ECONOMICS CHAPTER 1: DEVELOPMENT

Introduction
Development means progress and improvement in the quality of life of people.
Different people have different ideas about development depending on their needs
and goals.
What Development Promises – Different People, Different Goals
Different people have different developmental goals.
Examples:
• A landless labourer wants more wages and regular work.
• A farmer wants better prices for crops.
• A student wants quality education.
• A girl may want freedom and equal opportunities.
Important Point:
Development for one person may not be development for another.
Conflicting Goals:
Sometimes one person’s development may harm another person.
Example:
Building a dam may provide electricity and irrigation but can displace nearby villagers.
Income and Other Goals
People seek:
• Better income
• Respect
• Equality
• Freedom
• Security
• Good working conditions
Income is important because it helps people buy necessities and comforts.
However, money alone cannot ensure happiness and development.
Therefore:
Development includes both:
 1. Material things (income, property)
2. Non-material things (peace, dignity, equality)
National Development
National development means improvement in the living conditions of all people in the
country.
A developed country should provide:
• Better healthcare
• Education
• Employment
• Equality
• Security
• Clean environment
How to Compare Different Countries or States?
Per Capita Income (Average Income)
It is calculated by dividing the total income of the country by the total population.
Per Capita Income=Total Income of Country÷Total Population
Countries with higher per capita income are considered more developed.
Why is Per Capita Income Used?
• Different countries have different populations.
• Average income helps compare living standards.
Limitations of Per Capita Income
Average income does not tell us:
• How income is distributed
• Whether rich and poor benefit equally
Example: Two countries may have the same average income, but one may have huge
inequality. Therefore, income alone is not enough to measure development.

Other Criteria for Development

Development is also measured using:
Indicator Meaning

Literacy Rate Percentage of educated people

Infant Mortality Rate Death of infants below one year

Life Expectancy Average life span of people

Health Facilities Availability of medical services

These indicators help judge the quality of life.

Public Facilities
Public facilities are services provided by the government for public welfare.
Examples:
• Schools
• Hospitals
• Electricity
• Water supply
• Roads
• Public transport
Importance:
• Improve living standards
• Benefit poor people
• Ensure equal opportunities
Human Development Report (HDR)
Prepared by:
United Nations Development Programme (UNDP)
It compares countries based on:
• Health
• Education
• Income
This is called the:
Human Development Index (HDI)
Countries with high HDI are considered more developed. India stands at 130th position
out of 193 countries.
Sustainable Development
Development should take place without harming the environment or future
generations. This is called Sustainable Development
Need for Sustainable Development:
Natural resources are limited: (Ex. Of groundwater)
• Water
• Forests
• Minerals
• Fossil fuels
Overuse can lead to:
• Pollution
• Environmental damage
• Resource depletion
Measures:
• Save water and electricity
• Use renewable resources
• Plant more trees
• Recycle waste

QUESTIONS AND ANSWERS:

Q1. What is development? Why do different people have different Developmental
goals?
Development means improvement in the quality of life of people. It includes better
income, education, health, equality, freedom, and security. Different people have
different needs, occupations, lifestyles, and living conditions. Therefore, their goals
and expectations from development are different.
Q2. What are conflicting developmental goals?

Conflicting developmental goals occur when one person's development creates

problems for another person. Example: A factory may create jobs but can also cause
pollution for nearby residents.
Q.3 Why is average income not a useful indicator of development?
There are the following limitations to the use of averages :
• Averages do not tell us about similarities or differences between two countries
or persons or things.
• By averages only one aspect income, size etc. in case of country, marks or
participation in sports activities etc. in case of student, can be compared. All
aspects or achievements are not compared.
• As only one aspect is compared, it does not give true picture of different
countries, persons or things. A country may be ahead than the other country in
one field but may lag behind in the other field. So averages do not give the
correct picture.
Q.4 What is national development? What are the aspects covered under the national
development?
National development is a comprehensive term which includes improvement in living
standard. of the people, increase in per capita income, providing social amenities like
education, medical care, social services, etc. to the citizens of the country.
(i) Under national development, a country uses its resources in a fair and just way.
(ii) Under this only those programmes and policies are implemented which would
benefit a large number of people.
(iii) Under national development, countries focus more on social infrastructure which
includes education, health and other social services.
Q.5 In what respects is the criterion used by the UNDP for measuring development
different from the one used by the World Bank?
1. The criterion used by World Bank: The average income, i.e. per capita income is the
main criterion used by the World Bank in classifying different countries.

2. The UNDP compares countries based on HDI e., on the educational levels of the
people, their health status and per capital income or average income.
3. Human Development Index used by UNDP is better because it is a wider indicator in
which besides per capital income, health and education are also included.
Q.6 What is sustainable development? Why is the issue of sustainability is important
for development?
Sustainable development means that development should meet the needs of the
present without compromising the ability of future generations to meet their needs.
The issue of sustainable development has emerged from rapid industrialization of
the world in the past century. It is felt that economic growth and industrialization have
led to the reckless exploitation of natural resources. On the other hand, the stock of
natural resources are limited. So, the growth of all countries in the future is likely to be
endangered if the limited resources are completely exhausted.
Q.7 “The Earth has enough resources to meet the need of all but not enough to satisfy
the greed of even one person.” How is this statement relevant to the discussion of
development? Discuss.
This statement is relevant to the discussion of development since both resources and
development go hand in hand. As the statement claims, our earth has enough
resources – renewable and non-renewable to satisfy everyone’s need if we use them
in an economic manner. For the sustainability of development, the consumption and
maintenance of resources is also crucial. We have to use the resources keeping our
environment protected and clear so that there is a balance between the development
and use of our resources. As otherwise after a certain point of time in future the
development will be stagnated.
Q.8 ‘Money cannot buy all the goods and services that one needs to live well.’
Explain.
(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 can not provide us a type of government
which take decisions for the welfare of the common people.
Q.9 What is the significance of Human Development Index?
(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.
Q.10 Define the following terms:
(i) IMR (ii) Literacy Rate (iii) NAR