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Economics Notes

Chapter 1 Development

*Development* Development is a comprehensive term which include

increase in real per capita income, improvement in living standard of people,
reduction in poverty, illiteracy, etc.
→ The idea of development or progress has always been with us. We have
aspirations or desires about what we would like to do or how we would like to
live
→ We have ideas about what a country should be like Country should have
good income,
country should,people should live together with dignity,more technologies
should be adopted etc.
.The way we live today is influenced by the past. We can't desire for change
without being aware of this. In the same way it is only through a democratic
political process that these hopes of our country can be achieved in real life.

*What Development Promises - Different People, Different Goals*

→ Development promises a real growth by enhancing total income and
standard of a person.
→ People seek things which are important for them. i.e, that which can fulfill
their aspirations or desires.
→ Sometimes two persons or group of persons may seek things which are
conflicting. Example- A girl expects as much freedom as her brother, and that
he also shares in the household work.. Her brother may not like this .
..To get more electricity, industrialists may want more dams, but this may
submerge the land and disrupt the lives of people who are displaced- such as
tribals.
→ So the two things are quite clear:
1.Different persons can have different develop- ment goals.
2. What may be development for one may not be development for the other. It
may even be destructive for the other.

*Income and Other Goals*

What people desire are regular work, better wages and decent price for their
crops ar other products that they produce. They want more income
. 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.
→ Money or material things is one factor on which our life depends. But, the
quality of our life also depends on non-material things.
→ Example: If you get a job in a far off place, before accepting it you would try
to consider many factors, apart from income, like . facilities for your family-
working atmosphere , opportunity to learn ,sense of security , Basic facilities
and working hours.
..Some companies provide less salary but may offer regular employment that
enhances your sense of security.
...Another company, provide you high salary but no job security and also leave
no time for your family. They will reduce of security and freedom. so, you will
prefer less salary one .
...Similarly, for development, people look at a mix of goals. It is true that if
women are engaged in paid work, their dignity in the. household and society
increases.
→ Hence, the development 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 .
-→ National Development refers to ability of a nation to improve standard of
living of its citizens.
→ Standards of living of citizens depend upon per capita income, gross
Domestic Product, literacy rate and availability of health, etc. These factors
also consider as measure of improvement....
National development means thinking about fair and just path for all,
whether there is a better way of doing things.
*How to Compare different countries or state?*
Usually we take one or more important characteristics of persons and compare
based on these characteristics .
→ For comparing countries, their income is considered to be one of the most
important is attributes. This is based on the understanding that more income
means more of all things that human beings need
→ Countries with higher income are developed than others with less income..
:The income of the country is the income of all the residents of the country.
This gives us the total income of the country.
→ For comparison between countries, total income is not such useful measure
since, countries. have different populations.
→ Hence, we compare the average income which is the total income of
country divided by it's total population. The average Income is also called Per
Capita Income.
→ In World Development Report brought out by the World Bank, this criterion
is used to classify the countries. Countries with per capita of US$ 12₤616 per
annum are called rich countries and those with per capita income of US$ 1035
are called low-income countries.
→India in 2012, comes in the category of low middle income countries because
it's per capita income was just US $1530 per annum.
*Average Income*
- While "averages"are useful for comparison, they also hide disparities."
→ It is possible that two countries can have identical average income but in
one country people are neither very rich nor extremely poor. On the other
hand, most Citizens of another countries are poor and one person is extremely
rich!
> Hence, while average income is useful for comparison it does not tell us how
this income. is distributed among people.

**Income And Other Criteria **

- When we think of a nation or a region,we may, besides average income,
think of other equally important attributes like their health status, Infant
Mortality Rate, Literacy rate ,etc.
> On comparing Maharashtra and Kerala we find that Maharashtra has high
per capita income than Kerala which is 1,07, 670 and of Kerala is 88, 527
-But if we look at infant mortality rate, then in Kerala, out of 1000 children
born, 12 died before completing one year of age but in Maharashtra the
proportion of children dying within one year of birth is 25, which is more than
double.
→ Also Maharashtra has 82% literacy rate, but Kerala has 94% literacy rate.
Therefore, we can't just say that Maharashtra. is more developed because of
more income, we also have to consider other criterias.
*Infant Mortality Rate (ar IMR)* indicates the number of children that die
before age of one year as a proportion of 1000 live children born in that
particular year.
*Literacy Rate*
Literacy Rate measures the proportion of literate population in the 7 and
above age group.
*Net Attendance Ratio* is the total number of children of age group 14 and 15
years attending school as a percentage of a total no of children in the same
age group.
*Public Facilities*
→ Facilities which are provided by the government considered as Public
Facilities like schools hospitals, transport, electricity, etc.
→ Money in your pocket cannot buy all the goods and services that you may
need to live well.
--For example, money cannot buy you a pollution- free environment or ensure
that you get unadulterated medicines, unless you can afford to shift to a
community that already has all these things. 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 is to provide
these goods and services, collectively.
*Kerala has a low Infant Mortality Rate* because it has adequate provision of
basic health and educational facilities.
→ In some states, Public Distribution System. (PDS) functions well. Health and
Nutritional status of people of such states is certainly likely to be better.

*Body Mass Index*

This is one way to find out if adults are undernourished is to calculate when
nutrition scientist call Body Mass Index.
BMI = {Weight (in kg)}\
(Height²) (in metres)
If it is less than 18.5 then person is undernourished and if more than 25 then
person is overweight
**Human Development Report *****republished by UNDP (United Nations
Development programme) compares countries based on the educational levels
of people, their health status and, per capita income. (Human Development
Index).

*Life Expectancy**. It is the average expected length of life of a person at

the time of birth.
→ Per Capita Income is calculated in dollars for all countries so that it can be
comparable.

** *GrossNational Income (GNI) Per Capita** It is a measurement of

country's income. It includes all the income earned by a country's residents.

*Gross Domestic Product (GDP)* It is sum of all goods and services

produced within a country in an accounting year.
*Gross National Product (GNP)* It is the sum of all goods and services
with value of import and export in an accounting year.
*Economic Development* Economic Development means that the rate of
production must be faster than the rate of increase in population...
*Human Development:/* Human Development aims at building of different
human capabilities so that one may make use of the natural resource have
sustainable development..have better personal and social security, a decent.
standard of living.
Development of an individual in such a way that he can able to earn and fulfill
his desires

*Sustainability of Development*
→ Sustainable Development: It means that development should take place
without damaging, the environment, and development in the present should
not compromise with the needs of future generations.

*Importance of sustainable Development*

→It is the key to the stable growth of economy, it will not only lead to the
development of present economy but will also help in future.
→As we have limited quality of resources, the development will be hampered
if resources are totally exhausted.
→Overall, without sustainability, everyone will suffer in future. It can create
ecological disbalance. It can lead to depletion in the level of resources.
So, it's high time to think about sustainable development otherwise, we should
be ready to face the consequences.
*Measures for Sustainable Development "
→Control overuses and create awareness.
. Less use resources of fossil fuels and non-renewable resources
→Increase alternative measures over depleting
resources.
--Adopting measures to reduce global warming.
→ Equal distribution of wealth, in such a way that Poverty is alleviated.
*Groundwater in India* -- Groundwater is under serious threat of overuse in
many parts of the country.
→ Groundwater overuse is particularly found in the agricultural purposes,
regions of Punjab and Western U.P, hard rock plateau areas of central and
south India, some coastal areas and rapidly growing urban settlements
→ Groundwater is an example of renewable resources. These resources are
replenished by nature as in the case of plants and crops.
... However, in the case of groundwater, if we use more than what is being
replenished by rain then we would be overusing this resource and we have to
face problem is coming years.
Crude Oil Reserves****
--Crude Oil, Petroleum, etc are non-renewable resources. Once they get
exhausted it, can- not be replenished.
→ The reserves would last only 53 years more .This is for the world as a whole.
→ Countries like India depend on importing oil from abroad because they do
not have enough stocks of its own. If prices of oil increases this becomes a
burden for everyone .
---there are countries like USA which have low reserves and hence want to
secure oil through military or economic power.
.. but future is linked together so we should help each other and developed
together...
→ There are countries like USA which have.
low reserves and hence want to secure oil through military or economic
power.
But future is linked together so we should help each other and develop
together...