ECONOMICS

LESSON - 1

DEVELOPMENT
 Meaning of Development
Development is a positive growth or change in
economical, social and political aspects of a country.

There are two aspects of development.

1. Economic development or rise in income of the
people.
2. Social development which includes education, health
and public
services.
The main characteristics of development.
1. Different people can have different developmental
goals.
2. What may be development for one may not be
development for
 Do all of the persons have the same notion of
development or progress ?
No. Because each one of them seeks different things which are
most important for them that can fulfill their aspirations or
desires.
In fact, at times, two persons or group of persons may
seek things which are conflicting.
1. Yes, because People have conflicting developmental goals.
For example:
To get more electricity, industrialists may want more dams.
2. But construction of dams may submerge the land and disrupt
the lives of
people who are displaced like tribals.
3. They might resent this and may prefer small check dams to
irrigate their
land. So, two things are quite clear,
a) different persons can have different developmental goals.
Different people have different
developmental goals because people have
diverse wishes, likes and dislikes and
aspirations.
What do people desire to get more
income ?
1. People desire regular work.
2. Better wages.
3. Decent price for their crops or other
products
that they produce.
Besides income, what are the other things people may
look for growth and development.
People also seek things like 1. Equal treatment. 2. Freedom. 3.
Security.
4. Respect of others.
5. All these are important goals than more income or more
consumption because material goods are not all that you
need to live.
6. Material things that one can buy with money, is one factor on
which our
life depends. But the quality of our life also depends on non-
material
things mentioned above.
7. There are many things that are not easily measured but they
mean a lot to
our lives which are often ignored. So, it will be wrong to
THE CONDITIONS OR ASPECTS THAT WE WOULD
CONSIDER BEFORE ACCEPTING A JOB
Before accepting a job we would consider many factors, apart
from income.

1. Facilities for our family.

2. Working atmosphere or opportunity to learn.

3. In another case, a Job may give us less pay but may offer

regular

employment that enhances our sense of security.

4. Another job may offer high pay but no job security and also

leave no time

for our family that reduce our sense of security and freedom.
 FOR DEVELOPMENT, PEOPLE LOOK AT A MIX OF GOALS.
1. It is true that if women are engaged in paid work, their
dignity in the
household and society increases.
2. However, it is also the case that if there is respect for women
there would
be more sharing of housework and a greater acceptance of
women
working outside.
3. A safe and secure environment may allow more women to
take up a
variety of jobs.
4. Hence, the developmental goals that people have are not
only about better
income but also other important things in life.

National Development
It is very important to keep in mind that different
persons could have different as well as conflicting
notions of a country’s development.
1. People have different developmental goals which are
conflicting to others.
2. People seek what is most important for them and fulfill their
aspirations
and desires. For example: the establishment of a dam leads
to
infrastructural development, generation of electricity, etc.,
but at the same
time, it may lead to the large-scale displacement of people
living near the
proposed dam site.
3. Hence, construction of dam may be development for some,
but it may be
For comparing countries, their income is considered
to be one of the most important attributes.

1. Because countries with higher income are more

developed than

others with less income.

2. This is based on the understanding that more income

means more

of all things which human beings need.

3. Whatever people like, and should have, they will be to

get with

greater income.
 What is the income of a country ?

The income of a country is the income of all the

residents of that country.
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
person is likely to earn. Hence we can use the
average income for comparing the countries.
The average income – It is the total income of the
country divided by its total population. It is also
known as Per Capita Income.
The main criterion used by the World Bank in
classifying different countries.
1. Per Capita Income or Average Income is used by the
World Bank
to classify different countries.
2. Countries with per capita income of US$ 49300 per
annum and
above in 2019, are called rich countries.
3. Those countries with per capita income of US$ 2500 or
less are
called low-income countries.
4. India comes in the category of low middle income
countries
because its per capita income in 2019 was just US$
 Limitations of using Averages.
Averages calculate only the mean availability and hide disparities in the
process.
Consider two countries A and B, each having five citizens.

Comparison of two countries.

We observe that county A has few disparities in terms of income. On the

other hand, country B shows great disparities in income among its
citizens. The average income of country A is Rs. 10000 which means that
every citizen earns more or less Rs. 10000.
In country A, the income is distributed equally. On the other hand,
country B shows that every citizen earns more or less Rs. 10000 which is
not true. There are 4 people in country B who earn Rs. 500. only one
citizen earns Rs. 48000. country B shows that majority of its population is
poor and few are rich. So, average criteria does not produce a clear
‘’While average income is useful for comparison but

it may hide disparities’.

Per capita income or average income is considered to be one of
the most important attributes for comparing countries but it may
hide disparities.
1. It does not tell us about the distribution of income. A poor
country
with a more equal distribution of income would be better than a
richer country with an unequal distribution of income.
2. It does not measure various facilities and services that
influence
equality of life such as health facilities, education facilities and
equal
treatment.
3. It is affected by the size of population. Even with a large
national
 DISTINCTION BETWEEN A DEVELOPING COUNTRY
AND A DEVELOPED COUNTRY
Developing country Developed country

1. In a developing country, per 1. In a developed country,

capita per
income is low and there is capita income is high.
widespread poverty.
2. The standard of living 2. The standard of living
conditions is conditions is high.
low. 3. The level of efficiency and
3. The level of efficiency and productivity is high.
productivity is low. 4. The rate of capital
4. The rate of capital formation formation is
is low. high.
Infant Mortality Rate (IMR) indicates the number of

children that die before the age one year as a proportion

of 1000 live children born in that particular year.

Literacy Rate measures the proportion of literate

population in the 7 and above age group.

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.
KERALA WITH LOWER PER CAPITA INCOME, HAS A
BETTER HUMAN DEVELOPMENT RANKING THAN
HARYANA. HENCE, PER CAPITA INCOME IS NOT A
USEFUL CRITERIA AT ALL AND SHOULD NOT BE
USED TO COMPARE STATES.

1. Kerala has better HRD because it has more

investment in
human resource than Haryana.
2. It is true that per capita income is not the only
criteria
behind human development.
3. Factors like infant mortality rate, literacy rate

and net

attendance ratio are also very crucial for overall

human

development.

4. Kerala is better than Haryana because it has

adequate

provisions for basic health and educational

facilities.

5. However, if we are interested only in comparing

‘Money in your pocket cannot buy all the
goods and services that you need to live
well’.
1. Income by itself is not a completely adequate
indicator of
material goods and services that citizens are
able to use.
2. Example: normally, your money cannot buy you
a
pollution-free environment or ensure that you
get
unadulterated medicines, unless you can afford
Public Facilities – The facilities that are arranged by
a group of people or by the government and enjoyed by
a large group of people collectively. For example:
hospitals, schools, roads, railways, communication
services, etc.
Importance of public facilities
1. Public facilities are essential for the social and
economic
development of individuals. Without public facilities,
people
cannot achieve their full potential.
2. To maintain law and order, cleanliness, quality of life,
access and
comfort to common man.
IN WHAT RESPECTS IS THE CRITERION USED BY THE
UNDP FOR MEASURING DEVELOPMENT DIFFERENT FROM
THE ONE USED BY THE WORLD BANK.
World Bank UNDP (United Nations
Development Programme)

1. Compares only on the basis 1. Compares basically based on

of income, health and
income. educational
status.
2. Classifies the countries of 2. Do not categories the
the countries but
world under three gives rank to every country.
categories. 3. Publish Human Development
3. Publish World Development Report.
Report. 4. It is multi-dimensional as it
4. Consider only the economic considers different aspects of
perspective while sustainable development.
comparing. 5. Applicable only to the
Body Mass Index (BMI) – It is an index that express the
nutritional status of a person. It is calculated by dividing weight
of a person in kg by the square of height in metres. If the result
is more than 25 then the person will be considered as over
weight and below 18.5, it indicates under weight. {Weight ÷
Height in square = ?. 57 ÷ 1.65 x 1.65 [2.72] = 20.95}.

Human Development Index (HDI) – It is a tool developed by the

United Nations to measure a country’s overall (life expectancy,
literacy rate and health status, etc.) achievement in its social
and economic dimensions.

Life Expectancy – The average expected length of life of a

person at the time of birth (The average number of years a
person is expected to live).
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
Sustainable development – It refers to the
development without damaging the needs of the future
generations. It is a concept of durable development
carried out by limiting the needs of the present so that
the future generations may enjoy the benefits of nature
to the fullest.

The ways in which the resources can be used

judiciously.
1. Stress on developing techniques for the economical
extraction of
resources.
2. Use of alternative sources of resources.
3. Effective steps to recycle used resources.
The importance of sustainable development with
reference to groundwater.
1. Groundwater is a natural resource which is
replenished by nature
as in the case of crops and plants.
2. However, even these resources may be overused.
3. For example: in case of groundwater, we use more
than what is
being replenished by rain then we would be overusing
this
resources.
4. So, efforts should be made not to overuse of water.
5. Recent evidences show that groundwater is under
serious threat
Consequences of environmental degradation do not

respect national or state boundaries; this issue is no

longer region or nation specific. Our future 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 as a member of society and as

individuals we need to ask where we want to go, what

we wish to become and what our goals are. So the

DISTINCTION BETWEEN RENEWABLE AND NON-
RENEWABLE RESOURCES.
Renewable Resources Non-renewable Resources

1. Those resources which can be 1. Those resources which are used

used only

again and again. for a limited time.

2. They can be replenished by 2. They occur over a very long

physical, ecological

chemical and mechanical time and take millions of years in

process. their

formation.

3. Example: groundwater, solar 3. Example: crude oil, and coal.

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