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.
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.
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.
P Kindleberger observed, “Economic growth means more output and economic development implies both more output and changes in the technical and institutional arrangements, by which it is produced.” As per this view, the term growth implies higher level of output as well as achievements in terms of increase in the volume of economic variables. These propensities are: (1) Propensity to develop fundamental services, (6) Propensity to have children.
Accordingly, Kindleberger further observed, “Growth involves focussing on height or weight, while development draws attention to the change in functional capacity.” Although some economists have observed slight differences between economic development and economic growth but all these differences are imaginary and unreal and thus have little practical value. Arthur Lewis has rightly observed, “Most often we shall refer only to ‘Growth’ but occasionally, for the sake of variety to ‘Progress’ and ‘Development.’ By economic development we mean attainment of higher level of productivity in almost all the sectors and a better level of living for the general masses. All these propensities are showing a clear-cut picture of determinants of economic growth neglecting the non-economic factors totally.
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.