X Chapter 1 Economics Development

 

 

Chapter 1

Economics

Development

Characteristics (Aspects) of development.

1. Different people have different developmental goals.

2. Development goals may be common, different or conflicting.

(What may be development for one may not be development for the other)

3. For development people look at a mix of goals.

 

 (I) Different notions - Different people  have different developmental goals - (notions of development) because

v Their requirements are different, depending upon their occupation, location and social status in the society.

v Hence, the main reason for different notions of development is that the life situations of people are different.

v People seek things that are most important for them, i.e. things that can fulfil their aspiration or desires.

Examples:

(a)  Development for a farmer might be proper irrigation facilities.

(b)  For an urban youth, it may be employment.

(c)  For a landless labourer, it may be (a) Regular income, Regular job, small piece of land, Equal status in society.

(d)  For a girl, it might mean gender equality or more freedom.

 

(ii) What may be development for one may not be development for the other.

It may be even destructive for the other.

For Example, the establishment of a dam leads to infrastructural development but this may force many people to shift out of the village, hence it may not be development for them.

 

(iii) For development people look at a mix of goals.

Like if women are engaged in paid work, their dignity in the household and society increases. However, it is also the case that if there is respect for women there would be more sharing of household work and a greater acceptance of women working outside. 

A safe and secure environment may allow more women to take up a variety of jobs or run a business.

the developmental goals that people have are not only about better income but also about other important things in life.

 

Development goals may be common, different or conflicting:

(i)  Common Goals: There are some needs which are common to all like income, freedom, equality, security, respect, friendship etc.

(ii)  Different Goals: Development or progress does not mean the same thing for every individual. Each individual has his own idea of development. For example, development for a farmer might be irrigation facilities; for an unemployed youth it may mean employment opportunities, etc.

(iii)  Conflicting Goals: What may be development for some may become destruction for some others. Example: Industrialists may want dams for electricity but such dams would displace the natives of a region by submerging their land.

 

Previous Questions

 

1.     Which three development goals will you like to prescribe for rural labourers ? 2015

2.     “Different persons can have different developmental goals.” Support the statement with an example.2011

3.     Explain common, different, and conflicting goals by giving appropriate examples. 2012

4.     Why do different individuals have different as well as conflicting notions of development

Goals ?2014

5.     “For development, people look at a mix of goals”. Support the statement with three suitable

examples. 2011

6.     Mention any three characteristics of development.   2011

7.     What is development? Why do different people have different developmental goals? Explain with four examples.

 

Development

v Development is a positive growth/change in economic, social and political aspects of the country.

v Development is the sum total of income plus quality of life.

v One common thing among all people is the desire for more income. With this income they buy goods and services for their daily needs.

v Quality of life depends on non-material things also. Like Equality, freedom, better education and health facilities respect regular employment, good working atmosphere at the office, a safe and secure environment. Example – A job may give you less pay but may offer regular employment that enhances your sense of security.

 

(a) Economic development

(b) Human Development

(c) Social Development

 

Economic development. 

v Economic development is a sustained increase in real per Capita income.

v It promotes economic welfare by reducing poverty, unemployment & inequalities in distribution of Income.

v Two basis of measuring economic development are National Income & per Capita Income.

 

(b) Social development

(b) Social development which include education, health and public services.

 

(C)Human Development

1. It refers to human centered approach towards development.

It focuses on people & qualitative improvement in human life.

2. It is indicated by human development index.

3. It is a under term & includes economic development also.

4. It considers human welfare should  be increased through investments in education & health.

 

Economic Growth

1. It refers to sustained increase in real per capita income that promotes economic welfare by reducing poverty, unemployment & inequalities in distribution of income.

2. It can be indicated by national income & per capita income. Two basis of measuring economic development are National Income & per Capita Income.

3. It is narrower term as compared to economic development.

4. It considers people can be made better off by   increasing their command over goods and services.

 

Economic development and Human development  

v Human development refers to the process of improvements in human beings.

v People become human resources when investments in them are made in form of health and education.

v Life expectancy at birth, adult literacy rate, per capita GDP are important indicators of human development.

v Economic development will be sustainable if resources are managed in such a way that future generations do not suffer and have at least the same which present generations have

 

Economic growth & Economic development

Economic growth can be defined as a process whereby a country’s real national income increases over a period of time. Economic growth may not be sustainable . It may compromise with environment and sustainability. it does not focus on equal income distribution

On the other hand economic development is a process of long-term increase in income as well as with achieving a more equitable income distribution and poverty alleviation.

Thus economic development is a wider concept than economic growth.

 

Previous Questions

Explain the sectors on which the quality of life depends. 2015

 

National Income

v For comparing countries, their income is considered to be one of the most important attributes. Countries with higher income are more developed than others with less income.

v This is based on the understanding that more income means more of all things that human beings need. Whatever people like, and should have, they will be able to get with greater income. So, greater income itself is considered to be one important goal. Now, what is the income of a country? Intuitively, the income of the country is the income of all the residents of the country. This gives us the total income of the country.

 

Limitation

 

v However , for comparison between countries, total income is not such an useful measure. Since, countries have different populations, comparing total income will not tell us what an average income of  person is likely to earn.

v Hence, we compare the average income which is the total income of the country divided by its total population. The average income is also called per capita income.

 

 

Per Capita Income

v It is obtained by diving national income by the population of a country i.e.

v Per Capita Income = National Income / Mid Year Population

v It is also known as the average income of the country

v It is the most common indicator for measuring economic development

 

 

Two basic criteria used for comparing countries

The two criteria used for comparing development  are :-

(i) On the basis of per capita income: -WORLD BANK

(ii) On the basis of Human Development Index: -  by UNDP

 

World Bank

 

v compares the different countries only on the basis of the income criterion.

v World bank publish World Development Report (WDR).

v Per Capita Income: It is calculated in dollars for all countries so that it can be compared.

v The World Bank uses ‘ ‘Per capita’ ’ income as the sole criterion for measuring development of countries.

 This criterion is used for classifying countries.

 

World Bank classifies different countries on the basis of per capita income.  In World Development Report 2012, brought out by the  World Bank, They are —

(i)Countries with per capita income of US $ 12616 per annum and above are called rich countries.

(ii)  Countries with per capita income of US $ 1035 or less are called low-income or poor countries.

(iii) Countries with income between these two are called  middle income countries.

 

It is not fully accurate. (Limitations)

v This indicator is inadequate as it does not provide full picture of development. This gives poor people a notional amount of money which actually does not belong to them.

v It considers only income and not other aspects such as literacy, health, life expectancy, etc.

v World Development Report (WDR) only tells about  income and not how it is distributed among the citizens

For example,

in India suppose two people live; one is Mukesh  Ambani and other is a rickshawpuller. Income of Mukesh  Ambani is Rs. 50 crore annually while that of rickshawpuller is only Rs. 12000. But when per capita income is calculated then both will be showing having 25 crore and 6 thousand each, which is not true.

 

UNDP & HDI

v uses a much more realistic method to measure the development. That is HDI. It provides real development status of the country .

v Human Development Index means the criteria developed by the UNDP to compare the country’ s development out of 177 countries.

 

The main components of Human Development Index are :-

(i) Educational levels of the people – Expected years of schooling , Mean years of schooling

(ii) Health status of the people-  life expectancy at birth

(iii) Per capita income(PPP $)

 

Human Development Index (HDI) :

v It makes rating of all countries on a scale of 0 to 1.

v 0 indicates lowest human development and 1 indicates highest human development.  Two important points about HDI are

v It measures relative and not absolute level of human development.

v The main emphasis of HDI is on goals, i.e. longevity , knowledge and standard of living(expressed in real per capita income).

v Life Expectany at Birth: It denotes average expected length of life of a person at the time of birth.

Who Prepares HDI : United Nations Development Programme (UNDP) has since 1990 been preparing HDI

 

Improvement in HDI

The three efforts which could be made by any country to improve its HDI are:

(i)  providing 100% literacy to the people.

(ii)   improving health facilities.

(iii)  creating a pollution free environment.

Importance

 

(i)  It indicates the level of development of a country.

(ii)  It indicates to a country how far it has travelled and how far it has yet to travel to achieve high

ranks in matters such as per capita income of the people.

(iii)  One comes to know the important welfare elements such as life expectancy, literacy, educational

level of people and health status.

 

Previous questions

 

1.     In what respect is the criterion used by UNDP for measuring development different from the one used by the  World Bank? 2010, 201 1

2.     Explain the concepts of Human Development Index (HDI)and that of the per capita income. 2011

3.     What is the main criterion used by the World Bank in classifying different countries? Write the limitations of this criterion. 2010

4.     State the criterion used by the World Bank as per World Development Report 2012, in classifying.

5.     the countries. How did the World Bank define low- and high-income countries (based on this

report)?  2014

6.     What is the most common indicator for measuring economic development of a country? 2014

7.     Describe any three features of a developed country. 2013

8.     Explain the terms: Net attendance Ratio and  Literacy Rate. 2014

9.     Besides income, what can be the other attributes to compare economic development? 2012

10. Explain the concept of ‘Human Development’ with an example.

11. State any three factors other than income that are important in life. 2014

12. Which three efforts should be made by any country to improve its HDI?2015

13. Explain the three components of Human Development Index. 2014Or

14. Write the importance of human development index in three points .2012

15. Write a note on Human Development Index. 2011 2013

 

Social indicators of development

Although the level of income is important indicator of development, it is an inadequate measure of the level of development. Other social indicators are :

v Health and Education: People become human resource when investments are made in their health and education.

v Literacy Rate: It measures the proportion of literate population in the 7 and above age group

v Gross Enrolment Ratio: It shows enrolment ratio in primary schools, secondary schools and in higher education.

 

v Sex ratio: Sex ratio is defined as the number of females per thousand males.  An ideal sex ratio should be more or less equal number of males and females. Sex ratio in favour of males indicates sex discrimination which goes against development.

 

v Infant Mortality Rate (IMF): It indicates the number of children who die before the age of one year, as a proportion of 1000 live children born in that particular year.

 

v Net Attendance Ratio:

It is the total number of children of age group 6-10 attending school as a percentage of total number of children in the same age group.

 

v BMI** - Body mass index

Dividing the weight by the square of the height in meters. 

B.M.I. =  Weight in Kg./ (Height in meters)²

 

Kerala & Punjab

Kerala has lower per capita income but better human development ranking than Punjab

because of many factors. Kerala has the highest literacy rate in the country .  The Infant Mortality Rate of Kerala (11) is much less than Punjab (49). Net Attendance Ratio of Kerala

(91) is higher than that of Punjab (81). Kerala has better health and educational infrastructure than Punjab. Kerala also has better public facilities.

 

Middle East countries

Although countries of Middle East are very rich countries due to oil reserves and production,money alone is not an indicator of development.

Along with money there are other aspects too like education and other social aspects like individual freedom, democracy, gender equality which are not available in those countries

Explain with reasons why state of Punjab with a very high per capita income has a very low literacy

Rate. 2015

Why are countries of the Middle East not called ‘developed’ in spite of high per capita income? [2011

 

Steps taken by the Indian government to uplift status of women

 (i) Women are given the equal right to vote like those of men

(ii) the government of India has declared dowry as illegal and now no one can force the other party to give dowry.

(iii) To impart education to girls’ various schools and colleges have been opened.

(iv) Gender empowerment focusses on opportunities and participation in decision making process and values.

(v) Women have been recognized as a separate target group in our development planning, for raising their status at par with that of men. To achieve the above objective the National Commission for women was set up in January 1992.

 

Reasons for need of environment friendly economic growth are:

(i) Present production technology has polluted atmosphere and water bodies with garbage, smoke and poisonous gases.

(ii) Rapid economic growth and industrialization have led to natural resources (like fossil fuels).

 

Suggestions to achieve it:

(i) Increased use of renewable and clean sources of energy, less use of fossil fuels, organic farming.

(ii) Measures to reduce global warming and global limits on carbon emissions etc.

 

Reason for the overuse of resources can be:

(i)  over population.

(ii)  lack of awareness.

(iii)  excessive use of tube wells, canals etc. for irrigation.

(iv)  industrial need. 

 

Sustainability

v Sustainable development is all about judicious use of resources at present keeping in mind the future requirements of the coming generation.

v The concept of sustainability explains the rational use of natural resources in such a manner that what we achieve today should not be at the cost of what ought to be achieved tomorrow.

v It takes place without damaging the environment Sustainable development lays special emphasis on environmental protection. Sustainable development is used for both developed and under developed economies.

 

Importance

 

The issue of sustainability is important for development because of the following reasons:

(i)  Resources remain continuously available for human use so that cycle of development goes on.

(ii)  Reserves of mineral oil and ground water are depleting with a rapid pace.

(iii)  Conservation and preservation have become the need of the hour for the coming generations.

(iv)if all development activities are carried out without paying attention to environment and other natural factors then development itself will become a danger for mankind.

 

To achieve sustainability

 

(a) we must be less dependent on non-renewable resources.

Increased use of renewable resources. Less use of fossil fuels.

(b) we must live according to natural conditions and use natural produce as far as possible.

(c)  Controlling over uses and creating an awareness to provide sustainable development.

(d)  Introduction of organic farming.

(d)  Adopting measures to reduce global warming.

(e)Environment must be conserved while development is taking place.

(f)Resources must be used in such a way that  they are conserved for future generations

The present resources must be used judiciously, with planning, and overexploitation should be

Avoided.

 

“The Earth has enough resources to meet the needs of all but not enough to satisfy the greed of even one person.” – Mahatma Gandhi

The concept of sustainability explains the capacity to use the resources judiciously and maintain their balance. Thus, sustainability is a matter of sharing development opportunity and not the poverty and human deprivation. If the present is miserable and unacceptable to the majority of the world’s people, it must be changed before it is sustained.

Every generation wants to get the maximum benefits from the available resources but it would be disastrous because the available resources will be exhausted at a rapid speed and in such circumstance the future generation will be deprived of such resources.

Resources such as mineral wealth, iron, gold, copper, silver etc. are exhaustible; hence we should use them judiciously.

 

Previous Questions

1.     What is sustainable development? Why is the issue of sustainability important for development?  Explain. 2015

2.     Suggest any three measures for sustainable development.   2015

3.     The issue of sustainability is important for development”. Explain. 2014

4.     Explain the importance of sustainable development by giving the example of ground

Water .2014, 2012

5.     Why is the issue of sustainability important for development? Explain. 2011

 

Present & future sources of energy

v Coal, petroleum products, electricity are some of the present sources of energy used by people in India.

v Petroleum products and coal are non-renewable sources of energy.  These natural resources would be exhausted after a few years if they are not used judiciously.

v Possibilities for energy sources after fifty years can be nuclear energy from radio-active elements, solar energy, wind energy etc.  Wind, sunlight are non-exhaustive resources which may be utilized without interruption for years and years.’

 

Public facilities

Public facilities are those which are provided by the government to satisfy collective needs of the people. Example – schools, hospitals, community halls etc. It is the best and the cheapest way to provide these goods and services collectively .

 

Importance of public facilities in development

 

Public facilities are essential for the social and economic development. Economic development and social development are both dependent on public facilities such as education, health etc. Without these people cannot achieve their full potential. Some important public facilities are :–

(i) Construction of roads, railways, generating electricity, developing ports etc.  These are used by people so they have to be developed.

(ii) Providing essential goods at cheap rates or below their cost price so that even poor people can afford them. Such activities have to be undertaken by the government.

(iii) Providing adequate health and education facilities to each and every citizen is a primary duty of any government. Such services are essential because a healthy and educated citizen is an asset for the country .

(iv) Providing safe drinking water, housing and nutritious food to children etc., are other such public facilities which are essential.

 

Previous Questions

 

Why are public facilities needed for the development of the country? Explain any four public facilities. [2010 (T -1)]

 

Role of Health in Development.

Unhealthy persons become a liability and healthy persons prove an asset for the economy.

Therefore, improvement in the health status of the population is regarded very essential.

Improved health contributes to economic growth in the following ways :

(i) It reduces production loss caused by worker’s illness.

(ii) It increases the efficiency of workers.

(iii) It permits the use of natural and other resources.

(iv) It increases the enrolment of children in schools and makes them better able to learn.

 

 

Role of education in human capital formation

Education is the most important component of human resource development. The role of

education in human capital formation can be judged from the following facts :

(i) Education increases labour productivity.

(ii) Education modifies /improves human behaviour.

(iii) It develops personality and sense of national consciousness among the people which are

important for rapid economic growth.

(iv) It promotes science and technology.’

 

 

Efforts made by the Government in the field of health

Efforts made by the Government in the field of health can be summarised as follows:

(i)  The life expectancy of birth in India has more than doubled in the last fifty years. It has reached nearly 62 years.

(ii)  In the plan-period, the mortality rate has declined to nearly 9 per thousand and infant mortality has come down to 70 per thousand live births. Similarly, maternal mortality rate has also declined.

(iii)  Efforts have been made to overcome the nutritional problems in the country and considerable progress has been achieved.

(iv)  Smallpox has been completely eradicated and malaria, tuberculosis, leprosy, filaria, etc. have also been controlled to a large extent

 

Explain the role of education and health in the overall development of a country. 2013

 

************