ECONOMICS

CH-1 DEVELOPMENT

Q1. Define the following terms:

1. Development - Growth of economy along with the improvement in the non-economic and
social aspects of the country such as quality of life, health, education etc. It is a
comprehensive term that includes increase in per capita income, reduction of poverty,
increase in literacy rate, etc.
2. National Income- The money value of final goods and services produced by a country
during an accounting year.
3. Per capita income: Total income of a country divided by its total population. It is also
called average income.
Q2. Explain common, different and conflicting developmental goals by giving
appropriate examples.
Answer:
Developmental goals may be common, different or conflicting.
(i) Common goals: People’s common goals are regular work, better wages, equal treatment,
freedom, security, friendship, respect of others, etc. These are the things which are aspired by
everyone.

(ii) Different goals: Development does not mean the same thing for every individual. It varies
from person to person. For example, developmental goals of landless rural farmers may be
more days of work and better wages, local school for their children, etc. while an unemployed
youth may aspire for better employment opportunities etc.

(iii) Conflicting goals: Different people could have different as well as conflicting notions of
a country’s development. For example, Industrialists may want more dams to get more
electricity but this may cause large-scale displacement of local communities/ tribals, hence
they may not desire the same in their region.
Q3. Why do different persons have different notions of development. Explain.
It is because the life situations of persons are different.
People seek things that are most important for them or that which can fulfil their aspirations
or desires.
For example: The developmental goals of a boy from a rich urban family would be to get
admission in a reputed college, whereas the developmental goals of a girl from a rich urban
family would be to get as much freedom as her brother.
Q4. ‘What may be development for one may not be development for the other’. Explain
by giving examples.
Answer:
It is true that development for one may not be development for the other. The following
examples can prove the same:
  Construction of dams may be beneficial for industrialists and large farmers, but this
may sub¬merge the agricultural land, and disrupt the lives of the people.
 More wages means development for a worker, but it can go against the employer.
 A consumer wants to purchase different household articles at low prices but a trader or
seller wants to sell these items at a higher price.
Q5. Why do people look at a mix of goals for development? Explain.
1. Though income is one of the most important components of development, but there
are other important goals which people look at for development. Hence, development
is a mixture of material aspects like income and non- material aspects which are
essential for better life.
2. People also seek things like equal treatment, freedom, security and respect.
3. Women need a safe and secure environment to take up a variety of jobs or to run
businesses as entrepreneurs.
4. People seek a pollution free environment.
5. Students seek better education and equal opportunities to learn.
6. These are goals other than income. Hence development goal is not only for better
income but for other important things in life.

Q6. What is the main criterion used by the World Bank in classifying different
countries? What are the limitations of this criterion, if any? (NCERT Q4)
Ans . World Bank uses the per capita income to classify different countries. The per capita
income is calculated by dividing the total income of the country by the population of the
country. For the year 2017, the countries with per capita income of US $ 12,056 per annum
were declared rich countries and the countries with per capita income of US $ 955 or less are
called low-income countries.
The limitations of the criterion are:
a) Other important factors, including literacy rate, infant mortality rate, healthcare, are
ignored while classifying the countries.
b) Information about the unequal distribution of income is not mentioned by The World Bank
c) The economy of the country cannot determine the development of the country.
Q7. Why are the countries of the Middle East not called developed countries inspite of
higher per capita income?
Answer:
The countries of the Middle East are small and there is a wide gap between the rich and the
poor. Since these are oil producing countries, they have higher per capita income. But the
wealth available in these countries is not equally distributed among people. As a result, some
are very rich while others are very poor.
Q8. Why is Per Capita Income calculated in the US dollars?
Answer:
The Per Capita Income is calculated in the US dollars because US dollar is considered as the
medium of international exchange. It is accepted as method of payment across the world.
Q9. Why do we use averages? Are there any limitations to their use? Illustrate with
your own examples related to development.
Answer:
1. Different countries have a different population, so calculating the average helps in getting
an estimated answer which can be used to compare different things at different levels.
2. There are limitations of calculating averages because we cannot know the difference in
the income of the people and the unfair distribution of income in a country or state.
3. For example, if we calculate the per capita income of two countries A and B with 5
people each, the salary of five people in country A is Rs.23,000, Rs.22,000, Rs.23,500,
Rs.28,000 and Rs.25,000 and the income of people living in country B are Rs.1,50,000,
Rs. 22,000, Rs.50,000, Rs.4000, Rs.2500. The average income of country A will be
Rs.24,300, and that of country B will be Rs.45,700.
4. This proves that the average of country B is higher than that of country A, and yet there is
a disparity in the income distribution of country B and the income is evenly distributed in
country A.

Q10. Mention the differences between Developed Countries and Developing Countries.
Q11. How do ration shops under the Public Distribution System help people?
Public Distribution System a system of government-sponsored chain of shops. These ration
shops are entrusted with the work of distributing basic grains to the poor at subsidized prices.
Wheat, rice, kerosene, sugar, etc. are a few major commodities distributed by these shops
under the public distribution system. Hence the ration shops help in maintaining the
nutritional status of people by making food available at lower cost.
Q12. “Money in your pocket cannot buy all the goods and services that you may need to
live well” Is it true or not? Elucidate.
Money cannot buy all the goods and services that we may need to live as:-
1) Money cannot buy us a pollution free environment or ensure us that we get unadulterated
medicines, unless we can afford to shift to a community that already has all these things.
2) money may also not be able to protect us from infectious diseases, unless the whole of our
community takes preventive measures.
3) People also like to have equal treatment in the society, freedom, dignity and honour in
their lives which money cannot buy.
Q13. ‘‘National development of a country depends on the availability of public
facilities.’’ How ?
Ans. Public facilities are the facilities provided by the government either free of cost or at
very low price for the welfare of people. Development of a country depends upon various
facilities which are affordable when provided collectively by the state. Following are some of
the public facilities required for development:
1. Public Distribution System: Public Distribution System of a country distributes food
articles to the people of a country. The better the PDS works, the better fed are the people of
the country and the nutritional level of the people of a country also improves which
ultimately contributes to the development of the country.
2. Education Facilities: Educated people are the base of any kind of development. It is the
established fact that most developed countries are considered as most educated countries and
the countries with high level of education have high rate of development.
3. Health Facilities: A person can contribute towards any development only when he is
healthy. A person’s health is dependent upon the quality of food and the medical facilities
available in the country. So the country’s medical system and food distribution needs to be
very strong and effective so that the benefits of these facilities must reach to the last person.
4. Transportation and Communication: Transportation provides the mobility of resources
from one part of the country to the other parts where they are more required. Communication
helps in the timely flow of information. This mobility of resources and information is very
much required for the balanced development of the country.
5. Security: Development takes place only in a secure environment. So, a country’s internal
and external security is very much required for the development of a country.
Q14. How is BMI calculated?
1. BMI or Body Mass Index is used to measure the level of nourishment among the adults.
2. BMI is easy to calculate. For this purpose the weight of a person is measured in kgs. and
the height in metres.
3. Then the weight is divided by the square of the height.
4. If this figure is less than 18.5 then the person is considered undernourished and if this
BMI is more than 25, then a person is overweight. This criterion is applicable only on
adults and not on growing children.

Q15. Kerala, with lower per capita income has a better human development ranking
than Punjab. Hence, per capita income is not a useful criterion at all and should not be
used to compare states. Do you agree? Discuss.
Answer
1. No, I do not agree with the statement that per capita income is not a useful criterion at all.

2. Kerala, with lower per capita income has a better human development ranking than
Punjab because human development ranking is determined using a combination of factors
such as health, education, and income.
3. Hence, this does not imply that per capita income is not useful.Rather, per capita income
is one of the development factors and cannot be neglected. It is a simple criterion which is
easy to calculate and understand. So it is useful but it is not a comprehensive measure of
human development.
4. The World Bank uses this criterion for measuring development and comparing states. But
this measure has certain limitations such as it is very much influenced by the extreme
upper and lower values and fails to represent the level of equality of income. Secondly, it
does not represent the other indicators of quality of life like level of health and education
which are important objectives for human development.
5. Therefore, determination of Human Development Index (HDI) is done which is a broader
concept and covers other development factors like health, education etc.

Q16. What is Human Development Report? In what respects is the criteria used by the
UNDP for measuring development different from the one used by the World Bank?

Human Development Report published by UNDP compares countries based on the

educational levels of the people, their health status and per capita income.
The criterion used by the UNDP for measuring development is different from the one used by
the World Bank in following ways:
i) UNDP measures development on the parameters of education, health and per capita income
whereas World Bank measures the same only on the basis of per capita income.
ii) UNDP ranks the countries on the basis of development whereas World Bank classifies
them into three categories: rich countries, middle income countries and poor countries.
iii) UNDP has a broader framework to measure development whereas World Bank has a
narrow framework to measure the same.
Q17. Explain the meaning of HDI. Mention three components of measuring HDI.
HDI stands for Human Development Index. It may be defined as the process of widening
people’s choice as well as raising the level of well-being. The concept of HDI goes beyond
income and growth to cover all human choices. It puts the people at the centre stage and
covers all aspects of human development with the object of improving the conditions of
people from all angles. It is a broader approach to development.
Components of Measuring HDI
(i) Life Expectancy: It is the average expected length of life of a person at the time of birth.
(ii) Per Capita Income: Mean income of the people is an economic unit. It is calculated by
dividing the total national income of a country by population. It is calculated in dollars for all
the countries so that it can be compared.
(iii) Gross Enrolment Ratio for Three Levels: It means enrolment ratio for primary schools,
secondary schools and higher education beyond secondary level.
Q18. What do you understand by sustainability of development? What can be done to
make development sustainable?
Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their needs
However, since the second half of the 20th century, a number of scientists have been warning
that the present type, and levels of development are not sustainable. Following are certain
steps which can be taken to achieve sustainable development:
a) Judicious Use of Natural Resources: Natural resources are limited. So they must be utilised
by keeping economic priorities in mind and in such a manner which may provide the
maximum benefits to the people. Non-renewable sources of energy are to be saved for the
future generation.
b) Penalty for Wastage: For this purpose government must frame necessary policies and
implement them so that wastage of at least non-renewable resources may be stopped.
c) Alternative Resources: Technology nowadays has made it possible to generate alternatives
of the natural resources. But such technologies must be made commonly available for their
maximum use and must be used in a way that it doesn’t harm the environment.
Q19. “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 discussion of
development? Discuss.
1. According to the statement, the natural resources of the Earth are overused in the name of
development. Earth provides enough resources to meet the needs of all but today’s
generation has become so greedy that for their own progress and development they resort
to activities like deforestation, unsustainable fuel wood, shifting cultivation,
indiscriminatory use of agro-chemicals, extraction of groundwater in excess of recharge
capacity, etc.
2. Nature has given us sufficient resources to meet all our requirements. But when we start
the overexploitation of resources for more profits, more demand or lavish life style, they
start depleting very fast, no matter whether they are renewable or non-renewable
resources.
3. For example, now most of the people who own cars prefer to travel by car only, even
when a single person has to commute. In this manner, they consuming fuel that was
sufficient to carry five persons together. It is wastage of a resource. Electricity is wasted
in a similar manner.
4. This is results into the fast depletion of the fossil fuels. The depletion is so fast that at its
present rate, the crude oil reserves would last only 50 years more.
5. In the name of development similar wastage is witnessed with other natural resources
which hampers the idea of sustainable development.