Economics Chapter 1 –Development

What Development Promises – Different Peoples, Different Goals:

 Developmental goals vary from person to person.
 It’s not just about personal growth but also about a country’s progress.
 Development includes economic growth and meeting basic needs like education and healthcare.
 The aim is to adapt to the changing times.
 For instance, building a dam for electricity generation may benefit society but harm farmers and local residents.
National Development
National development refers to the overall progress and improvement of a country in various aspects, including economic,
social, and political domains. It encompasses the enhancement of living standards, infrastructure, and institutional capacity,
among other factors. Here are key aspects of national development:
Economic Growth:
National development involves sustained economic growth, which leads to increased production, income generation, and
employment opportunities. It aims to achieve a stable and prosperous economy that benefits all citizens.
Social Welfare:
National development prioritizes the well-being of citizens by ensuring access to essential services such as education,
healthcare, housing, and social security. It aims to reduce poverty, inequality, and social exclusion.
Infrastructure Development: Adequate infrastructure, including transportation, communication, energy, and water supply, is
vital for national development. Improved infrastructure facilitates economic activities, enhances productivity, and improves the
quality of life.
Human Capital Development: National development focuses on investing in human capital through education, skill
development, and healthcare. A well-educated and healthy workforce is essential for sustainable development and economic
competitiveness.
Environmental Sustainability:
Sustainable development emphasizes the responsible use of natural resources and environmental conservation. National
development strategies should incorporate measures to mitigate environmental degradation, promote renewable energy, and
address climate change challenges.
Political Stability and Good Governance:
Political stability, rule of law, and effective governance are essential for national development. Transparent and accountable
institutions, as well as participatory decision-making processes, contribute to fostering trust, stability, and sustainable
development.
International Cooperation:
National development often involves collaboration with international partners, organizations, and donors. International
cooperation can provide financial assistance, technical expertise, and knowledge sharing to support national development
efforts.
Comparing Different Countries or States
 Comparing countries based solely on total income can be misleading due to differences in population.
 Per capita income, which is the average income per person, is a more accurate measure for comparison.
 World Development Reports often use per capita income to classify countries into different categories based on their
level of development.
Income and Other Criteria
 Besides income, access to public facilities like healthcare, education, infrastructure, and sanitation is crucial for
assessing development.
 These public facilities contribute significantly to the overall well-being and quality of life of citizens.

Sustainability of Development
Sustainability of development refers to the ability to meet the needs of the present without compromising the ability of future
generations to meet their own needs. It involves balancing economic, social, and environmental considerations to ensure long-
term well-being and prosperity. Here are key aspects of sustainability in development:
Environmental Conservation:
Sustainable development prioritizes the protection and conservation of natural resources, biodiversity, and ecosystems. It aims
to minimize pollution, reduce carbon emissions, and promote sustainable land use practices to preserve the environment for
future generations.
Economic Stability:
Sustainability requires a stable and resilient economy that can withstand shocks and fluctuations. It involves promoting
inclusive economic growth, reducing income inequality, and ensuring access to livelihood opportunities for all segments of
society.
Social Equity:
Sustainable development aims to address social inequalities and promote social inclusion and justice. It involves ensuring
access to basic services such as education, healthcare, housing, and social protection for all individuals, regardless of their
background or socio-economic status.
Cultural Preservation:
Sustainability includes the preservation and promotion of cultural heritage, traditions, and identities. It recognizes the
importance of cultural diversity and encourages respect for indigenous knowledge and practices.
Community Participation:
Sustainable development emphasizes the importance of participatory decision-making processes and community engagement.
It involves empowering local communities to participate in the planning, implementation, and evaluation of development
projects that affect their lives.
Responsible Consumption and Production:
Sustainability entails promoting responsible consumption and production patterns. It involves reducing waste, recycling
resources, and adopting sustainable practices in industries, agriculture, and consumption habits to minimize environmental
impact.
Climate Action:
Sustainable development addresses climate change challenges by promoting renewable energy sources, energy efficiency, and
climate-resilient infrastructure. It involves adapting to climate change impacts and mitigating greenhouse gas emissions to limit
global warming and its adverse effects.
Global Partnerships:
Sustainability requires international cooperation and partnerships to address global challenges such as climate change, poverty,
and inequality. It involves collaboration among governments, businesses, civil society organizations, and international agencies
to achieve common goals and targets.
Conclusion
Development is a multifaceted concept encompassing economic, social, and environmental dimensions.
Achieving sustainable development requires a holistic approach that balances economic growth with social equity and
environmental stewardship.
1. What is per capita income?
Average income (Per capita income)
Per Capita Income = Total income (In a financial year) ÷ total population.
2. Mention any three limitations of per capita income as an indicator of development.
 A rise in per capita income is due to rise in prices and not due to increase in physical output, it is not a reliable index of
economic development.
 National income rises but its distribution makes the rich richer and the poor poorer.
 It excludes all non-marketed goods and services, even though they may be important for human happiness and better
quality of life.
3. Distinguish between a developing country and a developed country.

Developing country Developed nation

The standard of living is low. The standard of living is high.
The rate of capital formation is low. The rate of capital formation is high.
Per capita income is low. Per capita income is high.
4. Mention any three characteristics of development.
 Different people can have different development goals.
 A mix of goals for development.
 Development for one may not be development for others.
5. Besides income, what are other six things people may look for growth and development?
 Peace, Regular income, Good health, Desirable living standard, Good working conditions, Equal treatment
6. What is sustainable development? Suggest ways in which resources can be used judiciously.
Sustainable development refers to the development without hampering the needs of the future generations so that the future
generations may enjoy the benefits of nature to the fullest.
some ways in which the resources can be used judiciously are as follows:-
 Economic extraction of resources.
 Use of alternative resources.
 Less use of non-renewable resources.
 Limiting waste material at production level.
7. Describe the criterion used by the HDI in classifying different countries.
United Nations Development Programme (UNDP) has used the criterion of Human Development Index to measure the
development of countries. HDI is calculated on the basis of:
 Per capita income : When the total national income of the country is divided by its population, we get the per capita
income.
 Life expectancy: It measures the average age of a person in a country. It helps us to know the health facilities of the
country.
 Literacy rate: Education is also one of the most important criteria for the development of a country.
8. The question of sustainability of development raises many fundamentally new issues about the nature and process of
development’. Explain it with examples.
The question of sustainability of development raises many fundamentally new issues about the nature and process of
development.
For example:

 Sustainable development has continued to evolve as the true agenda of protecting the world's resources while its true
agenda is to control the world's resources.
 Environmentally sustainable economic growth refers to economic development that meets the needs of all without
leaving future generations with fewer natural resources than those we enjoy today.
 The essence of this form of development is a stable relationship between human activities and the natural world, which
does not diminish the prospects for future generations to enjoy a quality of life at least as good as our own.
 Example: Crude oil that we extract from the earth is a non-renewable resource. Still, its explorations are being done
non-judiciously.
9. What is development? Why do different people have different development goals? Explain with four examples.
Development means continuous progress or i increase in real per-capita income. In other words, there is i improvement in
economic welfare of the people and their standard of living.
The four characteristics of development are:
 Developmental goals are different for different people.
 What may be development for one may not be development for the other.
 For development people look at a mix of goals.
  Different persons could have different as well as conflicting notions of country's development.
10. In what respect is the criterion used by the UNDP different from that of the World Bank? What are the limitations of the
criterion used by the World Bank?
The World Bank uses per capita income to measure the development. But it does not give the clear picture about the condition
of the people in the country.
That is why UNDP has adopted Human Development index. The Human Development Index (HDI) is based on:
 Per capita income : When the total national income of the country is divided by its population, we get the per capita
income.
 Life expectancy : It measures the average age of a person in a country. It helps us to know the health facilities of the
country.
 Literacy rate : Education is also one of the most important criteria for the development of a country.
 Gross enrollment ratio : It measures the education gained at three levels—at the primary, secondary and higher
education level.
11. "Different people have different goals of development". Explain the statement.
Different people have different development goals:
1. People have different developmental goals because people come from different background.
2. Different people have different dreams and aspirations.
3. People set their goals according to the changing circumstances and the prevailing situation
4. People may change the goal with the change in situation which could be contradictory to previous goal
5. For example: A person willing to do higher education will change his goal go for employment because weak economic
situation of the family.
12. Define the term per capita income.
 Per capita income measures the average income earned per person in a given area in a specified year. It is calculated by
dividing the area's total income by its total population.
13. Define the term literacy rate.
 Literacy rate is defined as the percentage of the population of a given age group (7 and above) that can read and write.
14. Suggest any three ways to maintain Body Mass Index.
The three ways to maintain Body Mass Index (BMI) are:
1. It is important to exercise at least 60-90 minutes most days of the week.
2. Stay hydrated and eat a balanced diet.
3. Avoid fast food and oily food.
15. Why is the issue of sustainability important for development? Explain.
The issue of sustainability is important foi development because of the passage of time the generation changes and with this
change society wants more and more benefits from the resources which are present in our nature. Because of the increasing
needs of people of our society, things are decaying day by day, anc excessive use is making things worse. If the speed of using
resources remains the same then the available resources will be exhausted soon and our coming generation will stay deprived
of all kind of needs. The issue of sustainability is important for development because of the following reasons:
a) The growth and development should be done by keeping in mind future usage.
b) If resources are not sustained, then our natural resources will stagnate after some time and no upcoming generation
will be able to take advantage of these natural resources.

16. "Sustainability of development is a crucial aspect in present times". Support the statement with examples.
It is felt that the economic growth and industrialisation have led to reckless exploitation of natural resources. Sustainability
promotes a rational use of natural resources.
1. Currently, reckless exploitation of non-renewable natural resources is going on. Since the stock of natural resources like
oil and minerals is limited, development should not take place at the cost of these scare natural resources as they are
not renewable in the near future.
 2. Ground water is an example of renewable resource. But if we use more that what is replinished by nature, then we
would be overusing this resource.
3. Once the non-renewable resources would be exhausted, we would not be able to use them in future. So, using the
resources judiciously will help in maintaining the sustainability of development of our ecosystem.
4. Economic development is a continuous process. Resources are to be used in such a way that they are not exploited. At
the same time, development should not harm the environment.
17. "Consequences of environmental degradation do not respect national or state boundaries". Support the statement with
an example.
Consequences of environment degradation do not respect national or state boundaries. This issue is no longer a regional or
national issue. Our future is linked together. Sustainability of development Is essential for all the mankind and it is our common
responsibility to save the environment. These days, it is a matter of discussion among different countries of world. Global
warming, acid rain etc. are not bound to a country and cannot be controlled by one nation. It is a global matter for thinking and
finding the solutions

18. Why is average income considered as an important criteria for development? Give one reason.
Average income is considered an important criteria for development because it represents the total income of a country
divided by the total population. If the average income is adequate to meet the basic requirements and provide other facilities,
then the country is considered developed.

19. What is average income? What is its importance? Mention its limitations related to development. [2017]
 Average income refers to the total income of a nation (GDP) divided by its population, also known as per capita income.
It is an essential measure for classifying countries as developed, underdeveloped, or developing.
Importance of average income:
 Average income helps in understanding the economic well-being of a nation and its citizens. It assists in identifying
disparities between countries and assessing their overall development.
Limitations of average income as a measure of development:

1. Inflation bias: An increase in per capita income can be misleading if it is due to rising prices rather than an actual
increase in physical output.
2. Income distribution: Despite rising national income, if the distribution is unequal, it may lead to the rich getting richer
and the poor getting poorer.
3. Exclusion of non-marketed goods: Average income fails to consider non-market activities that contribute to human
happiness and quality of life.
4. Labor displacement: Technological advancements that lead to labor displacement and adversely affect the poor may
still result in increased average income.
5. Population growth: If the rate of population growth exceeds the rate of national income growth, per capita availability
of goods and services may decrease, affecting economic welfare.
6. Non-monetary contributions: Some commodities, like salt or needle, may have a higher contribution to economic
welfare than their monetary value included in national income calculations.
20. What is the main criterion used by the World Bank in classifying different countries? Describe its limitations.
The World Bank primarily uses per capita income as the criterion for classifying different countries.
Limitations of using per capita income for classification:
1. Narrow focus: Per capita income only considers the economic aspect of life and disregards social factors such as
education, health, and life expectancy.
2. Inequality: It hides disparities within countries, as a small population in wealthy Middle Eastern countries may skew the
per capita income, while a significant population remains poor.
3. Rich-poor division: Countries are divided into rich and poor based on per capita income, oversimplifying the complex
reality of development.
 4. Lack of holistic assessment: The World Bank's classification focuses solely on income, overlooking other crucial aspects
of development.
5. Arbitrary thresholds: The classification uses specific income thresholds, such as $49,300 per annum for rich countries
and $2,500 or less for low-income or poor countries, which may not capture the full range of economic and social
conditions.
21. 'For development, people look at a mix of goals". Support the statement with three suitable example.
For development, people look at a mix of goals, for example:
 People have different developmental goals because people come from different background.
 Different people have different dreams and aspirations.
 People set their goals according to the changing circumstances and the prevailing situation
 People may change the goal with the change in situation which could be contradictory to the previous goal
 For example: A person willing to do higher education will change his goal to go for employment because of the weak
economic situation of the family.
22. Explain the factors on which the quality of life depends.
The quality of life depends upon the following factors
1. Money and material things
2. Presence of family members, friends, and relatives
3. Good working atmosphere at the office
4. An opportunity to learn and contribute
5. A position of self-respect in the family
6. A safe and secure environment.
23. Explain the three components of the Human Development Index.
The three components of the Human Development Index are:
1. It includes the level of development of a country.
2. It indicates how far a country has traveled and how far it has yet to travel to achieve high ranks in matters such as the
per capita income of the people.
3. It includes important welfare elements such as life expectancy, literacy, educational level of people, and health status.
24. Which three efforts should be made by any country to improve its HDI?
The three efforts which could be made by any country to improve its HDI are:
 Improvement in human capacity through education and healthcare that will result in:
 Providing 100% literacy to the people.
 Improving health facilities.
 Creating a pollution-free environment.
25. What is sustainable development? Why is the issue of sustainability important for development? Explain. [2016,2015]
Sustainable development means development should take place without damaging the environment, and development in the
present should not compromise with the needs of future generations.
The issue of sustainability is important and desirable for development because:
1. Economic development is a continuous process. Hence resources should not be exploited. At the same time,
development should not harm the environment.
2. It is desirable because everyone would certainly like the present level of development to go further or at least be
maintained for future generations.
26. What is national development? What aspects are covered under national development?
National development refers to a nation's ability to improve the standard of living and well-being of its population.
Aspects covered under national development include:
1. Economic awareness: Increasing the economic knowledge and awareness of the population.
2. Agricultural outputs: Enhancing agricultural production and productivity.
3. Poverty eradication: Focusing on strategies and policies to alleviate poverty within the nation.
4. Rural development: Ensuring the development and progress of rural areas.
 5. Urban growth management: Addressing the challenges associated with urbanization and managing the growth of urban
areas.
6. Gender parity: Striving for gender equality and equal opportunities for all genders in society.
7. Conflict resolution: Promoting peaceful discussions and negotiations to resolve conflicts within the nation.
27. Case Based Questions -
Read the following passage on ‘Groundwater in India’ given and then answer the questions that follow:
Groundwater in India: “Recent evidence suggests that the groundwater is under serious threat of overuse in many parts of the
country. About 300 districts have reported a water level decline of over 4 metres during the past 20 years. Nearly one- third of
the country is overusing their groundwater reserves. In another 25 years,60 per cent of the country would be doing the same if
the present way of using this resource continues. Groundwater overuse is particularly found in the agriculturally prosperous
regions of Punjab and Western U.P., hard rock plateau areas of central and south India, some coastal areas and the rapidly
growing urban settlements.
(i) Why is groundwater overused?
(ii) Can there be development without overuse?
Answer:
(i) Groundwater is overused for the purpose of agriculture.
(ii) Yes. There can be development without the overuse of groundwater. Since this natural resource is easily available, we don’t
value it much and use it recklessly for our selfish purposes. We must stop overusing it so that it may be there for our future
generations.