- Economic growth means an increase in real GDP. This increase in real GDP means there is an increase in the value of national output / national expenditure.
- Economic growth is an important macro-economic objective because it enables increased living standards and helps create new jobs.
Measurement of Economic Growth
Economic growth is measured by changes in the gross domestic product (GDP). It measures a country’s entire economic output for the past year. That takes into account all goods and services that are produced in this country for sale, whether they are sold domestically or sold overseas. It only measures final production, so that the parts manufactured to make a product are not counted. Exports are counted because they are produced in this country. Imports are subtracted from economic growth. Economic growth is measured quarterly measured using real GDP to compensate for the effects of inflation. Here’s more on the GDP growth rate and how you can calculate it.
Measurements of economic growth do not include unpaid services. They include the care of one’s children, unpaid volunteer work, or illegal black-market activities.
Determinants of Economic Growth
- Intensity (hours worked)
- Demographic changes.
- Political institutions, property rights, and rule of law.
- New products and services.
- Growth phases and sector shares.
Economic Growth of Rajasthan
Between 2004-05 and 2015-16, Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 12.38 per cent to US$ 102.98 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 12.67 per cent to US$ 93.30 billion.
Rajasthan accounts for 17.5 per cent of the total cement grade limestone reserves in India and is the largest cement producer with 21 major cement plants having a total capacity of 55 million tonnes per annum.
Bureau of Investment Promotion (BIP) is a nodal agency of the Government of Rajasthan that facilitates investments in various sectors in the state. Rajasthan State Industrial Development and Investment Corporation (RIICO) is the sole agency in the state that develops land for industrial growth.
Some of the major initiatives taken by the government to promote Rajasthan as an investment destination are:
- As per the state budget 2016-17, an estimated outlay of US$ 860 million was made for agriculture and allied industries in the state.
- US$ 1.88 billion for rural development and US$ 4.82 billion for the power sector in the state.
- The Government would also be providing US$ 76.82 million for Feeder Renovation Programme (FRP). In addition, the Government of Rajasthan would provide US$ 1.13 billion for the purpose of equity contribution and budgetary support.
- A Single Window Clearance System (SWCS) for investment approvals is operational in the state and the BIP was set up to focus on investments above US$ 2.2 million.
- The Government of Rajasthan is promoting the development of several SEZs across the state for sectors such as gems and jewellery, handicrafts, IT, electronics, automotive/auto components and textiles.
- Special auto and engineering zones have been developed in Pathredi Industrial Area and Bhiwadi. The three main auto clusters of Rajasthan – Bhiwadi, Neemrana and Pathredi –have as many as 100 functional units.
- RIICO developed 323 industrial areas, including SEZs, export promotion industrial parks and inland container depots.
- The state government is encouraging JVs and contract management of private heritage properties (forts, fortresses, palaces and havelis) as well as identifying heritage government properties to award on a lease basis to promote tourism.
- IT parks with special infrastructure have been set up at Jaipur, Jodhpur, Udaipur, Kota and Alwar.
In 2014, Rajasthan Solar Energy Policy was introduced to reduce dependence on conventional sources of energy by promoting the development of nonconventional energy sources, especially solar power.
The Concept Of Economic Development
- Economic development is the process by which a nation improves the economic, political, and social well-being of its people.
Differences between Economic Growth and Economic Development
- Economic growth measures an increase in Real GDP (real output). GDP is a measure of the national income / national output and national expenditure. It basically measures the total volume of goods and services produced in an economy.
Economic Development looks at a wider range of statistics than just GDP per capita. Development is concerned with how people are actually affected. It looks at their actual living standards and the freedom they have to enjoy a good standard of living.
Elements/ Factors Contributing to Economic Development
- Human Resource
- Natural Resources
- Capital Formation
- Technological Development
- Social and Political Factors
Economic Planning for India
Economic planning refers to the initiation, control and regulation of economic activity by the state with a view to achieve predetermined objectives within a given time-interval.
The principal function of planning, especially in a federal system, is to evolve a shared vision of and commitment to the national objectives and development strategy not only in the government at all levels, but also among all other economic agents.
NITI Aayog acts as the quintessential platform of the Government of India to bring States to act together in national interest, and thereby fosters Cooperative Federalism.
At the core of NITI Aayog’s creation are two hubs – Team India Hub and the Knowledge and Innovation Hub. The Team India Hub leads the engagement of states with the Central government, while the Knowledge and Innovation Hub builds NITI’s think-tank capabilities. These hubs reflect the two key tasks of the Aayog.
NITI Aayog is also developing itself as a State of the Art Resource Centre, with the necessary resources, knowledge and skills, that will enable it to act with speed, promote research and innovation, provide strategic policy vision for the government, and deal with contingent issues.