The term economic growth refers to the quantitative aspect of economic progress of a country. According to Paul Baron, “Economic growth may be defined as an increase over time in per capita output of material goods.” In other words, growth of gross national output or per capita output is an indicator of economic growth.
We know human wants are unlimited and they are increasing over time. Man is never satisfied with what he has. However, our resources are very limited. Therefore, we should try to satisfy our wants. Hence, we should try to increase the production of goods and services. Thus, economic growth signifies the growth in the volume of goods and services.
It leads to:
(i) Increase in National Product:
Growth in the money value of goods and services are not sufficient for an economy. It simple increases the price of goods and services. In fact, growth is considered in physical terms. Thus, production of different goods and services must be increase in an economy.
(ii) Increase in Per capita output:
Under growth process, not only the total volume of production increases, but simultaneously total population will also increase. Thus, per capital output will also increase over time to maintain the same growth rate. It will help to solve the problem of physical output of goods and services per capita in any economy.
How to attain growth:
Economic growth can be attained from the following methods:-
(a) To raise total output
(b) To check increase in population
(c) To ensure capital formulation
(d) To raise entrepreneurship.
According to Promit Chowdhury, “Economic development is an increase in real output goods and services that is sustained over a long period of time, measured in terms of value added.” According to Meier and Bladwin, “Economic Development is a process whereby an economy’s real national income increases over a long period of time.”
According to Prof. Todaro, “Economic development is a multi dimensional process involving major changes in social structures, popular attitudes and national institutions as well as the acceleration of economic growth, the reduction of inequality and the eradication of absolute poverty”.
Economic development is a much broder concept than economic growth. In simple sense, Economic development.
= Economic Growth + Standard of Living.
Hence, standard of living includes various things like safe drinking water, improve sanitation systems, medical facilities, spread of primary education to improve literacy rate, eradication of poverty, balanced transport networks, increase in employment opportunities etc. Thus, the quality of life is the major indicator of economic development. Therefore, increase in economic development is more necessary for an economy to achieved the status of Developed Nation.