GRADE 10 ECONOMICS

DEVELOPMENT

Notes

Development involves thinking about how life can be better for all and also about an equitable distribution
of resources.
It involves ways by which we can work towards achieving these goals of a better life for all.

What development promises-different people, different goals

▪ Different persons can have different developmental goals

▪ What may be development for one may not be development for the other. It may even be
destructive for the other.
▪ Each person seeks different things that are most important to them.
▪ For example, to generate more electricity industry may want more dams, but this may displace
tribals, who will then resent this.
▪ Income & other goals
▪ All people desire more income.
▪ Besides more income, people also seek things like equal treatment, freedom, security, and respect
of others.

Sometimes, these may be more important than more income because material goods cannot
satisfy every need.

The quality of our life also depends upon non-material things.

Though they cannot be measured, they are equally important.

(Example of 2 jobs-page 6)

▪ Similarly, for development people look at a mix of goals.

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

National Development

▪ Since individuals seek different goals, their idea about national dev is also different.
▪ Different persons could have different as well as conflicting notions of a country’s dev.
▪ There can even be different ways of developing.

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How to compare different countries?

• Development can mean different things, but some countries are generally called developed and
others developing, some under – developed.

▪ The criterion we use depends on the purpose of comparison.

▪ For comparing countries, their income is considered to be the most important.
▪ Countries with higher income are more developed than others with less income. As more income
means the ability to buy more of all the things that human beings need.
▪ Total Income of the country: is the total income of all the residents of the country.
▪ Since countries have different populations, comparing total income will not show what an average
person earns.
▪ Hence, we use average income to compare the economic status of people of different countries.
▪ Average income: Total income of the country divided by the total population. This is also called

PER CAPITA INCOME

Different countries have different populations, so comparison of total income will not show us
whether people in one country are better off than others in a different country.

Since countries have different populations, comparing total income will not show what an average
person earns.

Hence, we use average income to compare the economic status of people of different countries.

Definition: Per capita income or average income measures the average income (earned and
unearned) per person in a given area (city, region, country, etc.) in a specified year. It is calculated
by dividing the area's total income by its total population.

DRAWBACKS OF AVERAGES

Per capita income doesn’t tell us anything about the distribution of income.

2 methods to compare the development level of countries:

1. By the World Bank

2. By UNDP (United Nations Development Programme)

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1. The World Development Report by the World Bank uses Per Capita Income to classify countries as
rich countries, middle-income or low-income countries

Rich countries: Countries with per capita income of US$ 12,056 per annum and above in 2017

Low-income countries: PCI Less than US$ 955 per annum

India comes in the category of low middle income countries because its per capita income in 2017
was just US$ 1820 per annum.

▪ The rich countries (excluding Middle East) are generally called developed countries.

▪ PCI does not indicate how the total income of the country is distributed amongst its population.

Per capita income doesn’t measure various facilities and services that influence quality of life.
It is affected by size of population. Even with a large national income, per capita income will be low
if a country has large population.

Income and other criterion

When we think of a nation/region besides average income there are other equally important
attributes such as IMR, Literacy Rate, Net Attendance Ratio, not only PCI.

2. Human Development Report by UNDP:

The Human Development Report by UNDP tries to include other parameters to give a more
comprehensive assessment of development
The level of income is important, yet it is an inadequate measure of the level of development. So a
small number of the most important parameters, such as income, education and health are taken
into account by UNDP.
Income, health and education indicators are PCI, IMR, longevity, literacy rate, net attendance ratio

It then calculates the Human Development Index on which it ranks countries.

Human Development Report published by UNDP compares countries based on the educational
levels of the people, their health status and per capita income and calculates Human
Development Index on which it ranks countries.
So, though level of income is important, yet it is an inadequate measure of the level of
development.
Example table 1.6 on page 13
Definitions:
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1. HDI stands for Human Development Index. HDI ranks in above table are out of 177 countries in
all.
2. Life Expectancy at birth denotes, as the name suggests, average expected length of life of a
person at the time of birth.
3. Per Capita Income is calculated in dollars for all countries so that it can be compared. It is also
done in a way so that every dollar would buy the same amount of goods and services in any country.
4. Literacy Rate: The Census 2011 defines a literate person as, “a person aged seven and above who
can both read and write with understanding in any language.” The literacy rate is expressed as a %.

Definition: The Human Development Index (HDI) is a statistical tool used to measure a country's
overall achievement in its social and economic dimensions. The social and economic dimensions
of a country are based on the health of people, their level of education attainment and their
standard of living which is shown by PCI.
By pre-fixing Human to Development, it is very clear that what is important in development is what
is happening to citizens of a country.
It is people, their health, their well-being, that is most important.

The overall development of a country is based on many parameters such as standard of living,
technological advancements, living conditions, improvement in self-esteem needs, quality of life,
the creation of job opportunities, per capita income, infrastructural and industrial development,
GDP and much more.

One way to calculate Body Mass Index ( BMI )

Take the weight of the person in kg.
Take the height in metres.
Divide the weight by the square of the height.

Public Facilities

Refers to the basic facilities which are provided by the government to the people of the country at
prices that can be afforded by all.

Public facilities are crucial for development as money in your pocket cannot buy all the goods and
services that you may need to live well.

So, income by itself is not a completely adequate indicator of material goods and services that
citizens are able to use.

For instance, your money cannot buy you a pollution-free environment, unadulterated food,
protect you from infectious diseases.
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The best and cheapest way is to provide these goods and services collectively. For example,
railways, schools, roads, airport, hospitals etc. The govt plays a very imp part in providing facilities
like roads, schools, hospitals etc

Example: Kerala has a low IMR and higher literacy ratio because it has better infrastructure of basic
health and educational facilities.

Everyone is entitled to basic facilities for ensuring that economic development takes place
If everyone in the country is not able to get the basic facilities and maintain a minimum standard of
living, the country will not be able to progress on the path of development
Developing countries generally face the problem of unequal distribution and, hence, most people
rely on the services provided by the government as it is affordable by all

Sustainable development
Sustainable development is the organizing principle for meeting human development goals while
simultaneously sustaining the ability of natural systems to provide the natural resources and
ecosystem services on which the economy and society depend.
It is the idea that human societies must live and meet their needs without compromising the ability
of future generations to meet their own needs.

Sustainability plays an important role in the modern society. The meaning of sustainability is that
the society or country can “sustain” its development and activities in a way that is not harmful to
others and ensures that the future generations can enjoy their life as we do now.
When a country is developed, it needs to develop further or at least maintain that level of
development for future generations. For that it needs resources.
If a country is developing, it needs resources to attain high level of development.
So, without resources, development is not possible.
But scientists have warned that the present type of development levels are not sustainable.
Development would only make sense if it is sustained. If a country can’t progress year after year, its
economy will cease to develop.
For sustained development, it is necessary to have the essential resources such as water, power,
fuel etc. in continuous supply.
Owing to human greed and needs, these resources would soon become extinct. If the use of these
resources is not controlled and substitutes are not found, it will be very difficult for our future
generations to flourish and progress.
Non-renewable resources are those which will get exhausted after years of use. We have a fixed
stock on earth which cannot be replenished.
We do discover new resources that we did not know of earlier. New sources in this way add to the
stock. However, over time, even this will get exhausted.
Hence sustainability is important.
Consequences of environmental degradation is a world-wide problem.
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The future of all countries is linked together.
Sustainability of development is comparatively a new area of knowledge in which scientists,
economists, philosophers and other social scientists are working together.
In general, the question of development or progress is perennial.
At all times we need to ask where we want to go, what we wish to become and what our goals are.
So the debate on development continues.
This means we have to set our goal, and decide the path we will take to accomplish it. As there are
many paths that can be taken, the debate is which path to development we will choose.