Economic development is measured on the basis of four criteria

Gross National Product (GNP):
(i) 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.
(ii) 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.
GNP per capita:
(i) This relates to increasing in the per capita real income of the economy over the long period
(ii) 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.
Welfare:
(i) Economic development is regarded as a process whereby there is an increase in the consumption of goods and services by individuals.
(ii) From the welfare perspective, economic development is defined as a sustained improvement in health, literacy, and standard of living
Social Indicators:
(i) Social indicators are normally referred to as basic and collective needs of the people
(ii) The direct provision of basic needs such as health, education, food, water, sanitation, and housing facilities check social backwardness.

1. Human Resources:
Human resource is named as human capital because of its power to increase productivity and thereby national income. There is a circular relationship between human development and economic growth.
2. Technical Know-how:
As the scientific and technological knowledge advances, more and more sophisticated techniques steadily raise the productivity levels in all sectors. Schumpeter attributed the cause for economic development to innovation.
3. Political Freedom:
The process of development is linked to political freedom. DadabhaiNaoroji explained in his classic work ‘Poverty and Un- British Rule in India’ that the drain of wealth from India under the British rule was the major cause of the increase in poverty in India.
4. Social Organization:
People show interest in the development activity only when they feel that the fruits of development will be fairly distributed.
5. Corruption free administration:
Corruption is a negative factor in the growth process. Unless the countries root-out corruption in their administrative system, the crony capitalists and traders will continue to exploit national resources.
6. A desire for development:
The pace of economic growth in any country depends to a great extent on people’s desire for development
7. Moral, ethical and social values:
These determine the efficiency of the market, according to Douglas C. North. If people are not honest, the market cannot function.
8. Casino Capitalism:
If People spend a larger proportion of their income and time on entertainment liquor and other illegal activities, productive activities may suffer, according to Thomas Piketty.
9. Patrimonial Capitalism:
If the assets are simply passed on to children from their parents, the children would not work hard, because the children do not know the value of the assets.

I. Classification on the Basis of Benefit:

7 pillars of effective governance:
NITI AAYOG