PLANNING

AND ECONOMIC
DEVELOPMENT
(PED)  
16B1NHS532
B.Tech V Semester
August 2022
So, what is Economic Development?
• There are many definitions
• Does depend on who you ask and how it is framed

2
Definition of Economic Development
“ Development can be
seen . . . as a process of
expanding the real
freedoms that people
enjoy ”
“By the problem of economic development I mean simply the problem —Amartya Sen, Nobel
of accounting for the observed pattern, across countries and across time, laureate in economics
in levels and rates of growth of per capita income. This may seem too
narrow a definition, and perhaps it is, but thinking about income
patterns will necessarily involve us in thinking about many other
aspects of societies too, so I would suggest that we withhold judgement
on the scope of this definition until we have a clearer idea of where it
leads us” (Lucas Jr, 1988)

“We are at an auspicious moment in history when successes of past

decades and an increasingly favorable economic outlook combine to
give developing countries a chance—for the first time ever—to end
extreme poverty within a generation.…to create a world for our
children which is defined not by stark inequities but by soaring
opportunities. A sustainable world where all households have access to
clean energy. A world where everyone has enough to eat. A world
where no one dies from preventable diseases. A world free of poverty”
(Jim Yong Kim, 2013)
3
 PED
SUBJECT ABOUT
Some Example
 Indian Economy, 2013

Source: Google Reuse Image, collected from

https://upload.wikimedia.org/wikipedia/commons/2/2e/1951_to_2013_Trend_Chart_of_Sector_Share_of_Total_
GDP_for_each_year%2C_India.png
 FIVE FACTS
ABOUT INDIAN
ECONOMY
Refer- Ghate, 2012’s “The oxford handbook of the Indian economy: Oxford University Press)
Source: https://blog.oup.com/2013/11/five-important-facts-about-the-indian-economy/
 Five facts about Indian economy
Refer- Ghate, C. (2012). The oxford handbook of the indian economy: Oxford University Press, and
https://blog.oup.com/2013/11/five-important-facts-about-the-indian-economy/

1. India’s growth is unbalanced: India’s growth has been unbalanced — both across
states and between urban and rural areas.
2. Service sector is the largest sector at a low level of development :
• With the course of development, “most economies undergo substantial changes with large
shifts in resources across the agricultural, manufacturing, and service sectors” (Ghate,
2012).
• India’s service sector currently is close to 60% of the economy and a major contributor to
tax revenues. However, there has not been a corresponding rise in the share of services in
total employment.
• Agriculture sector in India continues to employ half the population in low productivity
jobs.
3. India’s pro-poor growth strategy presents long-term macroeconomic challenges:
Two Biggest Challenges are Inflation and fiscal deficits
◦ “Rising rural per-capita incomes need to be matched with increases in rural productivity”
(Ghate, 2012)
4. Corruption is associated with lower economic growth and tax revenues-
◦ As cited in Ghate (2012), “only 10% of the public distribution system (PDS) money in
India reach the targeted population with the rest being all leakages”
5. Indian economy has grown greatly since the 1991 reforms: increased fourfold
since 1991, growing at close to an average of 7% (during 2013), not recently.
 PED Course
◦ Course Code- 16B1NHS532
◦ Credits: 3-0-0
◦ Learning Goal:
◦ The course is designed to enable students to understand the process of Economic
Development and Planning in India and across the world. It allows you to identify the patterns
of economic development trajectories, measuring development and development gap,
inequality of income and wealth, Human development; Demographic transition, population,
poverty and environment; Sustainable development; macro Economic Policy and Economic
Development; Federal Development and planning process of India.
◦ Course Outcomes (COs):
1. Understand the issues and approaches to economic development.
2. Evaluate National income accounting, human development index and sustainable
development.
3. Apply an analytical framework to understand the structural characteristics of development.
4. Analyze the role of Macroeconomic stability & policies and Inflation in the development
process.
5. Evaluate the importance of federal development and decentralization.
 PED Course
◦ Learning Outcomes:
◦ Studying PED will enable students to understand:
◦ How to determine economic development and growth, and their indicators.
◦ How to estimate National Income, including the concepts of sustainable development and environmental
considerations.
◦ The demographic features of development including poverty and inequality.
◦ The causes and consequences of Inflation and Business Cycles.
◦ The roles of fiscal and monetary policy in fighting recessions and inflation or to achieve macroeconomic
stability.
◦ The Federal Development
◦ The process of planning and development
◦ Methodology:
◦ The course will commence with making the students understand the basic economic
development indicators and measurable approaches and subsequently learn about macro-
economic stability. The practice sessions (tutorials) focus on the case-to-case core topics and
numerical problems on these topics.
◦ Books
◦ Text Book
◦ Naqvi, S. N. H. (2015). Economics of Development: Toward Inclusive Growth: SAGE Publications.
◦ Ray, D. (2012). Development Economics (19 ed.). New Delhi, India: Oxford University Press.
◦ Thirlwall, A. (2009). Growth & Development: With Special Reference to Developing Economies (8 ed.). New
York: Palgrave Macmilan.
◦ Todaro, M. P. (1989). Economic Development in the Third World (6 ed.): Longman Publishing Group.
◦ Todaro, M. P., & Smith, S. C. (2015). Economic Development (12 ed.). New Delhi: Pearson.
 PLANNING AND ECONOMIC DEVELOPMENT
Modules
Module 1: Economic Development and its Determinants (7+2)
◦ Economic growth and development- Indicators of development-
Rostows Stages of Growth, Approaches to economic development and
its measurement
Module 2: National Income Accounting
◦ National Income Accounting, Green GNP and Sustainable development
Module 3: Indicators of development
◦ PQLI, Human Development Index (HDI) and gender development
indices
Module 4: Demographic Features, Poverty and Inequality (2+1)
◦ Demographic features of Indian population; Rural-urban migration;
Growth of Primary, Secondary and Tertiary Sector
 PLANNING AND ECONOMIC DEVELOPMENT
Modules
Module 5: Inflation and Business Cycles
◦Inflation. Business cycle. Multiplier and Accelerator Interaction
Module 6: Macro Economic Stability & Policies
◦Monetary Policy. Fiscal Policy. Role of Central Bank & Commercial banks in the
development of the country. Balance of payments; currency convertibility and
Issues in export-import policy
Module 7: Federal Development
◦The Federal Set-up - The Financial Issues in a Federal Set-up, Principles for
Efficient Division of Financial Resources between Governments.
◦Financial Federalism under Constitution. Finance Commissions in India, Terms
of References and its Recommendations
Module 8: Planning and Development
◦Need for planning, Decentralisation, Rural and Urban local bodies
Evaluation Criteria
Components Maximum Marks Duration Coverage
20 1 hr Syllabi covered
T1
up-to T-1.
20 1 hr Syllabi covered
T2 between T-1 & T-
2.
End Semester 35 2 hrs Full Syllabi
Examination
25 Entire Semester Project, class tests,
Regularity in
TA
attendance and
discipline.
 Recommended Reading material
◦ Meier, G. M., & Seers, D. (1984). Pioneers in development: The World Bank.
◦ Naqvi, S. N. H. (2015). Economics of Development: Toward Inclusive
Growth: SAGE Publications.
◦ Ray, D. (2012). Development Economics (19 ed.). New Delhi, India: Oxford
University Press.
◦ Thirlwall, A. (2009). Growth & Development: With Special Reference to
Developing Economies (8 ed.). New York: Palgrave Macmilan.
◦ Todaro, M. P. (1989). Economic Development in the Third World (6 ed.):
Longman Publishing Group.
◦ Todaro, M. P., & Smith, S. C. (2015). Economic Development (12 ed.). New
Delhi: Pearson.
◦ UNDP. (1990). Human Development Report 1990: Concept and
Measurement of Human Development.
◦ UNDP. (2019). Human Development Report 2019: Beyond income, beyond
averages, beyond today: Inequalities in human development in the 21st
century.
References of this lecture
◦ Lucas Jr, R. E. (1988). On the mechanics of economic development.
Journal of Monetary Economics, 22(1), 3-42.
◦ Ray, D. (2012). Development Economics (19 ed.). New Delhi, India:
Oxford University Press.
◦ Todaro, M. P., & Smith, S. C. (2015). Economic Development (12 ed.).
New Delhi: Pearson.