Simply by, “Economic Development” we mean the continuous increase in real income of a country over a long period of time. Moreover, it is also furnished with technical and industrial changes in the society. Like development, the economists also present the concept of “Economic Growth”. The economic growth represents increase in the production of goods and services of a country. Moreover, it is attached with the increase in the efficiency of the factors of production.
From such simple definitions we find that economic development is a qualitative term while economic growth is a quantitative term. As the increase in the quantity or volume of a thing denotes its growth. Therefore, if a country’s output, national income, per capita income, consumption, savings and investment increase, such phenomenon
represents growth. Therefore, if the level of national production increases due to better use of factors of production, better techniques of production or better organization, it represent economic growth.
In the words of Kindleberger:
“Economic Growth means more output and changes in the technical and institutional arrangements. Growth not only implies more output but also more efficiency and more inputs. While Economic Development is a wider concept and it goes beyond the changes in the structure of output and allocation of inputs”.
In the early stage, any economy that grows is likely to develop and that which develops is likely to attain growth. But the countries who have already developed as US, UK, Germany, France and Australia etc., are desirous to keep on growing. While in the case of UDCs which have low incomes, growth and development go side by side.
Thus we conclude that economic development means a sustained, secular improvement in material well-being which may be reflected in an increasing flow of goods and services. As the definition of development has been presented in material terms. Thus it includes social, cultural, political, moral and economic factors which contribute to material progress.
Thus economic development is economic growth because it aims at growing of the production of material commodities and services. It is social because it implies institutional changes in the society. It is moral because the idea of equality and social justice is involved in it. It is cultural because development policies imply a profound revolution.
Thus we say that Economic Development is wider than Economic Growth.