Indicator of economics development

2. It is a wider concept. Economic development implies economic
growth plus progressive changes in certain important variables which
determine well being of the people. Thus it has a qualitative dimension.
Economic development is not just only about money. It is the
government objective of improving civilian standards of living with the
creation of jobs through improvements in infrastructure and education.

3. Economy development
has become the hot
chase in the modern
competitive world.
Every country wants to
become economically
developed. All the
countries in the world
are competing each
other to move ahead.
Indicators determine
whether an economy is
growing or it is
shrinking.
 Productivity per hectare of land.
 Industrial Progress.
 Per capita income
 Per capita consumption.
 Qualitative entrepreneurship.
 Physical Quality of life index, and
Human development index.
 Structural transformation.
 Environmental balance.
 Capital formation.
 Gross National Income (GNP)

4. Productivity per hectare of land
 Economic development can be measured in term
of land productivity which is generally measured
in terms of productivity per hectare of land. Land
productivity is the average yield (in kgs) of a crop
per hectare of land.
 Agriculture is an important sector of Indian
economy of its contributes about 17% of the total
GDP & provides employment to over 60% of the
population Indian agriculture has registered
impressive growth over last few decades. It was
very low till commencement of economic
planning in 1950 since it is increasing constantly.
Formula = Total crop production / Total land area under crop

5. Industrial Progress
 Industrial progress plays a dominant role in the economic
development of a country. It is an important means to increase
the national output and per capita income. During the period of
economic planning, especially in second Five Year Plan Indian
industries got an opportunity to expand.
 Industry starts replacing agriculture as the engine of growth.
Industry produce wide range of goods which consumer would
like to consume as their income rises.
 Sources of Employment. ( industry is the biggest source of
employment. The labour force is rising rapidly.)
 Sources of Mechanized. ( Tractor, Thresher, harvester etc)

6. Per Capita Income
Per capita income is another important indicator
of economic development. It indicates economic
welfare of the country. Per capita income is a
measure of the amount of money earned per
person in a nation or geographic region. Per
capita income can be used to determine the
average per-person income for an area and to
evaluate the standard of living and quality of life
of the population.
PCI = Total National Income / Total Population

7. Per capita consumption
One of the important objectives of economic
development is to improve the standard of living of the
people which depends upon per capita consumption. It is
reflected in an increasing flow of goods and services. All the
economic activities like production, consumption, exchange,
distribution are carried out to satisfy human wants. It means
the ultimate objective is want satisfaction which determine
the standard of living and welfare of the people.
In simple way per capita consumption is the yearly use of
goods and services by each person, derived by dividing the
quantity of goods and services used by the total population.
PCC = Total Consumption Expenditure / Total Population

8. Qualitative Entrepreneurship
A person who runs an enterprise is known as an
‘Entrepreneur’. An entrepreneurs is a person who
has ability to recognise business opportunities. He
is a person of some special qualities such as
ability to innovate, hard work, confidence, vision,
social responsibility, positive thinking, etc.
The history of developed countries shows that the
entrepreneurs have played a very important role in
the economic development. For example create
jobs, standard of living, export, community
development, wealth creation and sharing etc.

9. Physical Quality of Life Index ( PQLI) And
Human Development Index (HDI)
PQLI refers to overall well-being of the people
which depends upon life expectancy, infant
mortality and literacy.
Human Development refers to a process of
enlarging people choices and well-being. It
depends upon life expectancy, educational
attainment and GDP. Key dimension of human
development are a long and healthy life, being
knowledgeable and have a decent standard living.

10. Structural Transformation
The structural changes in the economy are
accompanied by changes in attitudes,
ideologies and institutions. Such changes
are ingredients of development and hence
can be considered as indicators of
economics development.

11. Environmental Balance
 Environment means the whole set of climate,
soil, water, etc on which our agriculture and
industry depend.The process of economic
development causes environmental
imbalance.This should be avoided for the
sake of future generations.Therefore
sustainable economic development should be
the goal of every country.

12. Capital Formation
 Another important indicator of economic
development is rate of capital formation. It means
converting savings into physical productive durable
assets like dams, electricity generation, transport
facilities, modern technology etc. Countries require
capital goods to replace older ones used in the
production of goods and services. Production falls if
a country is unable to replace capital goods as they
reach the end of their useful lives. The rate of
economic development depends upon the rate of
capital formation which depends upon savings.

13. Gross National Income (GNP)
According to Dr. Kuznet real GNP is a useful
indicator of economic development. GNP
refers to the total market value of all final
goods and services produced by a country
during a year plus net income from abroad. It
is used by economist to find solution to the
economic issues such as poverty and inflation.
GNP = C + I + G + X + Z