DEVELOPMENT
THE MILLENNIUM SCHOOL
Class-X SST Notes(Economics)
DEVELOPMENT – DIFFERENT PEOPLE, DIFFERENT GOALS
⇒ Different persons have different notions because each of them seeks different things. They seek
things that are most important for them, i.e., which can fulfill their aspirations or desires.
Different people have different goals because they are different and they are leading their life in
different situation but their general goal is progress.
⇒ There are two things
(a) Different persons can have different development goals.
(b) What may be development for one may not be development for other. It may even be
distraction for other.
Traditional Notion of Development
⇒ With the independence of the third world countries there arose a need for economic development.
Till 1960s, the term economic development was generally used as a synonym of economic
growth. But now it is no longer considered identical with economic growth.
⇒ Definitely notion about the meaning of term development is changing but it is also a hard fact that
there is no unanimity among economists with regard to the meaning on definition of economic
development.
⇒ However all agree that economic development is more than the economic growth. Hence it is
taken to mean growth plus progressive changes in certain variables of material welfare.
Changes in the Traditional Notion of Development
⇒ The increase in income is not sufficient for a nation. Income can be a major base of economic
growth of a nation. But experiences had shown that economic growth could not automatically
translated into the improvement of levels of living of the poor masses. Therefore, economists
redefined the concept of economic development in terms of the reduction of poverty,
unemployment and inequality in the context of a growing economy.
⇒ Now – a – days redistribution and growth have become the popular slogan in most of the
progressive nations, including India. The concept of economic growth is related to the increase in
output of goods and services in an economy. This can be expressed in two ways :
(a) Increase in total output or increase in gross domestic product (GDP).
DEVELOPMENT
(b) And rise in per capita income or rise n per capita GDP.
⇒ Economic development is a broader concept than economic growth.
Development concerns not only man’s material needs but also the
improvement of social conditions of life. It is, therefore, not only economic growth but growth
plus change in social, cultural and institutional pattern. It includes both growth aspect and
distribution aspect. Development must, therefore, be conceived of as a multidimensional concept.
INCOME AND OTHER GOALS
⇒ Besides seeking more income, one way or the other, people also seek things like equal treatment,
freedom, security, and respect of others. They resent discrimination. All these are important
goals. In fact, in some cases, these may be more important than more income or more
consumption because material goods are not all that you need to live.
⇒ 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 on non-material things mentioned above. There are many
things that are not easily measured but they mean a lot to our lives. These are often ignored.
However, it will be wrong to conclude that what cannot be measured is not important.
⇒ For development, people look at a mix of goals.
⇒ The developmental goals that people have are not only about better income but also about 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.
⇒ We also have to think whether there is a better way of doing things. Would the idea benefit a large
number of people or only a small group? National development means thinking about these questions.
HOW TO COMPARE DIFFERENT COUNTRIES OR STATES?
⇒ For comparing countries, their income is considered to be one of the most important attributes.
Countries with higher income are more developed than others with less income.
⇒ To find the income of a country we have to find out the National Income of that country and it’s
per capita income.
National Income
⇒ National Income is defined as the total value of all the goods and services produced within a
country plus income from abroad.
Per Capita Income
⇒ When the total national income is divided by the total population it gives us the Per Capita
Income.
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⇒ In World Development Report 2006, brought out by the World Bank,
this criterion is used in classifying countries. Countries with per capita
income of Rs 4,53,000 per annum and above in 2004, are called rich
countries and those with per capita income of Rs 37,000 or less are
called low-income countries. India comes in the category of low-income countries because its per
capita income in 2004 was just Rs 28,000 per annum.
INCOME AND OTHER CRITERIA
⇒ When we looked at individual aspirations and goals, we found that people not only think of better
income but also have goals such as security, respect for others, equal treatment, freedom etc. in
mind. Similarly, when we think of a nation or a region, we may, besides average income, think of
other equally important attributes.
PER CAPITA INCOME OF SELECT STATES
State Per Capita Income for 2002 – 03 (in Rs)
Punjab 26000
Kerala 22800
Bihar 5700
⇒ According to the given table. Punjab has the highest per capita income and Bihar is at the
bottom. This means that, on an average, a person in Punjab earned Rs 26,000 in one year
whereas, on an average, a person in Bihar would earn only around Rs 5,700. So, if per capita
income were to be used as the measure of development, Punjab will be considered the most
developed and Bihar the least developed state of the three.
⇒ But when we look at the other table where we study the whole thing from another points given in
the table we find that Kerala is ahead : Though Punjab is ahead of Kerala in the income field,
Punjab lags far behind in the crucial areas of literacy rate and net attendance ratio and
moreover infant mortality rate in higher in Punjab than in Kerala, which means more children
out of 1000 die in Punjab than in Kerala.
⇒ So, Kerala scores over Punjab in human development ranking.
PUBLIC FACILITIES
⇒ Income by itself is not a completely adequate indicator of material goods and services that
citizens are able to use. Money in your pocket cannot buy all the goods and services that you
may need to live well. This is why that the average person in Punjab has more income than the
average person in Kerala but lags behind in these crucial areas?
⇒ Money cannot buy you a pollution-free environment or ensure that you get unadulterated
Medicines. Money may also not be able to protect you from infectious diseases, unless the whole
of your community takes preventive steps. Actually, for many of the important things in life the
best way, also the cheapest way, is to provide these goods and services collectively.
⇒ Just think – will it be cheaper to have collective security for the whole locality or for each house
to have its own security man? Even now, in many areas, children, particularly girls, are not
able to achieve secondary level schooling because government/society has not provided
adequate facilities.
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⇒ Kerala has a low Infant Mortality Rate because it has adequate
provision of basic health and educational facilities. Similarly, in some
states, the Public Distribution System (PDS) functions well. If some PDS
shop, i.e. ration shop, does not function properly in such places, the people there are able to get
the problem rectified.
HUMAN DEVELOPMENT REPORT
⇒ Today human development is the core of United Nations Development Programme (UNDP),
which presents it into a new perspective of political and economic freedom and deepening of
democracy at global level, which is economically productive and socially and environmentally
sound. The United Nations development Programme (UNDP), in its first Human Development
Report, 1990 introduce the concept of Human Development Index (HDI). The HDI is the
cumulative measurement of the (a) Longevity, (b) Knowledge, and (c) Decent standard
of living.
⇒ Longevity is a choice to live a long and healthy life. It is measured in terms of life expectancy
(years). Knowledge is a choice to acquire literacy / information. It is measured by educational
attainment percentage, which is a combined gross enrolment ratio in primary, secondary and
tertiary levels.
⇒ Decent Standard of living is a choice to enjoy a quality and standard life. It is measured by
national income or income per capita in Purchasing Power Parity in US dollar (PPP, US $).
⇒ The rank of a country is determined by the overall achievements in these three basic dimensions
of human development. HDI ranks countries in relation to each other to tell them how far a
country has traveled, and how far it has yet to travel the path of development. In this way, HDI is
indicative to the levels of human development and not the complete measurement of
development.
⇒ On the basis of HDI, 177 countries of the world have been classified into high, medium and low
human development categories. India is placed into the group of medium human development
countries with 126th rank.
▪ Life Expectancy in years = 64 years
▪ Combined gross enrolment ratio = 60
▪ GDP per capita US $ = 3139
HUMAN DEVELOPMENT AND ECONOMIC DEVELOPMENT
⇒ Economic development is a broader concept. It is economic growth plus something more than
economic growth. The basic ideas in economic development are rise in productivity, decline in
unemployment, poverty and inequality from high levels. Economic development alone cannot
promote human development. Human development is the process of both quantitative change and
qualitative growth.
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⇒ The concept of human development was taken into a broader sense. It
touches social, economic, political and cultural aspects of human life
with special emphasis on reduction in poverty and minimizing gap
between rich and poor. There should not be unemployment problem in
the economy. The concept of human development touches all aspects of human life.
SUSTAINABILITY OF DEVELOPMENT
⇒ Sustainability is a matter of sharing development opportunity not the poverty and human
deprivation. If the present is miserable and unacceptable to the majority of the world’s people it
must be changed before it is sustained. In other words, what must be sustained are worthwhile life
opportunities, not human deprivation. Lordship resulting from not having enough of the things
necessary for life.
⇒ Sustainable development is the real economic development accompanied by an increase in
economic welfare which can be potentially shared by future generations also.
Features of Sustainable Development
▪ Productivity is increased.
▪ Increase in output in real terms.
▪ Standard of living of people is improved and there is addition to their welfare.
▪ Objectives of removal of poverty, inequality and illiteracy are achieved and more employment
opportunities are generated.
▪ It emphasizes that costs of development particularly costs of environmental loss should be
taken care of.
▪ Standard of life improves.
▪ Stock of natural capital, i.e., stock of renewable and non – renewable resources is maintained
or increased along with preservation of human capital and physical capital.
Need for Sustainable Development
▪ Rapid economic growth and industrialization have led to reckless exploitation of natural
resources.
▪ The stock of natural resources like fossil fuels, which meet most of the energy needs of the
world are limited, the growth of all countries in the future is, therefore, likely to be
endangered if the limited resources are completely exhausted.
▪ Although fossil fuels and minerals are essential for economic development, their use damages
the environment and ecology. They cause pollution and disturb the balance in nature. The
global concern today is, therefore, to adopt a strategy of economic growth that is
environment – friendly.
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Steps that can be taken for Sustainable Development
▪ Some of the important measures being considered for this purpose
are increased use of renewable and clean sources of energy, less use
of fossil fuels, organic farming, measures to reduce global warming and global limits on
carbon emission, etc.
“Earth has enough resources to meet the needs of all but not enough to
satisfy the greed of even one person.”
⇒ Sustainability is the capacity to use the resources judiciously and maintain their balance. Every
generation wants to get the greatest benefits from the available resources but such a thing would
be quite disastrous because the available resources shall be exhausted at a rapid speed and within
a short time most of the resources shall be exhausted and we and especially our coming
generations will be deprived of such resources.
⇒ So we should use our resources most judiciously so that a certain part of them is left for our
coming generations to use it in future. We should protect our animal wealth, both animals and
birds from human exploitation otherwise some species will be lost forever.
⇒ There is no harm in using the land for cultivation but we should see that its fertility is maintained
otherwise sooner or later it will turn into a wasteland.
⇒ Most of the mineral wealth and iron, copper, gold, silver etc. is exhaustible and as such must be
used very carefully. However, we must devise methods of recycling these resources and reusing
them again.
⇒ No doubt, we should utilize our resources for our benefit but we should sustain them and
maintain them for our future as well as for the welfare of our coming generations.
⇒ That is why, it has been said, “Earth has enough resources to meet the demands of all but not
enough to satisfy the greed of even one person.”