Understanding Economic Development: Chapter Notes
1. Introduction to Development
Development refers to the progress or improvement in the living conditions and quality of life of
individuals and communities.
Development involves thinking about essential needs, better lives for all, equality, and ways to achieve
these goals.
It's a complex concept influenced by history, politics, and democratic processes.
2. Development: Different People, Different Goals
2.1 Varied Notions of Development
Different people have different aspirations and goals regarding development.
Examples:
Landless rural laborers: More work days, better wages, quality education, no discrimination
Prosperous farmers: Higher support prices, cheap labor, settling children abroad
Rural women: Equal freedom as brothers, education opportunities
Urban unemployed youth: Secure jobs, decent income
Rich urban families: Different goals for boys and girls
2.2 Key Insights about Development
Different persons can have different developmental goals.
What may be development for one may not be for another, and might even be destructive.
Development goals can be conflicting between different groups.
Example: Industrialists wanting dams for electricity vs. tribals losing land
3. Income and Other Development Goals
3.1 Beyond Income
People desire regular work, better wages, and fair prices for their products (income).
Non-material aspects are equally important:
Equal treatment
Freedom
Security
Respect from others
Non-discrimination
3.2 Development as a Mix of Goals
Material wealth is one factor, but quality of life depends on many non-material aspects.
For women, paid work increases dignity, but respect for women also requires sharing of housework.
A safe environment enables women to take up various jobs.
Development is about better income AND other important aspects of life.
4. National Development
Individuals have different notions of development, so national development goals also vary.
Important questions for national development:
Is a development idea fair and just for all?
Would it benefit many people or only a few?
Are there better ways of doing things?
Conflicts about development goals and paths are common.
5. Comparing Development Across Countries/States
5.1 Income as a Criterion
Income is considered one of the most important attributes for comparing countries.
Higher income means more access to things humans need.
Per capita income (average income) = Total income of country ÷ Total population
World Bank classification (as of 2023):
High-income/rich countries: Per capita income ≥ US$ 63,400 per annum
Low-income countries: Per capita income ≤ US$ 2,400 per annum
India: Low middle income country (US$ 10,030 per annum)
5.2 Limitations of Average Income
Averages hide disparities in income distribution.
Example: Country A (equitable distribution) vs. Country B (one rich person, rest poor)
Equal average income doesn't mean equal development if distribution is highly unequal.
Income can't buy all goods and services needed for well-being (e.g., pollution-free environment,
protection from diseases).
6. Public Facilities and Their Importance
6.1 Beyond Income Measures
Comparison of states (Kerala, Haryana, Bihar):
Haryana has highest per capita income but higher infant mortality than Kerala
Kerala has better literacy rates and school attendance despite lower income
Bihar lags in both income and human development indicators
6.2 Collective Provision of Services
For many important things, collective provision is the best and cheapest way.
Examples: Security, education, healthcare
Public Distribution System (PDS) functions well in some states, improving health and nutrition.
Individual money cannot ensure these services unless they're collectively provided.
7. Human Development
7.1 Human Development Index (HDI)
Published by UNDP (United Nations Development Programme)
Compares countries based on:
Educational levels
Health status
Per capita income
India's HDI rank (2021-22): 134 out of 193 countries
Comparison with neighbors:
Sri Lanka ranks much higher (78) despite being smaller
Nepal and Bangladesh have better life expectancy despite lower per capita income
7.2 Significance of Human Development
By prefixing "Human" to Development, focus shifts to citizens' well-being
People, their health, and their well-being become most important
Goes beyond purely economic measures
8. Sustainability of Development
8.1 Concept of Sustainability
Scientists warn that present types and levels of development may not be sustainable
"We have not inherited the world from our forefathers — we have borrowed it from our children"
Sustainability raises fundamental new issues about development processes
8.2 Resource Concerns
Renewable resources: Replenished by nature (e.g., groundwater, crops)
Can be overused if extraction exceeds replenishment
Example: Groundwater depletion in 300 districts in India
Non-renewable resources: Fixed stock that gets exhausted (e.g., crude oil)
World's oil reserves estimated to last about 47 years at current extraction rates
Different countries face different situations based on their reserves
8.3 Environmental Challenges
Environmental degradation doesn't respect national boundaries
Our future is linked together globally
Scientists, economists, philosophers working together on sustainability
9. Key Terminology
Per Capita Income: Total income of country/state divided by total population
Literacy Rate: Proportion of literate population in the 7-and-above age group
Infant Mortality Rate (IMR): Number of children dying before age one per 1,000 live births
Net Attendance Ratio: Percentage of children in an age group attending school
Life Expectancy: Average expected length of life at birth
Human Development Index (HDI): Composite index using health, education, and income measures
Body Mass Index (BMI): Weight (kg) divided by square of height (m); indicates nutritional status
10. Conclusion
Development is a continuous debate and process
We must constantly question where we want to go and what our goals are
True development must be sustainable and inclusive to benefit all sections of society