ECONOMICS
Chapter 1:DEVELOPMENT
INTRODUCTION
We have aspirations about how we would like to live or what we would like to do.
Development involves thinking about these questions and ways in which these can be
achieved .
Only through a democratic political process these hopes can be achieved.
WHAT DEVELOPMENT PORMISES- DIFFERENT PEOPLE, DIFFERENT GOALS.
People often seek things which are most important to them or which can fulfill their
aspirations.
Therefore,
1. Different persons can have different developmental goals
Eg. A landless rural labouer hope for better wages on the other hand a prosperous
farmer would want to have an assured high income .
2. What maybe development for one may not be development for the other. It may even
be destructive for the other.
Eg. Industrialists would support construction of dams because it will provide them
electricity on the other hand this will disrupt the lives of people who are displaced.
INCOME AND OTHER GOALS:
What do people want?
▪ Regular work
▪ Better wages
▪ Decent price for their crops or other products
In conclusion, they want more income.
Apart from income people also seek,
▪ Equal treatment
▪ Freedom
▪ Security
▪ Respect
Quality of our life depends on these non-materialistic things. These things mean a lot but are
not measured. Therefore, it is wrong to conclude that what can not be measured is not
important. (Ref. Pg no. 6 for examples)
People look at a mix of goals while considering development.
NATIONAL DEVELOPMENT :
National development means thinking about fair and just path for all, and considering if
there’s a better way of doing things
It should be kept in mind that different persons could have different as well as conflicting
notions of a country’s development.
HOW TO COMAPRE DIFFERENT COUNTRIES OR STATES?
We use different criteria for comparing different things. It depends on the purpose of
comparison.
For comparing countries, their income is considered to be one of the most important
attributes.
TOTAL INCOME of the country: The income of all the residents of the country.
o Countries with higher income are more developed than others with less income.
But, comparing total income will not tell us what an average person is earing. Thus, we
compare the average income.
AVERAGE INCOME: It is the total income of the country divided by its total population.
o Average Income is also known as per capita income.
In the World Development Report, which is published by World Bank the countries are
classifies based on their average income.
PER CAPITA INCOME per annum CATEGORY
US $ 49,300 and above High income or rich countries
US $ 6700 (India) Low middle income country
US $ 2500 or less Low income countries
Though average income is useful, it does not tell us how this income is distributed among
people. A country which has equitable distribution of income is preferred.
INCOME AND OTHER CRITERIA:
The per capita net state domestic product at current prices: Measures the economic output
per person in a state.
If we look at the per capita income of the state such as, Haryana, Kerala and Bihar ( Ref
Table1.3). We can say that Haryana has the highest per capita income and Bihar is at the
bottom. So, if per capita income were to be used as the measure of development, the most
developed state would be Haryana.
On the other hand if we consider other criterias such as (ref. Table 1.4)
▪ Infant Mortality rate: the number of children that die before the age of one year as a
proportion of 1000 live children born in that particular year
▪ Literacy rate: proportion of literate population in the 7 and above age group
▪ Net attendance ratio: 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 rankings of the states will be different in different categories apart from income.
PUBLIC FACILITIES:
A pollution free environment can not be bought by money. In the same manner there are
other things which cannot be bought by money. The best way is to provide these goods
and services collectively.
For example, Kerala has a low Infant Mortality rate because it has adequate provision of
basic health and educational facilities.
HUMAN DEVELOPMENT REPORT: (ref table 1.6)
Published by UNDP (United Nations Development Programme) compares the countries
based on the educational levels of the people, their health status and per capita income.
The indicators of Human Development Index:
▪ Gross National Income per capita: The total value of goods and services produced
by a country’s residents and businesses both domestically and internationally in
a given period.
▪ Life expectancy at birth: average expected length of life of a person at the time of
birth.
▪ Mean years of schooling of people aged 25 and above: average number of
completed years of formal education among individuals aged 25 and older in a
given population.
SUSTAINAILITY OF DEVELOPMENT:
It involves balancing economic growth, social well-being, and environmental protection to
ensure long term prosperity and resource availability.
The present type of and levels of development are not sustainable.
In case of groundwater, if we use more than what is being replenished by rain then we would
be overusing this resource.
Sustainability of development is comparatively a new area of knowledge in which scientists,
economists, philosophers and other social scientists are working together.
