wants to become economically developed. All the countries in the world are competing each other to move ahead. Indicators determine whether an economy is growing or it is shrinking. Productivity per hectare of land. Industrial Progress. Per capita income Per capita consumption. Qualitative entrepreneurship. Physical Quality of life index, and Human development index. Structural transformation. Environmental balance. Capital formation. Gross National Income (GNP)

3. Productivity per hectare of land Economic development can be measured in term of land productivity which is generally measured in terms of productivity per hectare of land. Land productivity is the average yield (in kgs ) of a crop per hectare of land. Agriculture is an important sector of Indian economy of its contributes about 17% of the total GDP & provides employment to over 60% of the population Indian agriculture has registered impressive growth over last few decades. It was very low till commencement of economic planning in 1950 since it is increasing constantly. Formula = Total crop production / Total land area under crop

4. Industrial Progress   Industrial progress plays a dominant role in the economic development of a country. It is an important means to increase the national output and per capita income. During the period of economic planning, especially in second Five Year Plan Indian industries got an opportunity to expand. Industry starts replacing agriculture as the engine of growth. Industry produce wide range of goods which consumer would like to consume as their income rises. Sources of Employment. ( industry is the biggest source of employment. The labour force is rising rapidly.) Sources of Mechanized. ( Tractor, Thresher , harvester etc)

5. Per Capita Income Per capita income is another important indicator of economic development. It indicates economic welfare of the country. Per capita income is a measure of the amount of money earned per person in a nation or geographic region. Per capita income can be used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population . PCI = Total National Income / Total Population  

6. Per capita consumption One of the important objectives of economic development is to improve the standard of living of the people which depends upon per capita consumption. It is reflected in an increasing flow of goods and services. All the economic activities like production, consumption, exchange, distribution are carried out to satisfy human wants. It means the ultimate objective is want satisfaction which determine the standard of living and welfare of the people. In simple way per capita consumption is the yearly use of goods and services by each person, derived by dividing the quantity of goods and services used by the total population. PCC = Total Consumption Expenditure / Total Population

7. Qualitative Entrepreneurship A person who runs an enterprise is known as an ‘Entrepreneur ’. An entrepreneurs is a person who has ability to recognise business opportunities. He is a person of some special qualities such as ability to innovate, hard work, confidence, vision, social responsibility, positive thinking, etc. The history of developed countries shows that the entrepreneurs have played a very important role in the economic development. For example create jobs, standard of living, export, community development, wealth creation and sharing etc.

8. Physical Quality of Life Index ( PQLI) And Human Development Index (HDI) PQLI refers to overall well-being of the people which depends upon life expectancy , infant mortality and literacy . Human Development refers to a process of enlarging people choices and well-being. It depends upon life expectancy, educational attainment and GDP. Key dimension of human development are a long and healthy life, being knowledgeable and have a decent standard living.

9. Structural Transformation The structural changes in the economy are accompanied by changes in attitudes, ideologies and institutions. Such changes are ingredients of development and hence can be considered as indicators of economics development .

10. Environmental Balance Environment means the whole set of climate, soil, water, etc on which our agriculture and industry depend. The process of economic development causes environmental imbalance. This should be avoided for the sake of future generations. Therefore sustainable economic development should be the goal of every country.

11. Capital Formation Another important indicator of economic development is rate of capital formation. It means converting savings into physical productive durable assets like dams, electricity generation, transport facilities, modern technology etc. Countries require capital goods to replace older ones used in the production of goods and services. Production falls if a country is unable to replace capital goods as they reach the end of their useful lives . The rate of economic development depends upon the rate of capital formation which depends upon savings.  

12. Gross National Income (GNP) According to Dr. Kuznet real GNP is a useful indicator of economic development. GNP refers to the total market value of all final goods and services produced by a country during a year plus net income from abroad. It is used by economist to find solution to the economic issues such as poverty and inflation. GNP = C + I + G + X + Z