DevelopmentClass 10 Economics Notes

WHAT DEVELOPMENT PROMISES — DIFFERENT PEOPLE, DIFFERENT GOALS

The idea of development or progress is about our aspirations for a better life and a better society. It involves thinking about essential requirements, improving life for everyone, achieving greater equality, and finding ways to reach these goals. However, what "development" means can vary greatly from person to person.

Different and Conflicting Goals

People's developmental goals depend on their life situations. Each person seeks what is most important to them, and these desires can be very different.

• Different Goals: A landless rural laborer might aspire for more days of work and better wages, while a prosperous farmer from Punjab might want higher prices for their crops and cheap labor.
• Conflicting Goals: Sometimes, the developmental goals of one group can clash with the goals of another. What is development for one may not be development for the other; it might even be destructive.

INCOME AND OTHER GOALS

A common thread in many developmental aspirations is the desire for more income. People want regular work, better wages, and decent prices for their products. Income is important because it allows us to buy the material goods and services we need.

The Importance of Non-Material Goals

While income is a crucial factor, our quality of life also depends on non-material things. These are goals that cannot be easily measured in money but are very important for a good life. These include:

• Equal treatment
• Freedom
• Security
• Respect from others
• Friendship

In many cases, these non-material goals can be more important than income or consumption. A person's developmental goals are therefore a mix of goals—both material and non-material.

NATIONAL DEVELOPMENT

Just as individuals have different ideas about personal development, they also have different and often conflicting notions of national development. What one person thinks is the best path for the country may not be what another person thinks.

Deciding on a Common Path

National development involves thinking about these conflicting ideas and deciding on a fair and just path for everyone. It raises important questions:

• Is there a better way of doing things?
• Would a particular action benefit a large number of people or only a small group?
• How do we resolve conflicts between different groups' developmental goals?

Thinking about these questions is the essence of understanding national development.

HOW TO COMPARE DIFFERENT COUNTRIES OR STATES?

If development means different things to different people, how can we compare countries and label some as "developed" and others as "underdeveloped"? We do this by focusing on one or more important characteristics or attributes.

Using Income for Comparison

For comparing countries, income is considered one of the most important attributes. The general belief is that higher income allows people to have more of the things they need, leading to a higher level of development.

• Total Income: This is the income of all the residents of a country. However, it's not a useful measure for comparison because countries have different populations.
• Average Income (Per Capita Income): To get a better comparison, we use per capita income, which is the total income of the country divided by its total population.

The World Bank uses per capita income as its main criterion in its World Development Reports to classify countries.

• High-income countries (Rich Countries): Countries with a per capita income of US$ 63,400 per annum and above in 2023.
• Low-income countries: Countries with a per capita income of about US$ 2400 or less.
• India falls into the category of low-middle-income countries, with a per capita income of about US$ 10,030 per annum in 2023.

Limitations of Average Income

While averages are useful for comparison, they have a major weakness: they hide disparities. Average income does not tell us how income is distributed among the people.

• Country A: Incomes are 9500, 10500, 9800, 10000, 10200. The average income is 10,000. The income is distributed fairly evenly.
• Country B: Incomes are 500, 500, 500, 500, 48000. The average income is also 10,000. However, four people are extremely poor, and one is extremely rich.

Even with identical average incomes, Country A is more equitably developed. Most people would prefer to live in Country A because it doesn't have extreme poverty or wealth.

INCOME AND OTHER CRITERIA

Since income alone is an inadequate measure of development, we must also look at other important attributes to get a complete picture.

Beyond Income: A Case Study

A comparison between the Indian states of Haryana, Kerala, and Bihar illustrates this point perfectly.

• Per Capita Income (2021-22): Haryana had the highest per capita income (₹2,64,729), while Bihar had the lowest (₹47,498). Based on income alone, Haryana would be considered the most developed.
• Other Indicators: However, when we look at other crucial indicators of quality of life, the picture changes.
  • Infant Mortality Rate (IMR) (2020): This is the number of children who die before the age of one per 1,000 live births. Kerala's IMR was only 6, while Haryana's was 28.
  • Literacy Rate (2017-18): Kerala had a literacy rate of 94%, while Haryana's was 82% and Bihar's was 62%.
  • Net Attendance Ratio (2017-18): This is the percentage of children aged 15-17 attending school. In Kerala, it was 94%, far ahead of Haryana (73%) and Bihar (69%).

This comparison shows that despite having a lower per capita income, Kerala performs much better than Haryana in key areas of health and education.

PUBLIC FACILITIES

The reason a state like Kerala, with less average income, has better health and education outcomes is the availability of adequate public facilities.

The Role of Collective Services

Money in your pocket cannot buy all the goods and services you need to live well. Income by itself is not a complete indicator of the material goods and services citizens can use.

• Many essential things, like a pollution-free environment, unadulterated medicines, and protection from infectious diseases, depend on the whole community taking collective steps.
• Providing goods and services collectively is often the best and cheapest way.

HUMAN DEVELOPMENT REPORT

Recognizing that income is an inadequate measure, organizations now widely use health and education indicators alongside income to measure development.

A Broader Perspective on Development

The United Nations Development Programme (UNDP) publishes the Human Development Report, which compares countries based on a broader set of criteria. The report uses the Human Development Index (HDI), which focuses on three key components:

1. Health Status: Measured by Life Expectancy at birth (the average expected length of a person's life).
2. Educational Levels: Measured by indicators like the mean years of schooling for adults.
3. Standard of Living: Measured by Gross National Income (GNI) per capita, adjusted for purchasing power parity.

By prefixing "Human" to "Development," the report makes it clear that what is important is what is happening to the citizens of a country—their health and well-being.

SUSTAINABILITY OF DEVELOPMENT

Even if a country is considered developed, it is important that this level of development is maintained for future generations. Sustainability of development means developing in a way that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Since the second half of the twentieth century, many scientists have warned that the current levels and types of development are not sustainable.

Renewable and Non-Renewable Resources

Our development depends on natural resources, which can be categorized as renewable or non-renewable.

• Renewable Resources: These are resources that are replenished by nature, like crops, plants, and groundwater. However, even these can be overused.
  • Example: Groundwater in India. In many parts of India, especially in agriculturally prosperous regions, groundwater is being used faster than it is being replenished by rain. This overuse threatens future agricultural and domestic water availability.
• Non-Renewable Resources: These are resources that have a fixed stock on earth and will get exhausted after years of use, such as crude oil.
  • Example: Crude Oil. At present rates of extraction, the world's crude oil reserves are estimated to last only about 47 more years. Countries like India, which depend on importing oil, face a huge burden if prices rise.

The issue of sustainability is not limited by national boundaries; environmental degradation affects us all. It is a new area of knowledge where scientists, economists, and other social scientists are working together to find solutions.