Question

Development is possible in the absence of growth in an economy. Discuss

Answer 1

The statement is indeed incorrect. Growth is a necessary condition for development but development is not a necessary condition for growth. Sadly, the second part of the statement is gaining importance recently as many economies are growing but the standard of poor in those economies is not improving and inequality is rising. One of the major ways of improving development outcomes is through improved education and health. All levels of government need funds for the same which are only available if the economy is growing. If the economy is not growing, development outcomes take a backseat, as the more urgent needs such as unemployment benefits, cor[ortae tax subsidies etc are provided to boost the economy. Any development that occurs without robust growth is not sustainable. There will be a point when the fiscal burden will catch up and dampen development. Growth also creates a mindset for development by creating expectations for the poor class.