Economic Development (Research report)

.         Increase in Real Gross National Product (GNP)    

            Economic development will take place when 'the real GNP of a country increases. To get' the real GNP of the country, the GNP must be corrected by some index number. Sometime it happens that the GNP of a country increases due to inflation______ such will not represent economic development. Therefore, to know development we will have to deduct the price rise form the increase in GNP. Moreover, we will have to deduct depreciation allowance form GNP to get NI.

cLong Period of Time

To assess Economic Development, a period of 25 years must be kept in view. That is, if real GNP rises till the period of 25 years it will be accorded as Economic Development.

MEASUREMENT OF ECNOMIC DEVELOPMENT

            To measure economic development the following criteria are” mostly used. .

(1) Increase in real GNP,. (2) Increase in real per capita income, (3) Economic welfare criterion, (4) Social indicator criterion, (5) Human development criterion. .

'However, in, the earlier days ,only' the first’ two methods were adopted’ to, measure economic development           

INCREASE IN REAL GNP AS A CRITERION OF ECONOMIC DEVELOPMENT

In the light of Professors Meir and Baldwin’s  definition, it is $aid that if real .1 GNP increases over a long period of time, this situation. will be considered as economic:

Development 'Following arguments are given in favour of this criterion:

1. The increase in real per capita income is based upon increase in. real GNP. Therefore, how long the real GNP does not increase, the per capita income cannot increase.

2. So may countries who want to increase their military power they have the desire to increase their population. They never think of per capita income rise. Therefore, if in such c_9untries the per capita income remain the, same, it does not mean that economic development 'has not taken place; Moreover, if it same countries’ due to drought, migration and genocide etc. the per capita income rises - it’ does not mean economic development.   ­

3. If the per capita method is adopted the population problems will be ignored. . But as far as UI)Cs are, concerned, the need into face the population pr0bIems rather . Keeping. Them side.. Moreover, if in UDCs we adopt per capita method, then there ' will be hardly any development encase in UDCs per capita income rises very slowly and nominally.

4.         The criterion of increase’ in real natural income is also important for Developed I Countries (DCs). It is because that these countries have already attained high per capita' income levels. Buty they want to increase national income so that full employment could be maintained without inflation and deflation.