Chapter I: Development

Economics Notes

1. Concept of Development or Progress

●​ The idea of development or progress has always been present in human thought.
●​ It is linked to aspirations and desires about:
○​ What we want to do.
○​ How we want to live.
○​ What kind of country or society we aim to build.

2. Fundamental Questions About Development

●​ Development involves reflecting on essential requirements for a good life.

●​ Key questions include:
○​ What are the essential things we require?
○​ Can life be improved for everyone?
○​ How should people live together harmoniously?
○​ Is it possible to ensure more equality among people?

3. Nature of Development

●​ Development is not a simple idea; it is a complex task.

●​ It requires:
○​ Thinking deeply about the above questions.
○​ Working out practical ways to achieve these goals.

4. Interdisciplinary Approach

●​ Understanding development goes beyond economics.

●​ It also requires insights from:
○​ History – because the present is shaped by past events.
○​ Political Science – to understand the systems through which change can
happen.

5. Role of the Past

●​ The way we live today is influenced by historical events and decisions.

●​ Awareness of the past is crucial for envisioning meaningful change.

6. Role of Democracy in Development

●​ Development and social change can only be achieved through a democratic political
process.
 ●​ Democracy enables:
○​ Expression of hopes and aspirations.
○​ Real-life achievement of development goals.

7. Learning About Development

●​ This chapter is an introduction to understanding development.

●​ Deeper exploration of these ideas will occur in higher classes.
●​ The subject will be studied across multiple disciplines for a more comprehensive
understanding.

What Development Promises - Different People,

Different Goals
1. Understanding Development from Multiple Perspectives

●​ Development or progress means different things to different people.

●​ It is shaped by:
○​ A person’s needs, socio-economic background, and personal aspirations.
●​ Development goals are not uniform for everyone.

2. Core Idea: Different People, Different Goals

●​ Each person or group seeks goals that are most important to them.
●​ These are based on:
○​ Their current life situation.
○​ Their future hopes or aspirations.
●​ Often, goals may conflict:
○​ What one person sees as development may be harmful to another.

3. Table 1.1: Developmental Goals of Different Categories of Persons

Category of Person Developmental Goals / Aspirations

Landless rural - More days of work and better wages.

labourers - Quality education for their children through local schools.
- No social discrimination.
- Opportunity to become village leaders.

Prosperous farmers - High family income through higher support prices for crops.
from Punjab - Availability of hardworking and cheap labour.
- Ability to send their children abroad.
Farmers who - Timely and adequate rainfall or access to irrigation facilities.
depend only on rain - Crop insurance to cover for crop loss.
- Fair prices for their produce.

A rural woman from - Equal freedom and opportunities as her brother.

a land-owning family - Right to make decisions about her own life.
- Access to higher education or career opportunities.

Urban unemployed - Availability of quality education and vocational training.

youth - Job opportunities with fair income.
- Stable career options.

A boy from a rich - Good career prospects.

urban family - Access to top-class education in India or abroad.
- Luxurious lifestyle and continued economic prosperity.

A girl from a rich - Equal rights and opportunities as her male siblings. - Freedom to
urban family pursue education and career of choice. - Study and live
independently if desired.

An adivasi from - Protection of forest rights and traditional lands. - No displacement

Narmada valley due to big dams or industrial projects. - Access to healthcare,
education, and employment without losing cultural identity.

4. Key Observations from the Table

●​ People have different priorities:

○​ Some value income, others seek freedom, equality, or security.
●​ Development goals may even conflict:
○​ A dam may provide electricity and jobs for urban people but displace adivasis.
●​ Therefore, development must be inclusive and balanced, considering all voices.

5. Broader Learning

●​ A democratic political process is essential to mediate between different goals and

ensure fairness.
●​ Understanding development requires empathy, critical thinking, and a
multidisciplinary approach (economics, history, political science).

1. Do All People Have the Same Notion of Development?

●​ No, different people have different views on what development or progress means.
●​ Development goals vary based on:
○​ Individual needs
○​ Situations
○​ Aspirations
 ○​ Desires

2. Individual Aspirations

●​ Each person or group seeks goals that are most important to them — those that can
fulfill their life expectations.
●​ Examples:
○​ A girl may want equal freedom and opportunities as her brother.
○​ She may also want her brother to share in household responsibilities.

3. Conflicting Goals

●​ At times, the goals or aspirations of different people may be in conflict with each other.
●​ Examples of conflict:
○​ A girl’s goal of equality may conflict with her brother’s desire to retain
traditional gender roles.
○​ Industrialists may want large dams to generate electricity and support
industries.
■​ Tribals and local residents may oppose this because:
■​ Their land gets submerged.
■​ Their lives are disrupted.
■​ Their livelihoods and culture are affected.
○​ Tribals may prefer small check dams or tanks instead — a development model
more suited to their needs and environment.

4. Two Key Conclusions

●​ Conclusion 1:
○​ Different persons can have different developmental goals.
○​ Development is not one-size-fits-all.
●​ Conclusion 2:
○​ What is considered development for one may not be development for another.
○​ It may even be harmful or destructive for the other person or group.

5. Implications for Policy and Planning

●​ Development efforts must:

○​ Be inclusive and sensitive to different perspectives.
○​ Avoid harm to one group in the name of progress for another.
○​ Promote dialogue and democratic decision-making to balance diverse needs.

Income And Other Goals

1. Common Development Goals Across People
 ●​ Across different groups (as seen in Table 1.1), people often desire:
○​ Regular work
○​ Better wages
○​ Decent prices for their crops or products
●​ These reflect a common need: the desire for more income.

2. Beyond Income: Non-Material Goals

●​ In addition to income, people also seek:

○​ Equal treatment
○​ Freedom
○​ Security
○​ Respect from others
○​ Dignity
●​ People resent discrimination.
●​ These non-material goals can be more important than income or consumption in many
situations.
●​ Material goods are not enough for a good life.

3. Importance of Non-Material Things

●​ Money and the things it can buy are just one factor in life quality.
●​ Life quality also depends on non-material aspects such as:
○​ Friendship
○​ Respect
○​ Equality
○​ Security
●​ These are difficult to measure, but they matter greatly.
●​ Just because something can't be measured doesn't mean it is unimportant.

4. Example: Choosing a Job

●​ When offered a job far away, people consider more than just salary:
○​ Facilities for family
○​ Working atmosphere
○​ Opportunities to learn
●​ Comparison of two job situations:
○​ Job A: Lower pay but regular employment, leading to a sense of security.
○​ Job B: High pay but no job security and no family time, leading to reduced
security and freedom.

5. Development Means a Mix of Goals

●​ People look for a combination of goals when they think of development.

●​ Example of women’s development:
○​ Paid work increases a woman’s dignity in household and society.
 ○​ Respect for women also leads to:
■​ Shared household work
■​ Acceptance of women working outside
○​ A safe and secure environment encourages more women to:
■​ Take up various jobs
■​ Run businesses

6. Final Understanding

●​ Developmental goals are not limited to better income.

●​ They include many non-material needs that improve the quality of life.
●​ A holistic approach is needed when thinking about development — one that values
both income and well-being.

National Development
Individuals seek different goals:​
People have diverse personal goals and aspirations.
Different notions of national development:​
Because individual goals vary, their ideas about what national development should be like also
differ.
Class discussion example:​
If students discuss what India should do for development, they are likely to give many different
answers.
Personal uncertainty:​
Even a single person might think of many different ideas and feel unsure about which is best.
Important to remember:

●​ Different people may have different and sometimes conflicting views on what
development means for a country.
●​ Not all ideas can be equally important or practical.

Conflict resolution in development goals:

●​ When ideas conflict, a decision must be made about which to prioritize.

●​ It is necessary to find a fair and just path that can accommodate all or most people.

Fair and just development:

●​ Development should consider the interests of all sections of society.

●​ It should avoid benefiting only a small group at the expense of the majority.

Questions to consider in national development:

●​ Is the idea beneficial to a large number of people or just a small group?

 ●​ Is there a better or more inclusive way to approach development?

Meaning of national development:​

National development involves careful thinking about:

●​ Whose interests are served

●​ How to manage conflicts in goals and ideas
●​ Achieving fairness and justice
●​ Promoting inclusive progress

How To Compare Different Countries Or States?

Question of development meaning:​
Development can mean different things to different people or countries.
Why some countries are called developed or underdeveloped:​
Despite different meanings of development, countries are often categorized as developed or
underdeveloped based on certain criteria.
Comparing different things involves similarities and differences:​
When comparing, we look at both similarities and differences.
Example of comparing students:​
Students differ in:

●​ Height
●​ Health
●​ Talents
●​ Interests
●​ Friendliness
●​ Intelligence

No single student is best in all traits:

●​ Healthiest may not be most studious.

●​ Most intelligent may not be friendliest.

Criteria depend on purpose of comparison:​

Different teams or purposes use different criteria:

●​ Sports team may focus on physical ability.

●​ Debate team on speaking skills.
●​ Music team on musical talent.
●​ Picnic team on cooperation or organization.

Choosing criterion for all-round progress:​

Difficult because of multiple important characteristics:
 ●​ Friendliness
●​ Cooperation
●​ Creativity
●​ Academic marks

Application to development:

●​ Same issue applies to comparing countries.

●​ Which aspects or criteria should be used?

Income as important criterion for development:

●​ Income considered one of the most important attributes.

●​ Higher income generally means better access to things people need.
●​ Thus, greater income is seen as an important goal.

Understanding income of a country:

●​ Total income = sum of incomes of all residents.

●​ Total income alone is not useful for comparing countries due to different population
sizes.

Use of average income (per capita income):

●​ Per capita income = total income divided by total population.

●​ Helps to understand how well the average person is doing.

Use of per capita income in classifying countries:

●​ World Development Reports (World Bank) use per capita income as a key criterion.
●​ Categories in 2023:
○​ High-income countries: per capita income US$ 63,400 and above per annum.
○​ Low-income countries: per capita income about US$ 2,400 or less.
○​ India classified as low middle-income country with per capita income approx.
US$ 10,030 in 2023.

Definition of developed countries:

●​ Rich countries (excluding Middle East and some small countries) are generally called
developed countries.

Income And Other Criteria

Individual aspirations and goals are diverse:​
People seek not only better income but also:
 ●​ Security
●​ Respect from others
●​ Equal treatment
●​ Freedom​
These goals are important alongside income.​

Development of a nation or region involves more than just average income:​

Other equally important attributes must be considered in addition to income.​

Per capita income is often used as a rough measure of development at state level:​
Per Capita Net State Domestic Product at Current Prices is a term roughly equated to per
capita income.​

If only per capita income is used to measure development:​

The state with higher per capita income is considered more developed, and the one with the
lowest income less developed.​

However, per capita income alone does not capture all aspects of development:​
Other indicators need to be examined to get a fuller picture.​

Some other important data used to assess development include:

●​ Infant Mortality Rate (IMR): Number of children dying before age one per 1000 live
births.
●​ Literacy Rate: Percentage of population aged 7 and above who can read and write.
●​ Net Attendance Ratio (secondary stage, ages 15–17): Percentage of children attending
school relative to total children in that age group.

These indicators reflect social and human development factors beyond income:

●​ IMR indicates health and child survival.

●​ Literacy rate shows educational attainment.
●​ Net attendance ratio indicates access to education during teenage years.

Source of these data includes:

●​ Economic Surveys
●​ National Sample Survey Organisation
●​ National Statistical Office, Government of India
●​ National Family Health Survey (NFHS)

Conclusion:​
Development should be understood as multidimensional, including economic, social, and
human factors.​
Income alone is insufficient to judge the overall development of a state or region.

●​ Infant Mortality Rate (IMR) comparison:

○​ In Kerala, out of 1000 children born, only 6 died before completing one year of
age.
○​ In Haryana, the IMR was 28, nearly three times higher than Kerala’s IMR.
●​ Contrast with per capita income:
○​ Haryana’s per capita income is higher than Kerala’s (as per Table 1.3).
○​ Despite Haryana’s higher income, its infant mortality rate is much worse
compared to Kerala.
●​ Emotional and social impact of IMR:
○​ Children are precious to their parents, and every birth is a cause for happiness.
○​ Losing a child before their first birthday is deeply painful for parents.
○​ The high infant mortality rate reflects a serious human tragedy.
●​ Data is recent, not historical:
○​ The infant mortality data is from 2018.
○​ This is 70 years after India’s independence.
○​ Despite urban development (high-rise buildings, malls), infant mortality remains
high in some states.
●​ School attendance issues in Bihar:
○​ About one-third of children aged 15–17 years in Bihar are not attending
secondary school (as per Table 1.4).
○​ This means nearly one-third of classmates in Bihar are missing from school.
○​ Children who could have been in school are absent, affecting their education and
future.
●​ Implications for literacy and education:
○​ If you had gone to school in Bihar, you would have experienced many classmates
missing.
○​ This absence affects children’s ability to read and learn, limiting educational
progress.​

Public Facilities
●​ Discrepancy between income and well-being:
○​ The average person in Haryana has more income than the average person in
Kerala but lags behind in crucial areas like health and education.
○​ This indicates income alone is not a full measure of living standards.
●​ Limitations of income as an indicator:
○​ Money cannot buy all necessary goods and services required for a good life.
○​ For example:
■​ Money alone cannot guarantee a pollution-free environment.
 ■​ Money cannot ensure unadulterated medicines unless one moves to a
community where these are available.
●​ Community-wide factors:
○​ Money may not protect individuals from infectious diseases unless the entire
community adopts preventive measures.
○​ Many important things are better and cheaper when provided collectively rather
than individually.
●​ Examples of collective provision:
○​ Collective security for a locality is cheaper and more effective than each house
hiring its own security.
○​ Studying requires a community effort:
■​ If no other children want to study, it would be difficult for one child to study
unless parents can afford private schooling elsewhere.
■​ Schools and facilities provided by government and society enable children
to study.
●​ Role of government and society:
○​ Government and society have a responsibility to provide facilities like schools to
ensure equal opportunity for all children to study.
○​ Despite this, in many areas, especially for girls, access to high school education
remains inadequate due to lack of facilities.
●​ Kerala has a low Infant Mortality Rate because it has adequate provision of basic health
and educational facilities. Similarly, in some states, the Public Distribution System (PDS)
functions well. Health and nutritional status of people of such states is certainly likely to
be better.
●​ Isn’t it surprising that a small country in our neighbourhood, Sri Lanka, is much ahead of
India in every respect and a big country like ours has such a low rank in the world? Table
1.6 also shows that though Nepal and Bangladesh have low per capita income than that
of India, yet they are better than India in life expectancy. Many improvements have been
suggested in calculating HDI and many new components have been added to the
Human Development Report but, by pre-fixing Human to Development, it has made it
very clear that what is important in development is what is happening to citizens of a
country. It is people, their health, their well being, that is most important. Do you think
there are certain other aspects that should be considered in measuring human
development?

Sustainability Of Development
●​ Desire for continued or increased development:
○​ A developed country aims to maintain or increase its level of development for
future generations.
○​ This continuation or improvement is obviously desirable.
●​ Warnings about sustainability since mid-20th century:
○​ Scientists have warned that current types and levels of development may not be
sustainable.
 ●​ Types of natural resources:
○​ Renewable resources:
■​ Resources replenished by nature (e.g., crops, plants, groundwater).
■​ Even renewable resources can be overused.
■​ Example: If groundwater extraction exceeds replenishment by rain, the
resource is overused.
○​ Non-renewable resources:
■​ Resources that will get exhausted after a certain period of use.
■​ Earth has a fixed stock that cannot be replenished.
■​ Discovery of new sources can temporarily add to stock, but eventually
these too get exhausted.
●​ Environmental degradation:
○​ Consequences do not respect political boundaries (national or state).
○​ Environmental issues are no longer specific to a single region or nation.
○​ The future of all regions and countries is interconnected.
●​ Sustainability as a new field:
○​ Sustainability of development is a relatively new area of knowledge.
○​ It involves collaboration among scientists, economists, philosophers, and social
scientists.
●​ Ongoing question of development:
○​ The question of development or progress is perennial (always relevant).
○​ As individuals and members of society, we must continually ask:
■​ Where do we want to go?
■​ What do we wish to become?
■​ What are our goals?
●​ Development debate continues:
○​ Due to evolving challenges and perspectives, the debate on development is
ongoing and never fully settled.
​