Economic development refers to economic growth that is accompanied by the improvement in the well-being of the people. To expand economic development, it needs different aspects like political stability, capital, and a combination of public and private capabilities.
There are different types of indicators or measurements to know the level of economic development of a country.
Net Economic Welfare(NEW)
Net Economic Welfare is a broader concept than Gross National product to measure economic welfare. It adjusts GNP by adding the value of beneficial non-market activities such as leisure and subtracting the bads from it.
NEW= Real GNP- Depreciation-Environmental degradation + Value of leisure + non-marketed service or activities + value of unaccounted income – regrettable cost.
Real Per Capita Income
Real Per Capita is divided by the number of people. This term is used to compare the standard of living between countries, and it is expressed in terms of used international currencies like the Dollar, and the Euro. It is based on the value but it doesn’t consider the factors like agriculture, secondary or tertiary sector. Real Per Capita Income is calculated by dividing the country’s national income by its population.
Physical Quality Of Life Index(PQLI) Physical Quality of life is an interesting aspect that attempts to measure national well-being using social indicators. The indicators include Life expectancy at birth, infant mortality rate, and literacy rate. The indicators are measured on a scale that ranges from 1 to 100. A 1 on the scale represents the worst performance, and 100 represents the best performance.
Human Development Index(HDI) Human Development Index is used to gauge a country’s general accomplishment, and it was introduced by the United Nations Development program in the World Human Development Report. The Human development index was developed by Mahbub ul Haq. This development index helps the United Nations determine which countries need assistance and the focus is mostly on the least developed countries.
Gross Domestic Product Gross Domestic Product is one of the first measures that is used to assess the economy’s health. There are basic approaches for GDP a rise in GDP indicates that businesses are profiting more, and it also implies that the citizens of that country will have a higher level of life. The formula for GDP = Consumption + Investment + Government spending + Net Exports.
Economic development and its measurements are important statistics regarding the economy and it helps us to understand where the economy of a country is going. The statistics also help the investors on what to purchase, and when to purchase.
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