Following are the different approaches with regard to national and economic development:
1. The Sociologist’s Approach:
According to sociologists national development is possible only if social changes take place along with economic changes and they go together.
2. The Economist’s Approach:
According to economists economic development is the pre-condition for national development. They consider increase in production, increase in per capita income and increase in national income as some of the indicators of economic and national development.
3. The Psychologist’s Approach:
According to the psychologists national development is a psychological ‘process. It takes place only it people of a country are ready to adopt new ideas and new ways of doing things.
Change in psychological aspects like change in attitude of the people and competitive spirit among people and excelling in competition etc., are essential for national development.
4. The Political Scientist’s Approach:
According to political scientists national development is a political process. They are of the firm belief that national development is not possible without political consciousness and maturity. Existence of democracy and secularism is essential for national development.
5. Role of planning in economic development
Planning is a part of our life. It is a process of ‘thinking ahead’ in determining needs and fixing goals, action plans, strategies and resources to achieve the said goals. We plan at every step and moment of our daily life.
After independence the need for planning was realised to modernize India and in 1950, the Planning Commission was set up and in the same year educational planning was introduced as a part of socio-economic planning.
Educational planning is the main tool in the hands of the perspective planners to achieve the ends of economic growth. For fast economic development, improvement in human quality is essential which is possible by educational planning only.
There is close relationship between economic development and planning. No country can develop its economy without proper planning.
It is the basic necessity in any social activity. We have to plan prudently and carefully at every step to economies resources, to avoid wastage and to achieve maximum output.
Planning Commission of India
“Planning is a way of organizing and utilizing resources to the maximum advantage in terms of defined aim.”
According to Gregory, “Planning in general may be sufficiently defined as an attempt to organize resources for the attainment of chosen ends. It is, in other words, purposeful action.”
According to Dickinson, “Planning is an organization which is connected with production, distribution and consumption.”
According to Kothari Commission, India is facing the following main problems in its economic development which can be solved by planning:
1. Problem of shortage of food grains.
2. Problem of unemployment.
3. Problem of political instability.
4. Problem of social and national integrity.
“Proper planning helps us in the following ways:
It results in better employment for better educated and trained persons, who help in more production.
Proper planning helps in making major technical, economic and political decisions.
Planning encourages people to make new innovations and inventions to develop technical knowhow and scientific advancement for practical purpose and increasing production.
Planning promotes division of labour and better use of machinery to increase production.
Planning helps in proper manpower planning.
Planning and economic productivity are positively highly co- related.
Planning is an integral and essential part of the development process.
Planning helps to think of future needs of the country
Planning improves the quality of manpower and raises the national income. It prepares the people for agriculture, science, industry and community life etc.
It removes ignorance and illiteracy and helps in the development of scientific attitude for progress. For national/economic development to take place, we must ensure the fulfillment of following essential conditions.
Removal of Scarcity of Capital
Paucity of capital is single most important reason of national backwardness and therefore the need is to augment capital supply by forming additional capital through cut in consumption and promotion of savings and investment in the country.
For economic and national development, it is essential that ratio of industrial to total output should be increased. This is possible only if we set up large scale industries and increase the production of cement, paper, coal, electricity, power, iron and steel, textiles etc. This requires speeding up the process of industrialization.
Inferior Quality of Human Resources
Low efficiency of labour, lack of education, malnutrition, bad health, lack of training, obstacles in occupational mobility are big hindrances in economic and national development.
Adequate supply of labour, training facilities and technical knowledge are essential to increase the productivity and efficiency of human resources.
Fuller utilization of human, material and natural resources
Economic and national development is possible only if we ensure optimum utilization of men, materials and natural resources.
The vast army of unemployed and uneducated people can be used for the creation of infrastructure in our country like construction of roads, bridges and houses and slum cleanse in villages and in urban areas.
Technological development is the key factor in economic development. Technological development implies new and sophisticated machines, modern technology, reformation in production methods and adoption of new methods of production in agriculture, industry and service sectors of the economy ensuring greater efficiency, cost reduction, higher profits, and more competitiveness in home and overseas markets.
Technological development needs constant research and development and increasing expenditure on education, training and research and development.
Widening of Market
Natural resources themselves cannot lead to economic development. For natural resources to assume economic value the complementary factors must be available in adequate quantity and at economic price and there should be sufficient demand for the resultant product. The need, therefore, is to increase the demand or widening the market for final products.
Population and Economic Development
There is close relationship between population and economic development. Size and quality of population greatly affects the economic development of a country.
Larger the size of population lesser is the per capita income and better the quality and smaller the size of population, higher the per capita income.
Size of population here refers to total population, composition of population in proportion of working force, proportion of males, females, children and old people and the rate of growth of population i.e., the net addition in population year after year.
Quality of population refers to factors like education, training and health of people. Only the optimum size and high quality of population can bring sustained increase in real per capita income over a long period of time resulting in economic and national development
Role of Planning
Planning is the most important tool in economic development. Planning ensures most efficient use of scarce economic resources in desired directions ensuring highest growth rates in minimum possible time, speeding up the process of economic and national development.
In underdeveloped countries like India an essential condition for economic development is change in whole structure of society. In this regard there is an urgent need to reduce the size of population and proportion of population engaged in the agricultural sector, to bring land reforms, to expand non-agricultural activities and the proportion of people engaged therein and to optimally utilize all available resources.
Lack of Entrepreneurship
For economic development to take place, it is essential that there is good number of entrepreneurs who are ready to take the risk of setting up industrial ventures in the country.
But unfortunately in underdeveloped countries like India the societies are traditions and customs bound and are divided on the basis of castes and creeds. In such a scenario, government can come forward and play the role of entrepreneur besides creating environment for private entrepreneurship.
Creation of Favorable Environment
Favorable atmosphere and environment is very important factor for economic development. Social, religious, legal and political institutions should act in a manner teacher in Emerging Indian Society that they create favorable environment for economic growth People must have a desire for economic progress and they must devote themselves for it, otherwise no amount of resources can ensure economic development.
Role of Education in Economic Development
Among all the economic and non-economic factors of economic development, education is perhaps the most important one. It has been observed historically that education provides the strongest base to economic development of a country.
It has been seen that those nations which have made huge investment in terms of education and human capital have emerged very strong and those who have neglected education have lagged behind in economic race.
History is the witness to the fact that Japan, England, Russia, U.S.A., Germany etc., have made all round progress only through the medium of education.
In India, during British rule, education was only theoretical and its practical aspect was not given due weight age. In Gandhiji basic system of education, the importance of education was realized for the first time and effort was made to make it the basis of economic and national development.
It was linked to life and became a means of satisfying the essential needs of life. However, this system was incapable of solving post independent burning problems facing the country.
Therefore our government tried to link it with productivity and stressed the practical aspect of education. Keeping this in view, Kothari Commission emphasized the vocational education and considered educational expenses as investment in education. It included work experience in curriculum and education came to be linked with life.
Education is an important instrument for bringing change in the society. There is close relationship between education and economic development. Adam smith and Marshall have already recognized the relationship between education, prosperity and development of mankind.
John Wezy has described this relationship as chicken and egg relationship. Harbison and Myers called this relationship as flower and seed relationship.
Kothari Commission has also stressed the need for linking education with productivity, considering education to be the most important factor in economic development. Education contributes directly and indirectly in economic development.
Its direct contribution is in the form of increase in production and productivity, increase in employment opportunities, mobility of labour and increase in superior labour force.
On the other hand its indirect contribution is in the form of family planning, development of national values, development of saving habit, formation of right attitude towards life etc.