economic development or economic progress has been defined in two ways According to one definition economic growth means growth of national income of he country. In other words it implies an increase in the net national product in a given period. say a year Some economists consider this definition as inadequate and unsatisfactory. Tiles argue that even if the national income goes up. the general standard. of living may go down. This can happen if population of the country is rising more rapidly than the growth of the national income. If the national income rising at the rate of 2 per cent and population is increasing at the rate of 3 per cent the level of Living of the people is bound to go down. This is because on account of population increasing at a HighBeam rate than the growth t>the national incorrect per capital income falls and when per capital income goes down we cannot call it economic growth. The country will have registered economic growth only if per capital income has gone up and this will happen only if the national income grows at a higher rate than the growth rate of the population.
Thus. a better definitions of economic development will he to base it on per capital income. According to this definition economic growth means the increase in per capital income of the country at constant prices. higher per capital income would finical that people arc better off and enjoy i higher standard of living, and to raise the level of living of the people is the main objective of economic development. u the