1] It increases the standard of living of the people.

2] Redistribution of income and wealth becomes easy. Through government intervention the benefits of economic growth may be more equally distributed
(because if existing national income is not equally distributed it would decrease standard of living of some people).

3] Higher incomes will enable the consumer to enjoy more goods and services. Therefore poverty in developing country will reduce.

4] Lower unemployment – with higher output firms tend to employ more workers creating more employment. This would also improve working conditions for workers.

5] Lower government borrowings- Economic growth creates higher tax revenues and there is less need to spend money on benefits such as unemployment benefits etc. Therefore economic growth helps to reduce government borrowings. Economic growth also plays a role in reducing debt to GDP ratios.

6] Improved public services – with an increase in tax revenues government can spend more money on national health services and education etc.

7] Money can be spent on protecting environment – economic growth has allowed more sensitivity towards environment concerns and the ability to deal with them.

8] It helps the nation to become self-dependent and self- reliant – especially during war depression etc.

9] It is a symbol of international economic prestige – every nation wants to be graded higher in the international gradation of economic growth of the countries.

10] Economic growth allows more leisure and less alienation from work.



Tagged with: ,
Posted in Indian Economy