Meaning of Economic Growth:
- • Economic growth relates to the long run increase in the total output of an economy.
- • In economic growth there is a continuous increase in the real national income and the real per capita income and this is possible due to increase in the supply of factors of production and increase in their quality.
- Thus economic growth is a quantitative change. It shows the increase in output and gross national output.
1. Definitions of Economic Growth :
- Economic growth refers to growth rate of national income or rise in total quantum of goods and services. – Prof. Hansen
- A long-term increase in capacity of a country to supply diverse economic goods to its people is known as economic growth. – Simon Kuznets
2. Limitations of Economic Growth :
- It considers only the quantitative change.
- In economic growth there is a rise in national income and per capita income but institutional and psychological factors remains unchanged.
- Its concept is narrow and depicts only the rise in the rate and extent of output.
- It is not useful to know the welfare of the people.
