Measurement of Economic Development: Economic development is measured on the basis of four criteria
(I) Gross National Product (GNP):
1. GNP is the total market value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens (including income of those located abroad), minus income of non-residents located in that country.
2. GNP is one measure of the economic condition of a country, under the assumption that a higher GNP leads to a higher quality of living, all other things being equal.
(II) GNP per capita:
1. This relates to increase in the per capita real income of the economy over the long period.
2. This indicator of economic growth emphasizes that for economic development the rate of increase in real per capita income should be higher than the growth rate of population.
(III) Welfare:
1. Economic development is regarded as a process whereby there is an increase in the consumption of goods and services by individuals.
2. From the welfare perspective, economic development is defined as a sustained improvement in health, literacy and standard of living.
(IV) Social Indicators:
1. Social indicators are normally referred to as basic and collective needs of the people.
2. The direct provision of basic needs such as health, education, food, water, sanitation and housing facilities check social backwardness.
