G.

D Goenka Public School , Sec-22 , Rohini

Class 10 , Economics
Ch 1- Development

Development- it is a process of bringing a qualitative and quantitative improvement for an

individual, society or a nation.

Development Goals- These are aspirations what a person desires to achieve in life.

• Development goals can be different for different people

• They can be conflicting and non conflicting.
Development Goals- Two types- Monetary and Non monetary Goals

• Monetary- these are the goals that are measurable in terms of money.
• Non Monetary Goals- these are the goals that are not measurable in terms of money like love,
sense of security, equality etc.
INCOME AND OTHER GOALS

• Development is a mix of goals, that is, people in their life look for both monetary and the non
monetary goals.
• Besides, wanting for more money, People also want things like equal treatment, freedom, security
and respect of others for a good quality of life.
• Money cannot buy everything to lead a happy life.
• Also what cannot be measured is important in one’s life.

National Development:

• Since different people have different development goals, therefore their notions for national
development will also be different.
• A nation would develop when the development would benefit a large number of people and when
it is fair and just for all

Comparison between countries or states

To compare the development between the countries, we need certain indicators.

MONETARY INDICATORS
1. Total Income- it is the income earned by all the residents of the country. Higher total income
means more developed a country is as people have more income to buy goods and services.
Limitations-

• It does not take into account the population of a country

• It does not take into account the non monetary indicators on which quality of life depends.
2. Per Capita Income- It is the total income divided by the population of the country. It tells us the
average income per person in a country.
Limitations:

• It does not tell us how is the income distributed.

• It does not take into account the non monetary indicators on which quality of life depends.

NON INCOME/NON MONETARY INDICATORS

1. Infant Mortality rate- it indicates the number of children per thousand that die before the age of
one year.
Higher IMR indicates poor health facilities indicates .Therefore less development.

2. Literacy rate- measures the proportion of literate population in the age group 7 yrs and above.
Higher Literacy rate indicates better education facilities which indicates higher development

3. New Attendance ratio- total number of children of age group 6-10 yrs attending school as a
percentage of total children in the same age group.
Higher NAR means higher development

4. Life Expectancy- the average no. of years a person is expected to live.

Higher Life expectancy indicates better health facilities which indicates higher development.

CRITERIA USED BY WORLD BANK

1) World Bank uses Per Capita Income to compare countries.

2) It classifies the countries into high income, middle income and low income countries on the basis
of Per Capita Income
• High Income Countries- countries with PCI of $12746 per annum and above.
• Middle Income Countries- with PCI between @$12746 and $1045 per annum
• Low Income Countries- with PCI of per annum $1045 and less

Human Development Index

The United Nations used the criteria of Human Development Index to compare countries.

HDI compares the countries based on the educational levels of people, their health status and per
capita income.
The indicators used under HDI

• Life Expectancy- it is a health indicator

• Literacy Rate- it is an education indicator
• Gross enrollment Ratio- it is an education indicator
• Per capita income- it is an income indicator that measures the standard of living

Sustainable Development

It is the development of the present without compromising on the needs of future generations and
without harming the environment

Why is it needed?

It is needed because:

• Resources are limited and should be used judiciously.

• Resources have to be saved for the future generation.
Ways to ensure sustainable development:

• By judiciously using the limited resources

• By using alternate sources of energy like wind energy, solar energy etc.
Ch 1- Development (Economics)

QUESTIONS- ANSWERS

Q. 1 What is Per Capita Income?

Ans. It is the average income of a country. It is obtained by diving national income by the population
of a country

i.e. Per Capita Income = National Income / Population

Q. 2 What is meant by ‘economic development’? Write the two basis of measuring economic
development of a country?

Ans. Economic development is an increase in per Capita income that promotes economic welfare by
reducing poverty, unemployment & inequalities in distribution of Income.

Two basis of measuring economic development are National Income & per Capita Income.

Q. 3 “What may be development for one may not be development for the other but conflicting for
another.” Explain with a suitable example.

Ans. The Development goals for different people depend upon their life situations, their aspirations
and needs. What may be development for one may be destructive for other.

Eg- The establishment of a dam leads to infrastructural development but many people have shifted
out of the village, hence it may not be development for them. (give more examples)

This shows that the development goals of the two are conflicting.

Q. 4 Why is the total income/national income of countries not used to make comparisons between
them?

Ans. The total income of the countries is not used to make comparisons between them because the
population of different countries is different.

Q. 5 Why do you think average income is an important criterion for development? Explain.
Ans. Average income is the income per head. It is obtained by dividing the Total income by the total
population.

• It is an important criterion because it gives what average is a person likely to earn and also some
idea about the rising standard of living.
• This per capita income also takes into account the population of the country.

Q. 6 Besides the size of per capita income, which other property of income is important in comparing
two or more societies?

Ans. Per capita income is an important but not the only criterion for development. Along with
average income, equitable distribution of income in a country should also be considered.

Q. 7 Why is the issue of sustainability important for development?

Ans. Development does not only mean securing a better present, but it also means securing a better
future for the generations to come.
Sustainable development is the development which can be sustained for many years without
overusing our resources. Hence, sustainability is an important aspect of development.
Sustainability is important for development because it results in:

( i ) Judicious use of limited resources

( ii ) conserving the environment which is necessary for development.

Q. 8 What is human development index HDI?

Ans. HDI is a composite index prepared by the United Nations Development Program that compares
the countries on the basis of health, education and standard of living. It uses indicators like Life
expectancy, Literacy rate for 15 + population and Per capita Income.

Q.9 How can development be sustained in an economy? Give an example with reference to use of
resources.

Ans. Development can be sustained in any economy by using renewable resources such as ground
water, wind energy & solar energy.

Q. 10 Why is per capita income of different countries calculated in dollars & not in their own
currencies by the World Bank?

Ans. It is done in order to make comparisons of per capita income of different countries possible.

Q. 11 Kerela, with low per capita has a better human development ranking than Maharashtra. Hence
per capita income is not useful criterion at all & should not be used to compare states. Do you
agree?

Ans. It is true that per capita income is not the only criterion behind human development. Factors
like infant mortality rate, literacy rate & not attendance ratio are also very crucial for overall human
development. In these factors Kerela is better than Maharashtra. Kerala has a lower IMR which
indicates better health facilities in the state. It has a higher Literacy Rate and Gross Enrollment ratio
which indicates better Education Facilities.

However if we are interested only in comparing two or more states in terms of production and
income generated then per capita income is an important criteria. But if we have to look at the
human development then both monetary and non monetary indicators should be taken in
consideration.

Q. 12 In what respects is the criterion used by UNDP for measuring development different from the
one used by the World Bank?

Ans. World Bank

• Uses the criterion of per capita income to classify different countries as high income or low income
countries.
• Countries with per capita income of $12716 per annum & above are rich countries & countries
which have per capita income of $1045 per annum or less are low income countries (according to
WDR 2012).
• But the limitation of this criterion is that it doesn’t tell us anything about the distribution of income
in a country.
World Bank measures only economic development.

UNDP uses a different criterion called human development index (HDI). HDI is a composite index
measured on the basis of three indicators,

a) Longevity :- It is measured in terms of life expectancy

b) Knowledge :- It is measured by Literacy rate of 15+ years.

c) Standard of living :- It is measured by real per capita income in dollars

HDI measures Human development which is a broader term than economic development.

Q. 13 ‘While average income is useful for comparison but it may hide disparities’. Discuss.

Ans. Per capita income is an important criterion for development. It is considered to be one of the
most important attributes for comparing countries but is suffers from the following limitations:

( i ) Per capita income doesn’t tell us anything about the distribution of income. A poor country with
a more equal distribution of income would be better off than a richer country with unequal
distribution of income.

( ii ) Per capita income doesn’t include the non monetary indicators like various facilities & services
that influence quality of life e.g. health facilities, education facilities, equal treatment etc.

(note- also include the mathematical example taken up in the class to show the limitation of PCI)
Q. 14 Distinguish between economic development & human development.

Ans. Human Development

1. It refers to human centered approach towards development. It focuses on people & qualitative
improvement in human life.

2. It is indicated by human development index.

3. It is a term that includes economic development also.

4. It considers human welfare. Should be increased through investments in education & health.

Economic Development

1. It refers to sustained increase in per capita income that promotes economic welfare by reducing
poverty, unemployment & inequalities in distribution of income.

2. It can be indicated by national income & per capita income.

3. It is narrower term as compared to human development.

4. It considers people can be made better off by increasing their command over goods and services.

Q. 15 How does industrial pollution degrade the environment? Explain three measures to control
environmental degradation.

Ans. Industrial pollution degrades the environment in the following ways :

( i ) Air is polluted by the gases.

( ii ) Dust, fume, mist, spray and smoke contain particles.

( iii ) Industrial effluents polluterivers.

( iv ) Paper pulp, textiles, chemicals etc. industries pollute land & soil due to toxic materials.

Steps to control environmental degradation are :

( i ) Careful planning & setting of industries.

( ii ) Better equipment

( iii ) Proper fuel selection & utilization.

( iv ) Treatment of industrial liquids.

Q. 16 Identify the different thrust areas of human development. Which one of them plays the most
significant role in the development?

Ans. Human development is a human centered approach towards development. It focuses on

people. It is concerned with them and their well being, their needs, choices & aspirations.

Human development is a wider term which not only includes economic development but also
includes development of one’s knowledge & educational capabilities as well as one’s health
conditions so that one may lead a healthy and long life.

Human development aims at building of different human capabilities so that one may make use of
natural resource, have sustainable development have better personal & social security & to ensure a
decent standard of living.

Q.17 “Do the two terms –economic growth and economic development mean the same thing”.
Discuss.

Ans. No, they are different. Economic growth can be defined as a process whereby a country’s
national income increases over a period of time. On the other hand economic development is a
process of increase in income as well as achieving a more equitable income distribution and poverty
alleviation.

Thus economic development is a wider concept than economic growth.

Q18 Explain two main reasons for the need of environment friendly economic growth and also
explain two suggestions to achieve them.

Ans. Reasons for need of environment friendly economic growth are:

(i) Present production technology has polluted atmosphere and water bodies with garbage, smoke
and poisnous gases.

(ii) Rapid economic growth and industrialisation have led to depletionof natural resources.

Suggestions to achieve it:

(i) Increased use of renewable and clean sources of energy, less use of fossil fuels, organic farming.

(ii) Measures to reduce global warming and global limits on carbon emissions etc.

Q19 Why do different persons have different notions of development? Which of the following
explanations is more important and why?
(a) Because people are different.
(b) Because life situations of persons are different.
Answer: The second explanation is more important about different notions of development for
different people. A person’s development needs depend on the situation around him. This can be
illustrated with a simple example which is as follows. If a person is living in a remote village which is
not accessible by road, then construction of an all weather road would be the developmental need
for that person. On the other hand, if a person is living in a metro city and finds it difficult to
commute to his workplace, construction of rapid transit system would be the developmental need
for that person.
Q 20 - Do the following two statements mean the same? Justify your answer.
(a) People have different developmental goals.
(b) People have conflicting developmental goals.
Answer: Both the statements are true but their meanings are different. Two people may have
different developmental goals buy they need not always be conflicting. For example; construction of
a flyover to reduce waiting time at a railway crossing can be the developmental goal for an office
worker. But if the construction of the flyover leads to demolition of slums, it can be contradictory for
the slum dwellers.
Q21 - Give some examples where factors other than income are important aspects of our lives.
Answer: Good income is important for a comfortable life, but it is not the only important factor. A
good income would be useless if a person does not have access to quality health services. If good
schools are not available in the neighbourhood, it can be difficult to provide proper education to the
children. These are some examples which show factors; other than income; which affect our life.
(include example from NCERT)
Q22- Development goals of people may be conflicting. Explain
Answer: Different persons can have different developmental goals. What may be development for
one may not be development for the other. It may even be destructive for the other. For example; a
dam may be developmental goal for an industrialist, but the same dam can create havoc with the life
of people who need to be evacuated in the catchment area.
Q23. Development goals of different people may be different. Explain
Different people have different developmental needs. These needs are based on their particular life
situations. For example; for a person in a remote village, access to an all weather road can be the
developmental goal. On the other hand, for a person living in Delhi or Mumbai; construction of a
rapid mass transit system or a flyover to reduce traffic may be the developmental goal.

Q24 - Give three examples where an average is used for comparing situations.
Answer: Height of students in a class with a large number of students, income of people of a state,
marks of students in a class are some examples where averages are used for comparing situations.
Q25 - Suppose records show that the average income in a country has been increasing over a period
of time. From this, can we conclude that all sections of the economy have become better? Illustrate
your answer with an example.
Answer:
• Increase in average income cannot be a guarantee of overall progress of the economy.
• When the Average income increases it is difficult to tell whether it is increasing due to increase in
the income of a rich or poor.
• If the average income is increasing because of rise in income of poor then that means that the gap
between rich and poor is reducing and hence the country or state is developing.
• But is the average income is rising due to rise in the income of rich only then it doesn’t indicate
development for a country.
Q26 - 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?
Answer: Firewood is used by a majority of people in rural India. LPG is the main kitchen fuel in urban
India. Because of large scale deforestation, availability of firewood would become a big concern fifty
years from now. So, we need to find some alternate fuel; like gobar gas for rural India. Solar power is
another source which can reduce our dependency on fossil fuels and can give us security against
shortage of fuel in the future.
Q27 -“The Earth has enough resources to meet the needs of all but not enough to satisfy the greed
of even one person”. How is this statement relevant to the disscusion of development? Discuss.
Answer: This famous quote is from Mahatma Gandhi. We know that the earth has plenty of
resources which would outlast our lifetime. But we also need to think about the future beyond our
lifetime and we need to think about the future generations. If we go on exploiting our natural
resources indiscriminately, then nothing would be left for the future generation. Hence, we should
control our greed and take as little from the nature as is really necessary for our needs.
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