Economic
chapter - 1
Development
1. What is Development?
Development means progress or improvement in various aspects of life. It is not just about economic growth but also includes improvements in living standards, education, health, and equality.
Different people have different goals for development.
- A rich businessman may want more profit.
- A farmer may want better prices for crops.
- A laborer may want more wages and job security.
Income and Other Goals
Development is not just about earning money. While income is an important factor, people also look for other goals that improve their quality of life.
1. Importance of Income
- Income is essential for fulfilling basic needs like food, clothing, shelter, and education.
- Higher income means better access to healthcare, education, and a comfortable lifestyle.
- Countries and individuals often compare development based on per capita income.
- However, income alone does not determine development because:
- A country may be rich, but people might not have access to good healthcare and education.
- Income inequality can exist—some people may earn a lot while others remain poor.
2. Other Important Goals of Development :- People also value non-monetary aspects of life, such as:
(a) Job Security
- A stable job with regular income is preferred over a high-paying but uncertain job.
- Example: A government job may pay less than a business but offers pension and security.
(b) Working Conditions
- People want safe and respectful working environments.
- Example: Factory workers may earn well but prefer better safety standards.
(c) Equality & Freedom
- Development should bring social and economic equality.
- Freedom of speech, protection from discrimination, and human rights are important.
(d) Education & Health
- A literate and healthy population leads to true progress.
- Example: A well-educated person has better job opportunities and a higher standard of living.
(e) Environmental Sustainability
- A country may develop industries and increase income, but pollution and resource depletion may harm future generations.
2. Indicators of Development
To measure development, we consider several factors:
(a) Income as a Measure of Development
- Per Capita Income: The total income of a country divided by its population. average income = total income/total population
- The World Bank classifies countries based on per capita income:
- High-income countries (Developed)
- Middle-income countries (Developing)
- Low-income countries (Underdeveloped)
- Economic growth alone is not enough. Other factors include:
- Health and Longevity (Life expectancy, infant mortality rate)
- Education (Literacy rate, enrollment in schools)
- Environmental Sustainability (Pollution levels, resource conservation)
3. Human Development Index (HDI)
- The United Nations Development Programme (UNDP) uses HDI to rank countries based on:
- Income (GDP per capita)
- Education (Literacy & school enrollment rate)
- Health (Life expectancy at birth)
4. Sustainable Development
- Development should not harm the environment or deplete resources for future generations.
- Sustainable practices include using renewable energy, reducing pollution, and conserving water and forests.
- Infant Mortality Rate :- Number of children die before the age of one year out of 1000 live children.
- Literacy Rate :- Age group of 7 year and above how many person literate in total population.
- Net Attendance Ratio :- Total number of children between 6 -10 year of age groups attending school out of total number of children.
- BMI (Body Mass Index) is a measure used to determine whether a person has a healthy body weight based on their height and weight. It helps categorize individuals as underweight, normal weight, overweight, or obese. BMI = WEIGHT (KG) / HEIGHT (M).
- HDR (Human Development Report) is an annual report published by the United Nations Development Programme (UNDP). It evaluates and ranks countries based on the Human Development Index (HDI), which measures development beyond just economic growth.
Both the United Nations Development Programme (UNDP) and the World Bank work towards global development, but they have different goals and functions.
Main Focus
- UNDP :- development (education, health, environment, poverty reduction, etc.)
- World Bank :- Economic development (financial assistance, infrastructure projects, economic reforms)
Development Indicator
- UNDP :- Human Development Index (HDI)
- World Bank :- Per Capita Income
Reports Published
- UNDP :- Human Development Report (HDR)
- World Bank :- World Development Report (WDR)
Major Activities
- UNDP :-Works on reducing poverty, improving healthcare & education, promoting gender equality, and sustainability.
- World Bank :- Provides loans & financial aid to developing countries for projects like roads, dams, and power plants.
- UNDP focuses on overall human development, including education, healthcare, and quality of life.
- The World Bank focuses on financial and economic growth, mainly by funding large-scale projects.
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