Question

write about 150 words why is economic awareness necessary in the Nation's development?​

Answer 1

Answer:

No distinction was drawn between economic growth and development in the beginning of the evolution of economics of development. However, since the seventies it has been thought necessary to distinguish between economic growth and economic development. There are two views even about the concept of economic development. The traditional view has been to interpret it in terms of planned changes in the structure of national product and the occupational pattern of labour force and also the institutional and technological changes that bring about such changes or accompany such changes.

It may be noted that Kuznets in his study of Modern Eco­nomic Growth interpreted the process of modern economic growth which involves these structural changes. In this view during the process of economic growth share of agriculture in both national product and employment of labour force declines and that of industries and services increases. Vari­ous strategies of development which were suggested until ‘seventies’ generally focused on rapid industrialization so that structural transformation could be achieved.

For this purpose appropriate institutional and technological changes were recommended to bring about such structural changes. Thus C.P. Kindleberger writes, Economic growth means more output and economic development implies both more output and changes in the technical and institutional arrangements by which it is produced.

Thus, according to traditional view, economic development implies growth plus structural change. Structural change refers to changes in technological and institutional factors which cause shift of labour from agriculture to modern manufacturing and services sectors and also generate self-sustaining growth of output. An aspect of structural change which is of special mention is that during the process of economic development there occurs a shift of working population from low productivity employment in agriculture to the modern industrial and services sectors having higher levels of productivity of labour.

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That is, during the process of economic development percentage share of working population in agriculture sharply falls whereas percentage shares of working population employed in modern industrial and services sectors substantially increase. Along with this change in sectoral distribution of labour force there occurs a change in sectoral composition of national in­come in which percentage contribution of agriculture to national income and declines and percentage contributions to national income of industrial and services sectors increase. This occurs due to the change in pattern of consumption of the people as economy grows and people’s income increases as well as due to the changes in levels of productivity in the different sectors of the economy.

It is worth mentioning that in this view causal references were made to