• UGI USER
  • Oct 26, 2023
  • 19 Likes
  • 0 Comments

Economic Growth and Economic Development

Q. A balancing act between economic growth and economic development in India is the need of the hour to critically examine with relevant examples.

Structure of Answer

Introduction

  • Explain the meaning of economic growth and economic development.

Body

  • Mention Impact of Economic Growth without Development
  • Give examples
  • Mention why it is important to Balance economic growth and economic development
  • Mentions steps taken by government

Conclusion

  • Can conclude by giving example of Kerala model and its economic development

Economic growth is sustained production and income increase, measured by GDP, while economic development focuses on improving living standards, education, healthcare, and quality of life. India’s 7% annual growth elevates its global status, but balancing growth with comprehensive development remains a challenge.

Impact of Economic Growth without Development

  • Income Inequality: Rapid economic growth often increases income inequality, benefits of growth tend to concentrate in the hands of a few, leading to social disparities.
  • Lack of Basic Services: While GDP rises, a considerable portion of the population may still lack access to essential services like healthcare, education, and sanitation.
  • Unemployment: Economic growth doesn’t guarantee job creation. High growth with jobless recovery results in unemployment, unemployment rate in India was 7.8% in 2022
  • Rural Neglect: Rural areas may remain underdeveloped, with limited infrastructure and opportunities, even as cities prosper. E.g. Only 20% of rural households have access to piped water
  • Environmental Degradation: Unchecked growth can lead to environmental damage, affecting long-term sustainability. E.g. Air pollution in Delhi

Striking Balance between economic growth and economic development

India’s recent policies reflect an attempt to harmonize growth with development like:

  • Inclusive Economic Policies: Implement policies that prioritize inclusive growth, such as employment generation programs. Example: Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
  • Investing in Human Capital: Enhance education and healthcare infrastructure. Example: Sarva Shiksha Abhiyan and Ayushman Bharat.
  • Promoting Entrepreneurship: Encourage entrepreneurship and small businesses for job creation. Example: Start-up India and Mudra Yojana.
  • Regional Development: Focus on balanced regional development. Example: Special economic zones and North East Industrial Development Scheme.
  • Social Safety Nets: Establish social safety nets like food security programs. Example: National Food Security Act.
  • Agricultural Reforms: Modernize agriculture for increased income. Example: Pradhan Mantri Kisan Samman Nidhi (PM-KISAN).
  • Infrastructure Development: Invest in infrastructure to boost productivity. Example: Bharatmala and Sagarmala projects.

Kerala’s emphasis on healthcare and education has allowed it to maintain strong human development indicators despite its slow economic growth. Hence balancing growth with development is the need of the hour to ensure that the nation’s progress benefits all its citizens and leads to sustainable, inclusive prosperity.