Economic development refers to an ongoing trend that is, in some cases, a combination of economic power. The economic forces are the structural and systemic changes in the overall economy, including the continuous increase in national income, per capita income, productive capacity, standard of living, etc. In other words, economic development indicates the increase in the productivity of the country, socio-economic progress, spread of modern knowledge and science, institutional progress, expansion of vision, integrated implementation of government activities and policies, etc. The question of overall welfare is also closely linked with economic development.
Indicators for measuring economic development There are two main indicators used to measure the economic development of a country. (A) general indicators and (b) special indicators.
National Income and the financial value of the amount of final goods and services that the people of a country can produce using the materials of production in a given fiscal year is called the national income of that country. In any case, if the national income of a country continues to increase, that is, if there is economic growth in the country, it is assumed that economic development has taken place in that country. For this reason, real national income is used as an indicator of economic development. However, the following problems can be noticed in the use of real national income as an indicator of economic development.
First, market prices of commodities in developing countries remain volatile. As a result, it is not possible to calculate the actual national income at market price.
Second, real national income cannot be accurately measured if the value of the currency is devalued due to the trade deficit caused by international trade.
Third, if the growth rate of real national income is less than the rate of population growth, it cannot be used as an accurate measure of economic development.
Fourth, if the distribution of national income is unequal, then the rich of the country become richer and the poor become poorer. As a result, the quality of life of the people deteriorated. In such a situation, national income cannot be taken as an ideal measure of development.
Fifth, the development process in developing countries almost always pollutes the environment. Factory smoke and waste endanger public health and reduce human well-being. But it is not reflected as national income.
Per capita income The per capita income is obtained by dividing the country's national income by its population. Professor Meyer has adopted real per capita income as an indicator of economic development. Because if the rate of growth of national income is higher than the rate of population growth, it can be called economic development. In other words, if the real per capita income increases, it can be assumed that economic development has taken place. However, the use of per capita income as an indicator of development. The following problems are observed in the case.
First, studies in various countries have shown that while real per capita income has increased over a long period of time, about 40% of the country's population does not benefit from development.
Second, there can be national and per capita income in any corner without any change in the social and economic structure. This cannot be called economic development.
Third, when the distribution of national income in the country is unequal, the wealth accumulates in the hands of a few lakhs. Therefore, even if the per capita income increases, the standard of living of the people does not improve.
Fourth, per capita income may increase even if the country produces military equipment instead of cannabis. But it does not improve the living standards of the people.
It is not reliable to use per capita income to compare between different countries.
Some measure economic development in terms of economic well-being and economic well-being. Because human welfare is achieved by Dag. Human welfare is the continuous improvement of material welfare. Human welfare is expressed through the division of goods and services. For this reason, economic welfare is considered as an indicator of development. According to economists Okan and Richardson, “Economic development is the continued and neutral expansion of material progress through the increased flow of goods and services. However, in considering economic welfare as an indicator of development, the following problems can be noticed?
First, goods and services are measured by price. It is a misconception that the same amount of goods and services will bring more benefits if the price level rises.
Second, if the production and supply of goods and services meet the luxury needs of a handful of people, then the increase in national income calculated on the basis of the meager price of those expensive goods does not demand to be considered as welfare economic activities.
Third, human welfare depends on Vag. But the benefits of sharing the same product may vary from person to person.
Economic development can be measured by improving living standards and improving living standards. Economic development is achieved by improving the quality of life instead of increasing the per capita income. Modern economists refer to the improvement of living standards as a measure of economic development. Living standards improve when the rate of education increases, per capita income increases. Average incomes increase and births and deaths decrease, commodity prices remain stable, housing problems remain absent, unemployment problems remain at an all-time low, and people can influence national progress by expressing their views freely and independently.
The quality of life and modern economists also refer to the increase in the quality of life as a measure of economic development. Increasing the excellence of life depends on three things.
(i) the average probability of death in the country decreases or the probability of surviving longer increases;
(ii) Child mortality rate in the country is reduced and
(iii) The average literacy rate increases. With the help of these three values, the level of excellence of life can be found. By this measure, Sweden is the most developed country. The average life expectancy in this country is about 70 years, child mortality rate is 9 per thousand and literacy rate is 98%.
Health and Nutrition The health and nutrition indicators of the people of the country are considered as significant criteria for economic development. Because the working manpower is largely dependent on health facilities and nutrition. And the pace of development largely depends on the workforce.
The economic development of the country is achieved as a result of reduction of poverty, unemployment and income inequality and reduction of poverty, unemployment and income inequality of the people. According to Professor Dudley Seers, if the poverty, unemployment and income inequality of the people in any country are gradually reduced, then it can be said that economic development is taking place in that country. He said that if one or two of the three indicators continue to decline, it can be said that the country is not achieving economic development even though per capita income has increased a lot.
The rate of human capital formation and human capital formation on primary, secondary and higher education. Largely dependent. In any country, if there are more educated people in primary education, human capital is not formed. And educated in secondary and higher education is a high level manpower. This is because such people can take training in a very short time and easily under scientific, technical and training programs. People trained in the country work at different levels. As a result, the rate of capital formation is quite high. Thus, in countries where the rate of human capital formation is high, their economic development is faster.
Financial structure and banks, insurance and other financial institutions are called financial structures. The economic development of the country is largely dependent on the financial structure. Accelerating the work of financial institutions in the country helps in rapid economic development. Therefore, much can be said about the level of economic development from the position of the financial structure.
The level of economic development of a country can be known by looking at the opportunity to meet the basic needs of the people of the country. According to Professor Denis Goulet, basic human needs. Being - food, clothing and shelter. In a country where per capita food, clothing and shelter are high, economic development is taking place.
Education, research and training and education, research and training increase human productivity. R. M. Solow. E. F. Denison, D. W. Jorgenson, s. Economists such as Kuznets cite education, research, and training as important components of production. These factors affect human productivity. For example, economist E. F. Denison estimates that the amount of education a worker receives in the United States between 1929 and 1958 increases by about 2% annually. This increases its average efficiency by 256 per annum and contributes 0.6% to the growth of real national income.