Question- What is the meaning of Economic Development ? Explain the contribution of education as a means of Economic development. 

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What is the meaning of economic development?

Ans.

Economic development is the increase in the standard of living in a nation’s population with sustained growth from a simple, low-income economy to a modern, high-income economy. Also if the local quality of life could be improved, economic development would be enhanced. Its scope includes the process and policies by which a nation improves the economic, political, and social well-being of its people.

Definitions of Economic Development

Economic development is the development of economic wealth of countries or regions for the well-being of their inhabitants. This is the short definition of Economic Development. There are other numerous definitions of Economic Development among them some important are as follows :

1. According to Goncalo L Fonseca : “It is the analysis of the economic development of nations.”

2. The University of Iowa’s Center for International Finance and Development defines it as “Economic development” is a term that economists, politicians, and others have used frequently in the 20th century. The concept, however, has been in existence in the West for centuries. Modernization, Westernization, and especially Industrialization are other terms people have used when discussing economic development. Although no one is sure when the concept originated, most people agree that development is closely bound up with the evolution of capitalism and the demise of feudalism.”

3. According to Mansell and Wehn : “Economic development has been understood since the Second World War to involve economic growth, increases in per capita income, and attainment of a standard of living equivalent of that of industrialized countries.”

Contrast between Economic Development and Economic Growth

In the words of Amartya Sen, “Development requires the removal of major sources of unfreedom poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation neglect of public facilities as well as intolerance or over activity of repressive states.” Economic Growth and Development are different terms used in economics. The differences between these two terms can be seen as under :

1. Generally speaking economic development refers to the problems of underdeveloped countries and economic growth to those of developed countries.

2. By Economic Growth we simply mean increase in per capita income or increase in GNP. In recent literature, the term economic growth refers to sustained increase in country’s output of goods and services, or more precisely product per capita. Output is generally measured in terms of GNP.

3. The term economic development is far more comprehensive. It implies progressive changes in the socio-economic structure of a country. Viewed in the way economic development involves a steady decline in agricultural shares in GNP and continuous increase in shares to industries, trade banking construction and services. Further whereas economic growth merely refers to rise in output; development implies change in technological and institutional organization of production as well as in distributive pattern of income.

4. Compared to the objective of development, economic growth is easy realize. By a large mobilization of resources and raising their productivity, output level can be raised. The process of development is far more extensive. A part from a rise in output, it involved changes in composition of output, shift in the allocationg of productive resources, and elimination or reduction of poverty, inequalities and unemployment.

5. Economic development is not possible without growth but growth is possible without development because growth is just increase in GNP. It does not have any other parameters to it. Development can be conceived as Multi-Dimensional process or phenomena. If there is increase in GNP more than the increase in percapita Income then we can say that Development is possible. When given conditions of population improves then we can say that this is also an indicator of Economic Development.

Economic Development in India

The economic development of India was dominated of India was dominated by socialist-influenced policies, state-owned sectors, and red tape & extensive regulations, collectively known as “License Raj”. It led the country and its economy isolated from the world economy. However the scenario started changing from the mid-1980s, when India began opening up its market slowly through economic liberalization. The policy played a huge impact on the economic development of India. The Indian economic development got a boost through its economic reform in 1991 and again through its renewal in the 2000s. Since then, the face of economic development of India has changed completely. The economic reform of 1991 played a pivotal role in the economic development of India. Reaping its benefit, the growth of the country reached around 7.5% in the late 2000s. It is also expected to double the average income within a decade. According to the analysts, if India can push more fundamental market reforms, it will be able to sustain the rate and can even achieve the government’s target of 10% by 2011.

Education as a Means of Economic Development

Every development including economic development is a dynamic process. Economic development empowers people and promotes important changes in their lives. However, economic development cannot take place by itself. It requires a educated, skilled and competent people. Seen from this angle, education becomes the most important factor for economic development. The relation between education and economic development can evaluated as follows :

(1) Instrument for Developing Human Resources : Education provides a person with knowledge and information which in turn bring about desirable changes in the way you think, fell and act. Education also builds in a strong sense of self-esteem, self-confidence. It contributes very effectively to the realisation of one’s potential.

(2) Tangible Contributions : People having reasonable literacy and numeracy skills tend to produce more farm crops, have limited number of children and enjoy a relatively better quality of life as compared with uneducated families. Educated people earn more and are respected by the society. It is because of its in changing the lives of the people that education becomes an important part of the economic development policy in every country.

(3) Planned Family : Education, particularly of girls and women, helped to control excessive, population growth by promoting the concepts of family planning, collective health and well-being. An educated family makes informed choices with respect to having a child as well as for maintaining their own and their children’s health. The planned family provides better access to economic development.

(4) Development through Wider People’s Choices : Education is also important for influencing social behaviour. For example, education widens people’s choices. It expands their perceptions and capabilities for leading a better quality of life. Adequate and good quality food (nutrition), access to safe drinking water, better health care services, relevant and quality education for children and youth constitute the core elements of one’s life. This betterment encourage economic development.

(5) Direct Impact on Economic Development : The direct impact of education on economic benefits has been noticed in many countries. For example, it is observed that each additional year of schooling for men and women increases wages by between 10 to 20 per cent, and farm output by up to 5 per cent. In contrast, a population with a low level of education has little or no capacity to increase productivity. An educated person can make effective use of new technology, engage in entrepreneurial activity, and be responsive to market demands and changes.

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