Economic growth: UPSC Daily Important Topic | 27 December 2021

Economic growth

• Economic Growth is the positive change in the indicators of the economy.

• Economic Growth refers to the increment in the amount of goods and services produced by an economy.

• Economic growth means an increase in real national income / national output.

• It refers to an increase over time in a country’s real output of goods and services (GNP) or real output per capita income.

• Economic growth is single dimensional in nature as it only focuses on income of the people.

• Earlier, economic growth was only measured in terms of Gross Domestic Product (GDP).

• At present, it is measured in terms of GDP, Gross National Income (GNI) and Per Capita Income.

• Economic Growth is the precursor and prerequisite for economic development.

• Indicators of economic growth are GDP, GNI and per capita income.

• Economic growth relates a gradual increase in one of the components of GDP; consumption, government spending, investment or net exports.

• It is also considered as a traditional measure of development which indicates the quantitative rise of economy.

• Economic growth only looks at the quantitative aspect. It brings quantitative changes in the economy.

• Economic growth is concerned with increase in economy’s output.

• It focuses on production of goods and services.

• Economic growth is more relevant metric for assessing progress in developed countries.

• Economic growth is relatively narrow concept as compared to economic development.

• It is for short term/short period.

• It is a material/physical concept.

• Economic growth is measured in certain time frame/period.