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Thus in conclusion it can be observed that availability of natural resources and its proper utilization is still working as an important determinant of economic growth. Capital Formation and Capital Accumulation: Capital formation and capital accumulation are playing an important role in the process of economic development of the country.Here capital means the stock of physical reproducible factors required for production.
Here the real per capita income of a country simply indicates total money income adjusted to price level changes over time, i.e.
r = y/p where r = real income; y = money income and p = price level.
With proper human capital formation, increasing mobility and division of labour, manpower resources can provide useful support to economic development.
On the other hand, higher rate of growth of population increases demand for goods and services as a means of consumption leading to increasing consumption requirements, lesser balance for investment and export, lesser capital formation, adverse balance of trade, increasing demand for social and economic infrastructural facilities and higher unemployment problem.
Moreover, capital formation requires the suitable skill formation so as to utilise physical apparatus or equipment for raising the productivity level.
In an economy, capital accumulation can help to attain faster economic development in the following manner: (a) Capital plays a diversified role in raising the volume of national output through changes in the scale or technology of production; (b) Capital accumulation is quite essential to provide necessary tools and inputs for raising the volume of production and also to increase employment opportunities for the growing number of labour force; (c) Increase in capital accumulation at a faster rate results increased supply of tools and machinery per worker. Thus by the term economic development we mean a process so as to raise the per capita output with a scope for equitable distribution. Meier has rightly said, “We shall define economic development as the process whereby per capita income of a country increases over a long period of time.” Here the word “process” indicates long period changes related to changes in demand side as well as changes in factor supply. In underdeveloped countries the problems are that of initiating and accelerating development.” According to Maddison, “the raising of income levels is generally called economic growth in rich countries and in poor ones, it is called economic development.” The processes of economic development should not only generate increased or enhanced means of production but it should also make room for equitable distribution of such resources.Similarly, Britain has developed its industrial sector by importing some minerals and raw materials from abroad.However, an economy having deficiency in natural resources is forced to depend on foreign country for the supply of minerals and other raw materials in order to run its industry.Thirdly, by the term economic development we mean continuous increase in the level of real national income over longer time period, covering a period, not less than 25 to 30 years.While explaining the distinction between economic development and economic growth, C. Spengler has listed about nineteen determinants but Rostow mentioned six propensities having much bearing on economic growth.Economic development, being a dynamic concept refers to the continuous increase in production over the changing time path.Secondly, attainment of economic development indicates increase in real per capita income over time.Economic development is thus a process of raising the rate of capital formation, i.e. Moreover, the task of economic development is influenced by a number of factors such as—economic, political, social, technological, natural, administrative etc. While analysing the determinants of economic growth, Prof. Population and Manpower Resources: Population is considered as an important determinant of economic growth.In this respect population is working both as a stimulant as well as hurdles to economic growth.