DEVELOPMENT ( ECONOMICS)

Important terms
1. Per capita income :- it is obtained by dividing national income of the country by
the population
Average income = national income / population
2. Infant Mortality Rate (or IMR) indicates the number of children that die before
the age of one year as a proportion of 1000 live children born in that particular
year
3. Literacy Rate measures the proportion of literate population in the 7-and-above
age group.
4. Net Attendance Ratio is the total number of children of age group 14 and 15
years attending school as a percentage of total number of children in the same
age group.
THE NOTIONS 0F DEVELOPMENT
● Persons depending on their present status and situation have different views
about development
● Different notion will prevail if people come from different backgrounds like
rich and poor family , rural or urban etc
Eg:-
Landless rural labour development goals are :=
● More days of work
● Better wages
● Economic and social equality
For rich family development goals are
● Higher family income
● Better education to their children
● To settle their children abroad
CLASSIFICATION OF COUNTRIES BY THE WORLD BANK
● Countries with per capita income of US$ 49,300 per annum and above in 2019, are called
high income or rich countries
● with per capita income of US$ 2500 or less are called low-income countries
● India comes in the category of low middle income countries because its per capita income in
2019 was just US$ 6700 per annum

AVERAGE INCOME AS A TOOL OF COMPARISON

For the comparison between countries total income is not a useful measure since,
● Countries have different populations,
● Comparing total income will not tell us what an average person is likely to earn
● Hence , we use the average income which is the total income of the country by total
population
KERALA HAS LOW INFANT MORTALITY RATE
This is because ,
● it has adequate provision of basic health and educational facilities
● other public facilities along with income public, facilities like health care,
educational facilities, PDS etc, are also very important to have a better standard of
living
DIFFERENT PERSONS HAVE DIFFERENT NOTIONS
OF DEVELOPMENT
● People have different notions of development because
● People are different
● Life situations of people are different
● The above given factors implies almost the different persons could have different as
well as conflicting development al goals
● Eg :- in Gujarat govt is in favour of Narmada project while the people who are
adversely affected by the dams are opposing this . This created tension in the state

SUSTAINABLE DEVELOPMENT
Sustainable means something which is not short lived but can continue in future
also

OBJECTIVES OF SUSTAINABLE DEVELOPMENT

● Sustainable rise in the real per capita income and quality of life
● Reduction I pollution
● Rational use of natural resources
● To fulfill the requirements of future generation

SECTORS OF INDIAN ECONOMY ( Eco 2)

In every country, the people are engaged in various activities , based on this
activities its mainly classified in to three
1. Primary sector :-
 ● It consists of all activities directly related to nature and natural resources
● It is called primary because it forms the base for all other products that we
subsequently make
● It also called agricultural and related sector
● Eg:- farming , mining , fishing , dairy farming etc
2. Secondary sector
● It includes activities in which natural products are changed into other forms
through the way of manufacturing
● Raw cotton to cotton, sugarcane to sugar etc
3. Tertiary sector
● These are activities that help in the development of Primary and secondary
sectors.
● These activities by themselves do not produce goods but there isn an aid or
support for the production process .
● This sectors is also called service sector
● Eg:- banking, insurance , transport etc
COMPARE THE EMPLOYMENT CONDITIONS PREVAILING IN
THE ORGANIZED AND UN ORGANIZED SECTORS
ORGANIZED
● Workers have job security
● Workers get regular monthly salary
● Rules and regulations are followed here
● Workers get benefits like provident fund, paid leave, medical benefit \
● Working hours are fixed
● Working conditions are favourable
UNORGANIZED
● Workers have not have job security
● Workers get daily wages
● Rules and regulation are not followed here
● Workers do not get any such benefit
● Working hours are not fixed
● Working conditions are not favourable

DISTINGUISH BETWEEN PUBLIC SECTOR AND

PRIVATE SECTOR
PUBLIC SECOTR PRIVATE SECTOR
● Aims at increasing the facilitates for public welfare * maximum profit
● The govt own most of the asset * own and control by an individual

Or group of people or companies

● Eg Indian railway post office eg:- * Reliance

DISTINGUISH BETWEEN OPEN UNEMPLOYMENT

AND DISGUISED UNEMPLOYMENT
OPEN UNEMPLOYMENT
● When a person has no job in hand and does not earn anything at all, it said to be a situation
of open unemployment
● It is clearly visible
DISGUISED UNEMPLYMENT
● This type of unemployment is generally found in unorganized sector, where either found in
unorganized sector, where either the work is constantly not available or more than
required people are employed for a work
● It is hidden

EXPLAIN THE OBJECTIVES OF IMPLANTING THE

PMNREGA 2005
● Implemented by central government
● It was passed for promoting rural employment
● It ensures 100 days of employment in a year by the government
● If the govt fails to provide employment then the person whose name is registered under this
act will be given unemployment allowance
● Initially , It was applicable to only 200 districts, now it is extend to 600 districts of India

EXPLAIN HOW PUBLIC SECTOR CONTRIBUTES

TO ECONOMIC DEVELOPMENT OF A NATION
● It promote rapid economic development through creation and expansion of infrastructure
● It create employment opportunities
● it create financial resources for development
● it ensures easy availability of goods at moderate rates
● it encourages, development of small , medium and cottage industries
sectors of Indian economy
 MONEY AND CREDIT
CHAP 03

1. Define barter system: - it refers to exchange of goods for goods (commodity for
commodity)
2. Define double co- incidence of wants:- in barter system both parties have to agree to
sell and buy each other’s commodities . This is known as Double coincidence of wants
3. How does money solve the problem of Double coincidence of wants?
* Money provide a medium of exchange in modern economy
* A person holding money can easily exchange it for any commodity or service he or she
wants
* Every one prefers to receive payments in money for things that they want
Eg:- A shoe maker need not search for a farmer to sell his shoes to get what .He can sell
it to anyone who need shoes for money and then buy wheat by paying money in the
market
4. What are called terms of credit? Explain
Terms of credit refers to the conditions under which a credit or loan is granted to the
borrower by the lender this include s
 Interest :- the rate which is charged on the amount borrowed
 Collateral and documentation:- this means that the borrowers has to give
security against the loan and sign in some documents
 Duration of loan :- this means the number of years the borrower will take to
repay the loan
 Mode of repayment :- this means that the borrower can repay the loan in
equal monthly installment or another form
5. what are different forms of money ?
* currency notes coins, demand deposits and cheque

Define cheque
A cheque is a paper instructing the banks to pay a specific amount form the
persons account to the person in whose name the cheque has been made
 6. what are the functions pf commercial banks
Accepting deposit:- people can deposit their surplus money with banks in
the form of demand deposits
 Giving loans :- banks give loans to people form the deposits by charging a
normal interest rate\
6. Different between formal and informal sources of credit
Formal*
*loans form banks and cooperatives
*Reasonable interest rate is charged
*Under the supervision of the central banks
*Lot of formalities are required to get a loan
INFORMAL SORUCES
 Loans form money lenders, traders etc\
 High interest rate is charged
 No organization to supervise the activities
 Limited or no formalities required

7. Functions of RBI
* commercial banks have to maintain a minimum cash balance out of the deposits
they receive with the reserve bank
RB sees that banks give loans not just to profit making businesses and traders but
also to small cultivators, small scale industries
 Banks have to submit information to the RBI on how much they are lending
to whom and at what Interest rate

Self Help Groups for the Poor

Poor households continue to rely on informal sources of financing for the
following reasons:
 In rural India, banks are not widely available.
 Even if banks are present, obtaining a bank loan is substantially more
difficult because adequate documentation and collateral are required.
Advantages of Self Help Group (SHG):
 It assists borrowers in overcoming the lack of collateral issues.
 SHGs are the foundations of the rural poor's organization.
  People can receive loans on schedule and at a fair interest rate for a
number of objectives.
 It assists women in becoming financially self-sufficient.
 The group's frequent meetings give a forum for discussing and taking
action on a variety of social concerns such as health, nutrition, domestic
violence, and so on
GLOBALISTION AND THE INDIAN ECONOMY
CHAP 04
Globalisation is the process of rapid integration or interconnection of countries. MNCs
are playing a major role in the globalisation process.

 More and more goods and services, investments and technology are moving between
countries.
 There is one more way in which the countries can be connected. This is through the
movement of people between countries.

Factors That Have Enabled Globalisation

Technology

 Rapid improvement in technology has been one major factor that has stimulated
the globalisation process.
 This has made possible much faster delivery of goods across long distances at
lower costs.
 The developments in information and communication technology have made
information instantly accessible

Liberalisation of Foreign Trade and Foreign Investment Policy

 Trade barriers are some restrictions that have been set up by governments.
 The government can use trade barriers to increase or decrease (regulate) foreign
trade and to decide what kinds of goods and how much of each should come into
the country.
 Tax on imports is an example of a trade barrier.
Removing barriers or restrictions set by the government on trade is known
as liberalisation. When the government imposes fewer restrictions than before, it is
said to be more liberal.

World Trade Organisation

 World Trade Organisation (WTO) is an organisation whose aim is to liberalise
international trade.
 At present, 164 countries of the world are currently members of the WTO.
 It has established rules for developed countries regarding international trade so
that these countries can allow free trade for all.