What is Economic Growth? Definition and Necessary Conditions for Economic Growth

Necessary Conditions for Economic Growth

Definition

Economic growth is the process by which a nation's net national income continues to grow over a long period of time. The process of economic development is like a big ocean in which various small and big rivers flow. The process of economic development is also fraught with many issues. Unless some basic conditions are created, every effort for economic development will be in vain. In the first part of this event, we are talking about the basic conditions that are needed for economic development from day one.

Prerequisites Commitment

(Interest and Determination) Market system

(Market System) Provision of capital

(Capital Availability) Investment opportunities

(Investment Opportunities) Social Environment

(Social Environment) Let's discuss these terms in detail.

Wet meme

The first and most important condition for a country to achieve economic development is that its people are ready for development. Economic development is not a simple task that one can achieve whenever and however one wants. Economic growth requires constant effort and perseverance. Economic growth seems very happy and looks like a destination but the way to reach this destination is very difficult and also requires patience. To this destination

The people of their country have to go through many patient stages. It has often been observed that at different stages the inhabitants have had to make various sacrifices. The determination and intention of the people is the beacon for achieving economic growth. Achieving economic growth will not be difficult if the people are determined to face all kinds of difficulties. Economic development becomes difficult in a conservative environment and a degraded society. If the people prove to be modern, rational and courageous by breaking the idols of conservatism and bigotry, the difficulties of economic development will be easily overcome. Even mountains of difficulties crumble in the face of determination. Of economic development

Therefore, the consent of the people, the willingness to make sacrifices and the expression of the P to take on new responsibilities are the key factors. Crossing the difficult desert of economic development without the participation and participation of the people is no less than bringing a gambling lion.

For faster economic growth, the people must be made to believe that the nations that are developed today were once in a situation similar to ours. The people there are determined to achieve economic growth and have achieved it. If the nations of a particular region of the world can benefit from the benefits of development, then this task is not difficult for us either. All that is needed is for us, like the people of the developed world, to make a commitment, to make economic development our goal, to adopt new practices, then teachers, workers, lawyers, journalists, politicians, landlords, bankers. Has constipation. They raise prices arbitrarily whenever they want. With the skyrocketing prices, the system of resource allocation passes and exploitation takes place.

For effective planning, it is important to have a complete market system in the country so that resources can be utilized. Roofs and investment rates were able to play their full role. In the presence of market defects such as hoarding, inflation, scarcity, burglary, adulteration, monopoly, exploitation of agents or immovability, etc., the market is called a functioning market and there is no use of the legitimate and effective use of resources in the same market.

Market system

A prerequisite for economic development is a perfect market system in a developing country. The perfect market system is defined as:

• There are plenty of buyers in the market.
• There should be plenty of sellers in the market.
• Prices are determined by the forces of supply and demand.
• The birth agents are moving.
• The quality of the goods should be excellent.
• There are substitutes for things.
• None of the perpetrators, consumers, or salesmen are exploited.
• There should be no shortage or shortage of goods.

Resources are being allocated at cost. In a country where the market system is equipped with these features, the resources will be able to be devoted to the best possible goals. Appropriate resource allocation provides impetus for economic growth.

On the contrary, it has often been observed that in many countries the market system is devoid of the above characteristics. There are many flaws in the market system. Instead of those who buy and sell freely from a country, trade and the creation of wealth in the fields of monopolies, traders, religious leaders and other sections of the jihad can lead to economic development.

Capital supply

Factories and manufacturing establishments are essential for economic growth. These institutions cannot exist without capital. Therefore, the provision of capital becomes a matter of necessity. To estimate the required amount of capital, one has to take into account the rate of capital and production.

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