ECONOMICS, CHAPTER-1

DEVELOPMENT
Q1. What is development mention any four features of development?
Ans: Development is a comprehensive term which include increase in real per capita
income, improvement in living standard of people, reduction in poverty, illiteracy, crime rate,
etc.
Features of development:
i. Different people have different development goals.
ii. What may be development for one may not be development for the other, It may
be destructive for the other.
iii. Income is the most important component of development, but along with income,
people also seek equal treatment, good health, peace, literacy, etc.
iv. For development, people look at mixed goals.
Q2. What may be development for one may not be development for the other explain
by giving examples.
Ans: It is true that development for one may not be development for the other.
(i) More wages means development for a worker, but it can go against the entrepreneur.
(ii) A rich farmer or trader wants to sell food grains at a higher price but a poor worker wants
to purchase it for low prices.
(iii) Construction of a dam means more and cheap power, but people, who will lose their
habitat will demonstrate.
(iv) To get more electricity, the industrialists may want more dams. But this may submerge
the agricultural land, and disrupt the lives of the people.
Q3. What is the significance of Human Development Index?
Ans: (i) HDI is used to measure level of development of a country.
(ii) It has been published by UNDP and according to it countries has been ranked.
(iii) It is a comprehensive approach which cover all the major aspects of life.
(iv) Apart from income, education, health status, life expectancy, etc., are considered for
measuring economic development of a nation.
Q4. ‘Money cannot buy all the goods and services that one needs to live well.’
Explain.
Ans: (i) Money or material things that one can buy with it is one factor on which our life
depends. But the quality of our life also depends upon non-material things like equal
treatment, freedom, security, respect of others, etc.
(ii) Money cannot buy us a pollution free environment, unadulterated medicines, peace, etc.
(iii) There are many facilities like schools, colleges, parks, hospitals which an individual
cannot afford. All these are to be provided by the government/society.
(iv) Money possessed by an individual even cannot provide us a type of government which
take decisions for the welfare of the common people.
Q5. What are the limitations of the per capital income criteria of development?
Ans: (i) Per capital income is the average income of a country.
(ii) Per capital income criteria takes into account only the economic aspect of life and ignores
the social, aspect of life.
(iii) Per capita income criteria ignores education, health, life expectancy, sanitation etc.
(iv) Per capita income criteria also ignores non material things like peace, pollution free
environment, democracy, etc.
(v) Though Punjab has higher per capital income as compared to Kerala but it has been
ranked lower on Human Development Index because it is far behind than Kerala in literacy
rate and has higher infant mortality rate than Kerala.
Q6. Define the following terms: -
(i) IMR (ii) Literacy Rate (iii) NAR
Ans: (i) 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.
(ii) Literacy Rate measures the proportion of literate population in the 7 years and above age
group.
(iii) Net Attendance Ratio is the total number of children of age group 6-10 years attending
school as a percentage of the total number of children in the same age group.
Q7. Distinguish between developed and underdeveloped countries.
Ans: Developed countries
(i) These countries have high per capital income.
(ii) The standard of living of the people is high.
(iii) For example, USA, UK, japan, etc.
Underdeveloped countries
(i) These countries have low per capital income.
(ii) The standard of living of the people is low.
(iii) For example, Nepal, Pakistan, etc.
Q8. What is the main criterion used by the World Bank in classifying different
countries? Write the limitations of this criterion.
Ans: The main criterion used by the World Bank in classifying different countries is per
capita income.
Per capita income :- When total income of a country is divided by the total population, then
per capita income is arrived at. Those countries whose per capita income as per 2019 data
is US$ 49,300 per annum and above are called rich countries and those whose income is
US$ 2500 or less are called poor countries. India comes in the category of low middle-
income countries with US$ 6700 per annum.
Limitations:-
i. It covers only the economic aspect ignoring peace, health, environment,
education, longevity, etc.
 ii. This method does not provide us the appropriate distribution of income.
Q9. In what respects is the criterion used by the UNDP for measuring development
different from the one used by the World Bank?
Ans: The criterion used by the UNDP for measuring development is different from the one
used by the World Bank in following ways:
i) UNDP measures development on the parameters of education, health and per capita
income whereas World Bank measures the same only on the basis of per capita income.
ii) UNDP ranks the countries on the basis of development whereas World Bank classifies
them into three categories: rich countries, middle income countries and poor countries.
iii) UNDP has a broader framework to measure development whereas World Bank has a
narrow framework to measure the same.
Q10. Why do we use averages? Are there any limitations to their use? illustrate with
your examples related to development?
Q11. Kerala, with lower per capita income has a better human development ranking
than Haryana. Hence, per capita income is not a useful criterion at all and should not
be used to compare states. Do you agree? Discuss.
Ans: No, I do not agree with the statement that per capita income is not a useful criterion at
all. Though per capita income is not the only criterion and it has limitations, we cannot say
that it is not useful at all. because human development ranking is determined using a
combination of factors such as health status, education level, and income. However, per
capita income is one of the factors used to calculate development and cannot be neglected.
Q11. Find out the present sources of energy that are used by the people in India.
What could be the other possibilities fifty years from now?
Ans: The present sources of energy used by people in India include firewood, coal,
petroleum, crude oil and natural gas. The other possibilities fifty years from now could be
using solar energy, wind energy, nuclear energy, geothermal energy, hydrogen energy, tidal
energy, wave energy, hydroelectric energy, biomass energy, etc., as source of energy for
varied purposes. This is because the current usage of sources of energy may result in loss
of these resources for future generations.
Q12. Why is the issue of sustainability important for development?
Ans: SUSTAINABLE economic development means that development should take place
without damaging the environment and exploitation of resources and development in the
present should not compromise with the needs of future generation.
1. It is important for the future generation requirement: We must use non-
renewable sources judiciously. They also need extra care as they can not be
renewed. Dependency on non-renewable sources should be reduced.
 2. Proper utilization and reducing wastage of resource: It takes care of future needs
and may sustain the environment.
3. There is acute shortage or deficiency of some resources: Investing in alternative
sources of energy may prove helpful.
Q13. ’The earth has enough resources to meet the needs of all but not enough to
satisfy the greed of even one person’. How is this statement relevant to the
discussion of development? Explain.
Ans: This statement is given by Mahatma Gandhi:
(i) It means that the earth has abundant resources to satisfy everyone’s needs but, in our
greed, and hurry to develop, we have been recklessly exploiting these resources.
(ii) In the name of development, we have indulged in activities such as deforestation,
overgrazing, encroachment into forest lands, overuse of ground water, use of plastics, etc.
(iii) The exploitation of natural resources not only harms the environment but may cripple the
future generations of the development process itself.
(iv) If fossil fuels are exhausted, the development of all countries would be at risk.
(v) Thus, there is a need for conservation and judicious use of resources for development.