Economics Development CHAPTER AT A GLANCE Aspects of Development (oseaascae ye oeemay Diferent people may have diferent developmental goals Development for one may not be the development for other Developmental Goals ¥ ¥ v v y t r , aa Equal ‘ample Income aes Satisfaction Freedom ——_—Secuty = Respect Classifying Countries (Per Capita Income Criteria of World Bank in 2017) * 7 = Y ich Counties Low income counties Low middle income counties Y ' cf us: US. -¢ India comes in this category $ 12056 PA or above $955 PA or less © US $ 1820 PA Human Development Index: | ‘ ¥ v y v v v Uteracy ‘Infant Mortality Access to clean Body Mass Life Health Rate Fate inking water Sandard He Index Expectancy facies Ss a ANCERT EXERCISES 1. Development of a country can generally be determined by (@ its per capita income, its average literacy level. (Gil) the health status of its people. (iv) all of the above Ans. (iv) 2. Which of the following neighbouring countries has better performancein terms of human development than India’ () Bangladesh Gi)_-Sri Lanka (ii) Nepal (i) Pakistan Ans. Gi) 3 Assume there are four families in a country. The average per capita income of these families is S000. If the income of three families is € 4000, 7000 and 3000 respectively, what is the income of the fourth family? @ &7,500 3,000 (i) 2,000 Ge) © 6,000 Ans. (iv) 4. What is the main criterion used by the World Bank in classifying different countries? What are the limitations of this eriterion, if any? ‘Ans. Per capita income or average income (measured in dollars isthe main criterion used by the World Bank to classify different countries as developed or high-income countries and underdeveloped or low-income countries. “The per capita income or average income is calculated by dividing the total income of a country by its, population. According to the World Development Report, countries with per capita income of US$ 12056 per annum or more are termed rich or developed or hhigh-income countries. On the other hand, countries with per capita income of USS 955 or less are classified 1s poor or underdeveloped or low-income countries. er capita income, as an indicator of development, as used by the World Bank, suffers from many limitations, which are as follows. G, National income is estimated in the domestic ‘currency ofeach country Tis estimates converted into dollar at the current rate of exchange, Such 4 conversion does not tell us anything about the ‘purchasing power of each currency, is affected by the size of (b) Per capita income has a ame try, If cOUNEEY BAS Tange population of 8c ere will elo, population, its Pet ational income. Similar having large natio" h, dap E Mi water population wil kay a higher pe capi a iF dos oy have a large nation rot tel us anything (9 Pec ecm te i mem ot erent when it comes to the distributog ‘ne county might ave ei reome while the other mi terween the ‘people belonging tothe higher sray vor the society and the lower strata ofthe sociey er eapita income does not tell US anything ‘about the availability of various services ang faeilities that influence the quality of life. Ev countries with high per capita income aren able to provide its people the quality of life they deserve. They lack good health facili, education, sanitation, ete ‘5, Inwhat respects is the criterion used by the UNDP for measuring development different from the ove used by the World Bank? ‘Ans. The criterion used by the UNDP for measuring development is different from the criterion used by ‘the World Bank in the following ways. (a) The UNDP compares the development of te ‘countries on the basis of literacy rate, 0s ‘enrolment ratio and health status of their peop ‘Onthe other hand, the World Bank compart development of the countries on the basis of capita income or average income. On the basis of the comparison done by the UND? the countries are ranked as first, second, his! 80 on, whereas on the basis of the compu done by the World Bank the countries are dv into three categories (Rich or developed or high-income eo (ii) Middle-income or developing count did) Poor or underdeveloped oF ov countries, os (©) The UNDP has a broader concept of", and the World Bank has narrow coo development, of income. @ (b)«6. Why do we use averages? Are there any imitations to their use? Illustrate with your own examples related to development. ans, We use averages for comparisons across different classes. Limitations of Using Averages: The main limitation “of using averages is that it calculates only the mean availability and hides the disparities in the process. “The following examples can best illustrate the above- ‘mentioned fact. Consider two countries A and B, each having five citizens. “4500 |5000} 4000 500001000] 11500 We observe that country A has fewer disparities in ‘terms of income, On the other hand, country B shows great disparities in income among its citizens. The Average income of country A is 4000 which means that every citizen ears more or less & 4000. In country A, the income is distributed equitably. ‘On the other hand, country B shows that every citizen earns more of less & 11500, which is not true. There are four people in country B who eam £2000, 3000, Z 1500 and ® 1000 respectively. Only cone citizen earns % 50,000. Country B shows that majority of its population is poor and few are rich. So, average criteria does not produce a clear picture of the development status of a country. +, Kerala, with lower per capita income, has a better ypuman development ranking than Haryana Hence per capita income is not a useful eriterion at al end should not be used to compare states. Do you agree? Discuss. ‘Ans. Kerala has better HDR because it has more investment in human resource than Haryana. Hence, per capita income should not be used to compare states. tis true that pe capita income isnt the only criterion behind thumgn development. Factors like infant mortality rate, iteracy rate and net attendance ratio are also Very ‘crucial for overall human development. Kerala is potter than Haryana because it has adequate provision of basic health and education facilities. However, if wwe are interested only in comparing two oF more Sates in terms of production and income generated, then per capita income isan important eriterion. 8. Find out the present sources of energy that are used by the people in India. What could be the other possibilities fifty years from now? Ans. The present sources of energy used by the people in India are the following. (a) Conventional Sources of Energy: These sources of energy have been in use for quite sometime, for example, coal, petroleum, natural gas and electricity, (6) Nomconventional Sources of Energy: These are wind, solar energy, tidal energy, atomic energy > and biogas [No doubt, coal and mineral oil are the important sources of energy but during the last three decades they have shown signs of exhaustion. If we continuously tice these sources of energy, itis believed that their ‘ook will not last for more than forty years. In such 4 situation, the future of energy sources seems to be quite bleak and gloomy. 9, Why is the issue of sustainability Important for development? ‘Ans. Sustainability is an important factor for the development of a country. Sustainable development means attending today's needs without compromising the needs of the future We all know that every generation wants to get the maximum benefit from the resources, which are available to them. But this ean be dangerous because the available resourees can be exhausted within a short peviod of time and the future generations will remain deprived of these resources. Thus, sustainability isthe capability to use resources judiciously and maintain the ecological balance. It is essent of future generations. “The issue of sustainability isimportant due to following, reasons. I for the survival (a) ‘It ensures that the trend of the economy is dynamic and development must be in relation with the future. (8) It takes care of the overall development of the economy such as health services and better education. (©) If the available resources are misused then the development will stagnate after a period of time, “This is because in the future, those resources will not be available, po mmaventable carefully We con 10. “The Earth has enough resources to meet the needs Ans, After observing the given tb “ of all but not enough to satisfy the greed of even the following. ‘one person.” How is this statement relevant to the discussion of development? Discuss, Ans. }i Tesout supply required to satisfy these wants are cath has provided us enough resources, But ‘nowadays, human beings have become so pred that for their progress and development they realy succumb to ‘}) the activities such as de{orestation, extraction of excess luman wants and aspirations are unlimited, but the ited in underground water, etc} these available resources are ‘lised irationally, they will end up soon, ge( degraded ‘or become less productive and itn human beings keep a check on their uncontrolled manners, ‘our earth has enough resources to meet their needs, but jonal income in USD 1 of Gross Nationa OG jy ‘at the top : Sri Lanka (11,326) Grey at the bottom : Nepal (2,471) In terms of Life Expectancy at birth Country at the top : Sei Lanka (75.5) Country at the bottom : Pakistan (66,6) In terms of Mean Years of Schooling of Peopy aged 25 and above Country at the top : Sri Lanka (10,9) Country at the bottom : Myanmar and Nepy 9) wo © ‘certainly not enough to satisfy their greed. 11. Lista few examples of environmental degradation that you may have observed around you. Ans. The following are a few examples of environmental (@ In terms of HDI Rank in the world (2018) Country at the top : Sri Lanka (76) Country at the bottom : Pakistan (150) 13. The following table shows the proportion of adaly aoe (aged 15-49 years) whose BMI is below norm (@)_ deforestation 6) (BMI<18 Kg/m) in Ind depleting levels of groundwater is based on asune of various states for the year 2015-16. Look at the (2) wer plon table and answer the fellowing questions. {e) burning of fossil fuels ‘State Male (%) | Female (%) | (A) ozone depletion . 85 0 Keral ea soliton Karnataka 7 2 o foe pollen Madhya Pradesh 28 8 : a_i 12, For each ofthe items given in Table 1.6 find out which an 2 country is at the top and which is at the bottom, @ Compare the nutritional level of people is ‘Table 1.6: Some Data Regarding India and its Kerala and Madhya Pradesh, Neighbours for 2017 Ans. In Kerala, 8.5 per cent males and 10 per cat ‘Country Gross Life Mean | HDI females are undernourished whereas, in Madhyt ‘National |Expectancy| Years of | Rank Pradesh 28 per cent males and 28 per cent femals Income at birth | Schooling | in the are undernourished. | Grp per | ao17) | oFPeple | word (Can you guess why around one-fifth of pvp emma: setts in the country are undernourished even tov nea ene it is argued that there is enough food ia Srilanka | 11326 BS 09 | 76 Ang, Dun? Deseribe in your own words. a | ‘ns. Around one-fifth of people in the county a eel eee eee |e ‘undernourished even though it ig argued that = yanmar | 5567 Gd oo. | is enough food in the country(It is beets * skieton | SAPD of 6645.) 84.) 180 large numberof population in ur county 6? | Nepal 24h | 706 | 49 | 149 and living below the poverty line) = Bangladesh) 3,677 2s 58 | 136 at of the population cannot afford to buy fo! At Subsidised rates or from ration shops Source: Human Development Report, 2018; UNDP, New York