Growth

What is Economic Growth?

It means increase in capacity of a country to produce goods and service

Example

Increase in Industrial Production

Increase in Agricultural Output

GROWTH- GOAL OF 5 YEAR PLANS - Teachoo.JPG

How is Economic Growth Measured?

It is measured with help of GDP (Gross Domestic Product)

GDP is the market value of goods and service produced in a year

Higher the GDP, more rich the country as people are able to enjoy a large variety of goods and services

Which Country has More Economic Growth - Teachoo.JPG

How is GDP Derived?

It is derived from different sectors of economy

Example

Agriculture Sector

Industrial Sector

Service Sector

GDP Growth depends upon Structural composition of different sectors

 

What is Structural Composition of an Economy?

It is the amount contributed by different sectors of economy in GDP Growth

For a less developed economy, share of agriculture sector is higher

As a country becomes more developed, share of agriculture sector declines and other sector rises

GDP Depends upon Structural Composition of Economy - Teachoo.JPG

How did Structural Composition of India change after independence?

In India, Share of Agriculture in GDP was more than 50% at time of independence

(Share of Service Sector and Industrial Sector was very less)

However from 1990, Share of Service Sector Increased to 40.59%

It is because as a country becomes more developed,share of agriculture sector declines and other sector rises

Sector Name 1947 1990  
Agriculture 59% 34.9%  --> Reduced
Industry 13% 24.6%  --> Increased
Service 28% 40.5%  --> Increased

 

Lets Summarize Growth Goal

Summary-Growth - Goal of 5 Year Plans - Teachoo.JPG

 

NCERT Questions

Q11

What is sectoral composition of an economy?

Is it necessary that the service sector should contribute maximum to GDP of an economy?

Comment.

View Answer

 

MCQ Other Books

Q1

In the following questions, select the correct answers:

Which of these is a good measure of growth?

A Per Capita Income

B GDP

C NNP

D Factor Income from abroad

View Answer

 

Q2

This sector witnessed an increase in share of contribution to GDP.

A Agriculture sector

B Industrial sector

C Service sector

D None of the above

View Answer
  1. Class 12 NCERT
  2. Indian Economic Development

Transcript

GROWTH- GOAL OF 5 YEAR PLANS What is Growth It is Increase in Capacity to Produce Goods and Services It means Larger Stock of Productive Capital (Means of Production) Earlier Less Factories Now More Factories Large Stock of Supporting Services Earlier Less Banks Now More Banks Increase in Efficiency of Productive Capital Earlier One Machine Produced 2 Piece Now One Machine Produced 5 Pieces How is Growth Measured? It is measured with the help of GDP More the GDP More Economic Growth Which Country has More Economic Growth? India GDP of India =2 Trillion $ Less Economic Growth USA GDP of USA= 20 Trillion $ More Economic Growth More Economic Growth How is Growth Measured? It is measured with help of GDP (GDP means Gross Domestic Product It is Value of Goods and Service Produced in a Country) More the GDP, More the Economic Growth “Growth Depends upon GDP GDP Depends upon Structural Composition of Economy” “Growth Depends upon GDP GDP Depends upon Structural Composition of Economy” It is the contribution of Different Sectors to Economic Growth (GDP) There are 3 Sectors of Economy Different Sector of Economy Agriculture Sector Industrial Sector Service Sector For a less Developed Economy Share of Agriculture Sector is Higher In GDP As a Country becomes more developed, Share of these Sectors Increase in GDP Summary-Growth - Goal of 5 Year Plans What is Growth It means increase in capacity to produce goods and service How to measure it? It is measured with help of GDP (Gross Domestic Product) GDP is the market value of goods and service produced in a year Higher the GDP, richer the country as people are able to enjoy a large variety of goods and services What is Structural Composition of Economy It is contribution to GDP of Different Sectors of Economy In case of less Developed Economy-Share of Agriculture Sector is More In case Economy become more developed, Share of Industrial and Service Sectors increase What was the Structural Composition of India Economy

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.