Economic &

Drishti Social Development

Economic and Social Development : Various Dimensions
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Part-A Part-B Part-C Part-D
Economic Social External Demography
Development Development Sector

Part-A : Economic Development

Introduction
Ø Economic development is related to qualitative changes in economic needs,
goods and institutions etc.
Ø It is taken to be the structural transformation of an economy by introducing
more mechanised and updated technology to increase labour productivity,
income, employment & standard of living etc.

1. Economy : General Introduction

Concept of Economy
An economy is the system that shows the nature and level of
economic activities taking place in a country or a particular region.
In this, production, consumption and employment etc. of
goods and services by all sectors are included.

Classification of Economy Control Based Classification of Economy

↓
↓ ↓ ↓ ↓
↓ ↓ ↓
Capitalist Socialist Mixed
Control Develop- External-
Based ment Relation- ↓ ↓ ↓
Based Based Based on
Profit and Based on
↓
↓ ↓ ↓ market system Welfare of
Profit and Market
l Capitalist l Undeveloped ↓ ↓ (based on People system + Welfare
Economy and Open Closed Demand and ↓ of people
l Socialist Under- Economy Economy
Economy developed
Supply) Control of ↓
l Mixed Economy ↓ public sector Control of
Economy l Developing Control of (State) on private
Economy +
l Developed private resources
public sector
Economy sector on
(state) on
resources resources

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Development Based Classification of Economy Closed Economy
Undeveloped and Underdeveloped Economy
Ø A closed economy typically refers
Ø The word 'undeveloped' is used for that to a country that does not trade or engage
economy, where the scope (hopes) of in other financial exchanges
development is bleak. with any other country.
Ø While, the word 'underdeveloped' is used for
that economy, where the possibility of
development is enough.
Ø 'Undeveloped economy' is that economy, which Ø Example - North Korea etc.
has no capability of development and
'underdeveloped economy' is that economy, which
is reasonably developed.

Indian Economy
Developing Economy
ØIndian economy is a
Ø Due to monetary, technological and non- developing economy, which is
economic limitation in developing economy, fifth largest economy (as per
the level of income, consumption, savings and WEF report, September, 2022)
capital formation is low in comparsion to in terms of nominal GDP and
developed economy. the third largest economy in
terms of purchasing power
parity (PPP) in the world.
Developed Economy
Ø An economy, where all the three resources
of production (Natural, Human and Physical
resources) are available in abundance and their
optimal utilisation is going on, is called Post-Independence (1947-1909)
developed economy.
Mixed Economy
Welfarist Five
Socialist Year Plan
External Relations Based
Classification of Economy

Open Economy
Ø An open economy is one that Limited foreign trade
trades with other nations in goods
and services and most often, also in
financial assests. New Economic Policy - 1991
Ø Production, consumption and capital
formation is affected by external
Mixed Economy L → Liberalization
transactions.

Ø Minimum restrictions on import and export. P → Privatization

Ø Almost all the economies are open G → Globalization

economies of the modern world

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 Sectors of the Economy

An economy is divided into three sectors (Primary, Secondary and Tertiary sectors) on the basis of
economic activities, and it is called the sectors of the economy.

Sectors of the Economy : Three Sectors

↓
↓ ↓ ↓
Primary Sector Secondary Sector Tertiary Sector
↓ ↓ ↓
Agriculture and Allied Sector Industrial Sector Service Sector

l Transport and
l Agriculture l Forestry l Construction l Manufacturing Communication
l Trade

l Gas

l Insurance l Storage
l Water
l Fisheries l Mining etc. l Electricity Supply l Community services etc.

2. National Income
Definition
National income means the sum total of the monetary value of all final
goods and services produced by the people of a country in a financial year
National Income = Gross Domestic Product at market price (GDPMP) -
Depreciation - Net Indirect tax + Net factor income from abroad

National Income National Income related set

in National Income Accounting

Measurement
Type
Method
↓ ↓

Ø Gross Domestic Product (GDP) Ø Product method Ø Domestic or national

Ø Income method Ø Gross or Factor
Ø Gross National Product (GNP)
Ø Expenditure Ø Estimation at factor cost
Ø Net National Product (NNP) Method or market price
Ø Per Capita Income (PCI)

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 Gross Domestic Product Gross National Product
(GDP) (GNP)

Gross Domestic Product is the total monetary or Gross National Product is the total value of all
market value of all the final goods and services finished goods and services produced by a
within a country's geographical area during country's citizens (residents and non-residents)
a given period. in a given financial year.

Gross National Product (GDP)

GDP = Income earned by citizens in abroad - Income earned by foreigners in the country

Net Domestic Product Net National Product

(NDP) (NNP)

Net Domestic Product at market price (NDPmp) = Net National Product at market price (NNPmp) =
Gross domestic product at market price (GDPmp) – Gross National Product at market price (GNPmp) –
Depriciation Depriciation

Net Domestic Product at factor cost (NDPFC) = Net National Product at factor cost (NNPFC) =
Net Domestic product at market price (NDPmp) – Net National Product at market price (NNPmp) –
Net Indirect tax Net Indirect tax

Net Indirect Tax = Net National Product at factor cost

Indirect Tax - Government Subsidy (NNPFC) is called as National Income

Historical reference and measurement of India's National Income

ØDadabhai Naoroji was the first Indian ØNational Sample Survey Office (NSSO)
to estimate the national income of the Established in - 1950
country in the year 1868 and published
his book 'Poverty and Un-
British Rule in India' in 1901. ØCentral Statistics Office (CSO)
Established on - May 2, 1951
ØFirst time scientific estimation of
national income was done by V.K.R.V.
ØIn the year 2019 - NSSO + CSO = NSO
Rao in the year 1931-32
National Statistical Office (NSO)
ØAfter Independence, the National
Income Committee (1949) was formed to ØAs per Economic Survey 2021-22, the state
estimate the national income. The with the highest per capita income is Goa
committee was headed by P.C. during 2019-20
Mahalanobis

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 Income Method
National Income
Ø When national income is
Ø Measurement Method calculated on the basis of persons
income, it is called income method.
l l l
Product Income Expenditure
Method Method Method Note
Under income method, the transfer payments
(Pension, employment allowance etc.) and
income earned from illegal activities
are not included in the national
Product Method income

Expenditure Method
Ø The following three sectors are included
in Product Method - Primary, Secondary, Ø Under expenditure method all spending of the
economy by households and firms on goods
and Tertiary Sector. and services are added together to
Ø In the product method, the aggregate calculate the national income
annual value of goods and services produced Note
in a financial year is calculated. In expenditure method, the expenditure on
shares and bonds are not included.

3. Sustainable Development

Sustainable Development is development

that meets the needs of the present,
without compromising the ability of future generations
to meet their own needs
- Brundtland Report

Ø The World Summit on Sustainable

Development was held in Johannesburg,
Pillars of Sustainable Development South Africa, in the year 2002.

↓ Ø Sustainable Development Goal Index

↓
(SDG Index) is published by 'the UN
↓ Social ↓ Sustainable Development Solutions Network'.
Environment Economic
Ø India-Sustainable Development Goal Index
(India-SDG Index) is published by NITI Aayog.

Facts Ø The Paris Agreement is a legally binding

international treaty on climate change. It was
adopted at COP 21 in Paris, on 12 December,
Ø The United Nations Conference on 2015 and entered into force on 4 November, 2016.
Environment and Development, also known as Ø The International Solar Alliance (ISA) was
the 'Earth Conference (or Rio Conference) conceptualised on the sidelines of the
was held in Rio de Janeiro, Brazil, from COP 21 (Paris Agreement).
3-14 June, 1992 It was setup in 2015 in India.

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 Facts Related to Sustainable Development
mmission on
Ø In 1987, the World Co
me nt (WCED), which
Ø The word 'sustainability' was first Environment and Develop d a report entitled
she
was set up in 1983, publi
used in the year 1713 by Hans Carl Von n fut ure '. It is also known as
Carlowitz. 'Our commo
'Brundtland report'.

Ø The 'official' definition of sustainable

Ø The concept was first introduced by development was developed for the
Rachel Carson in the year 1962
first time in the Brundtland report in 1987,
in his book 'The Silent Spring'.
and it got the major international
recognition through this report.

Ø In 1968, Biologist Paul Ehrlich

highlighted the inter-relation among
population, resources, exploitation and nce on
environment through his book Ø The United Nations Confere
Dev elop men t (UN CED)
'The Population Bomb'. Environment and 2.
in Rio de Jan eiro in Jun e 199
convened

Ø United Nations conference on the Human

Environment, 1972 (Stockholm) - The First world Ø 2030 Agenda for Sustainable Development was
conference on environment adopted by all the members of United Nations
in September, 2015.
Ø Year 1980
l The World Conservation Strategy : Living Resource
Conservation for Sustainable Development
rd
Ø 3 edition of the Sustainable Development
Goals (SDG) India Index and Dashboard 2020-21:
Ø Published on - June 3, 2021
Ø Published by - NITI Aayog
Ø Top States - 1. Kerala, 2. Himachal Pradesh,
ship of
1 9 8 3 , u n d er the leader orld Tamil Nadu 4. Andhra Pradesh, Goa,
Ø In the 'W
Brundtland, Karnataka, Uttarakhand
Gro Harlem n Environment and Ø Bottom three states - 28. Bihar
o
Commission was established. 27. Jharkhand 26. Assam
el o p m en t'
Dev

Meaning of Sustainable Development Objectives of Sustainable Development

Economic development in Ø Conservation of Natural Resources

which resource use aims to meet
human needs while preserving Ø Nature Friendly uses of Technology
environment so that these
Ø End of Social Injustice
needs can be
met not in present, but also for Ø Decentralisation of Institutions
generations to come.
Ø Freedom from economic deprivation

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 Sustainability
Ø The best definition of
'Sustainable Development' was given in
Brundtland report (Our Common Future) Ø Sustainability
refers to ability to maintain
or a process continuously
over time.
Ø As per commission, 'Sustainable development l Do not misuse natural resources
is development that meets the needs of the l Do not imbalance environment
present, without compromising the ability of l Do not exploit environment
more than its capacity
future generations to meet their
own needs.

4. Sectors of an Economy
↓
↓ ↓ ↓
Primary Sector Secondary Sector Tertiary Sector
↓ ↓ ↓
Agriculture and Industrial Sector Service Sector
Allied Sector

On the basis of economic activities, the economy is divided into three sectors
(Primary, Secondary and Tertiary sectors) and it is called as sectors of an economy

(i) Primary Sector (Agriculture and Allied Sector)

Under this sector agriculture and agriculture related activities are included

Agriculture
l The science and art of cultivation on the soil,
raising crops and rearing livestock.
Organic Farming
l It is also called farming
Ø In organic farming,
Sericulture organic manure and
l Commercial rearing of silk worms
It may supplement the income of the farmer. natural pesticides
are used instead
Pisciculture of chemicals.
l Breeding of fish in specially constructed
tanks and ponds.

Viticulture Ø No genetic modification

l Cultivation of grapes
is done to
Horticulture increase the yield
l Growing vegetables, flowers and of crop.
fruits for commercial use.

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 Farm System Physical Inputs
Sunshine Rainfall
Inputs Processes Outputs
Temperature Soil
Human Slope
Inputs
Machinery
Storage

Labour
Seeds Crops
Machinery
Ploughing
Chemicals Sowing Chemical
Spraying

Agriculture in India

India is an agricultural country.

70 percent of rural households still depend
primarilly on agriculture for their livelihood.
The share of workforce engaged in the
agriculture sector is 54.6 percent
(As per the census 2011).
The Share of The Share of
agriculture in GDP agriculture in GVA at
was 55.4 percent Current Prices
(1950-51) is 17.8 percent
(2019-20)

The Share of the three sector

in Indian Economy (GVA)
↓
↓ ↓ ↓
Primary Sector (Agriculture Secondary Sector Tertiary Sector
and Allied Sector) (Industry) (Services)

↓ ↓ ↓
18.8% 28.2% 53%

↓ ↓ ↓

↓
As per Economic Survey 2021-22, in reference to the year 2021-22 (1st A.E.)

Pictorial Presentation 10 GS Drishti Economic & Social Development

 Agro-Climatic Zones in India

The Planning Commission had recommended that agricultural planning be done on

the basis of agro-climatic regions. For resource development, the country has been
broadly divided into fifteen agricultural regions based on agroclimatic features,
particularly soil type, climate including temperature and rainfall and its variation
and water resources availability.

15 Agro-Climatic Zones of India

1. Western Himalayan Division 8. Central Plateau and Hill Region

2. Eastern Himalayan Division 9. Western Plateau and Hill Region

3. Lower Gangetic Plain Region 10. Southern Plateau and Hill Region

4. Middle Gangetic Plain Region 11. East Coast Plain and Hill Region

5. Upper Gangetic Plain Region 12. West Coast Plain and Hill Region

6. Trans-Gangetic Plain Region 1 13. Gujarat Plain and Hill Region

7. Eastern Plateau and Hill Region 14. Western Plain and Hill Region

6 15. Island Region

14 5
2
8 4

13
3
7
9

Note :
Ø Each Plant 11
Grows only in
a Specific 10
Climate
12

15 15

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Classification of Crops based on Season Ø Classification of agriculture based on
geographical conditions, demand of product,
level of technology and labour
Ø Zaid Crops
Watermelon, Muskmelon, 1. Subsistence Farming
Cucumber etc. 2. Commercial Farming
l Sowing : March
l Harvesting : June
1. Subsistence Farming
Ø Kharif Crops ↓
Paddy, Maize, Jowar, Bajra, ↓ ↓
Tur (Arhar), Moong Cotton, Jute, Intensive Subsistence Primitive Subsistence
Groundnut and Soyabean etc. Farming Farming
l Sowing : June - July Small plot of land, (Shifting Cultivation
l Harvesting : March - April Simple tools and and
more labour Nomadic Herding)
Ø Rabi Crops
Wheat, Barley, Peas, Gram,
Mustard etc.
2. Commercial Farming
l Sowing : October - November Crops are grown and animals are reared
l Harvesting : March - April for sale in market. The area cultivated and
the amount of capital used is large.
Work is done by machines
↓
Problems of Indian Agriculture ↓ ↓ ↓
Commercial Mixed Plantations
Grain Farming Farming
Ø Anthropogenic Problems
l Population Pressure on Lands
l Social Environment
Crop Rotations
Ø Institutional Problems
l Low Size of Farm Holding Ø Crop rotation is the practice of planting
l Land - Ownership System different crops sequentially on the same plot of
land to improve soil health, optimize nutrients
in the soil and combat pest and weed pressure.
Ø Technical Problems or
l Lack of irrigation facilities
l Old techniques of farming Ø The growing of different crops on a
l Lack of improved seeds piece of land in a pre - planned succession
l Lack of credit facilities is known as crop rotation.
l Lack of storage

Importance of Agriculture in Indian Economy

Livelihood and Source

Contribution employment of
in National
sustenance
income
Source
of food
Source supply Capital
of income system formation etc.

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 Green Revolution

The Green Revolution was a government programme

of agriculture modernisation, which was started in 1960s.
It was based on high-yielding variety (HYV)
or hybrid seeds along with pesticides, fertilisers
and other inputs.

Green Revolution

Ø Green Revolution is a policy to Ø The father of 'Green Revolution' in India

increase the production in agriculture. - M.S. Swaminathan

Ø The green revolution in india was started in

Ø Uses of hybrid seeds instead of - 1966-67
conventional seeds.
Ø The biggest impact of the green revolution was in the
Ø Father of green revolution in the farming of Wheat and Rice.
World-Norman Borlaug Ø Green Revolution in India was most successful in Punjab,
Haryana and Western Uttar Pradesh.
Ø The term 'Green Revolution' was
first used in 1968 by a American Ø In the year 2006, the then President of India
Scientist William S. Gaud. A.P.J. Abdul Kalam suggested a second green revolution
at Science Congress.

Important
Crop Production Related
Agricultural
Area
Revolution
Crop Top producing Top in World
States of India (As per FAO, Green Revolution Food Grains Production
2021-22 2021)
(4th A.E.)
Grey Revolution Fertilizers Production
Rice West Bengal China
Pink Revolution Prawn Production
Wheat Uttar Pradesh China

Maize Karnataka U.S.A. Blue Revolution Fish Production

Soyabean Maharashtra Brazil White Revolution Milk Production

Sugarcane Uttar Pradesh Brazil

Yellow Revolution Mustard Production
Jute &
West Bengal India (Jute)
Mesta
Black Revolution Petroleum Production
Cotton Gujarat China (Cotton
Seed)
Red Revolution Meat/Tomato Production
Groundnut Gujarat China
Golden Revolution Fruits Production

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 th
Production of Major Crops (in Million Tonnes) 2021-22 (4 Advance Estimates)

Foodgrains (315.72)

Cereals (288.03) Pulses (27.69)

Rice Wheat Coarse Cereals Gram Tur Other

(130.29) (106.84) (50.90) (13.75 (4.34) (9.60)

Jowar (4.23) Maize (33.62) Bajra (9.62) Other (3.43)

Important Facts Related to Horticulture Crops Livestock and Fisheries

Horticulture Top producing States Ø As per the 20th Livestock

Crops (in reference to year 2020-21) Census, 2019

Litchi Bihar Ø West Bengal is the top state in terms

of cattle population
Mango Uttar Pradesh
Ø Uttar Pradesh is the top state in
term of milk and meat production
Guava Uttar Pradesh

Cashew nut Maharashtra Ø Andhra Pradesh is the top state in

terms of fish production

Betel Karnataka
Ø Andhra Pradesh is the top state in
terms of egg production
Coconut Kerala

Agricultural Finance

Agricultural finance (or Agricultural Credit) means providing loan facilities to farmers in rural areas.
Agricultural finance or agricultural credit refers to that finance or credit system,
which is used for various activities related to agriculture, such as - purchase of agricultural
machinery, making arrangements for irrigation, marketing related or
any agricultural related activities.

Pictorial Presentation 14 GS Drishti Economic & Social Development

 Sources of Agricultural Finance
↓
↓ ↓
Institutional Source Non-Institutional Source
↓ ↓
↓ ↓ ↓ ↓ ↓ ↓
Commercial Bank Cooperative Societies Government Moneylender Rural Banks Others

Classification of Agricultural Credit

↓
↓ ↓ ↓
Short-term loan Medium-term loan Long-term loan
(Provided for less than (Provided for 15 months - (Provided for more than
15 months) 5 years) 5 years)

Food Management Ø Buffer Stock

l It is the stock of foodgrains
Ø Minimum Support Price : (MSP) (only wheat and rice)
l MSP is a form of market
intervention by the Government of
India. Ø Storage
l To ensure agricultural production l Storage of foodgrains in
against any fall in farm prices. bulk and in proper manner.
l Announced by GoI at the
beginning of the sowing season for
certain crops Minimum Support Price (MSP)

Ø Market Intervention Scheme :

Ø Minimum Support Price
(MIS)
provides social security to
l In the case of a drop in market prices,
farmers against market risk.
MIS is a price support instrument for
the procurement of perishable and
horticultural goods, adopted at the
request of state governments. Ø At present, government announced
l Whenever, there is at least a 10% minimum support prices (MSPs) for
gain in production or a 10% fall in 24 crops and Fair and Remunerative
ruling rates over the preceding normal Price (FRP) for sugarcane.
year, it is implemented.

Ø Minimum Support Price (MSP) is

announced on the recommendations of the
Ø Procurement Price Commission for Agricultural costs and
l It is announced after the Prices (CACP).
harvesting of crop.
National Food Security Act, 2013
Ø Issue Price
l The price at which foodgrains is Ø To eligible person, rice, wheat and coarse
made available to the public by the grains are available at the prices of
government through the food Rs. 3, Rs. 2, and Rs. 1 per kg respectively.
corporation of India.
or
The price at which Food Ø It covers 75% of the rural population
Corporation of India sells its and 50% of the Urban Population.
foodgrains.

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