Part One – Growth V/s Development w.r.t Ethiopia and Madhya Pradesh

Ethiopia, the second most populous country in Africa, has been exhibiting stupendous and inconceivable set of numbers. With growth rates of double digit, the country is among the fastest growing economies in Africa. Ironically, regardless of its agriculture, mineral and hydrological resources Ethiopia is one of the poorest countries in the world. Irrespective of high economic growth rates, the economic development indicators are yet a matter of concern. HDI as low as 0.4 (HDI report 2014). This dejected story of Ethiopia elucidate that Economic Growth and Economic Development are two contrasting terms.

Mercantilism, a school of economic thought, functioned only for the purpose of economic growth by capital accumulation (mainly gold). On the other hand, Physiocracy, another school of economic thought, believed on agro-based growth. These schools of thought did not know the concept of development. Sooner or later, people began to notice that the growth is not beneficial to all. The theory of ‘trickle down approach’ doesn’t seem to have a great impact. The quantity of capital accumulation was not enough to capture the actual increase in the living standard of the people. Hence, the concept of economic development emerged. Several efforts are made to capture development. One of the prominent was HDI, formed by Mehboob Ul Haq and Amartya Sen. These indicators take into account the necessary variables, which upgrade the life of an individual. Several other development indicators were dformed such as Multidimensional Poverty Index (MPI), which brings out the level of deprivation in the country.

General Mier describes development as “the process whereby the real PCI of a country increases over a long period of time subject to the stipulation that the number below absolute poverty line does not increase and that the distribution of the income does not become more unequal”