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Economics
Development
Q1) What is Development?
A1) Development is a process that involves forward and onward movement towards a destination which in turn
presents better social and economic conditions.
Q2) What are the developmental goals of –
a) Landless Rural Labourers – More days of work and better wages; local school is able to provide quality
education to their children; there is no social discrimination and they too can become leaders in the village.
b) Prosperous farmers from Punjab – Assured a high family income through higher support prices for their
crops and through hardworking and cheap labourers; they should be able to settle their children abroad.
c) Farmers who depend only on rain for growing crops – There should be availability and creation of irrigation
facilities; generation of employment in the non farm sector; better social acceptance.
d) A rural woman from a land owning family – Less gender discrimination; should be able to participate in
decision making by family; a little more independent space and freedom.
e) Urban unemployed youth – Generation of more and high wage job opportunities; opportunity to acquire
more skills.
f) A boy from rich urban family – Availability of high-tech consumer goods; opportunity to study abroad; earn
high income, foreign travel.
g) A girl from a rich urban family – She gets as much freedom as her brother and is able to decide what she
wants to do in life. She is able to pursue her studies abroad.
h) A tribal from Narmada valley – stable resettlement with liberal income earning opportunities; educational
facilities for children; medication for self and family.
Q3) why do different people have different notions of development?
OR
Which of the following explanations about development is more important and why?
1) Because people are different
2) because life situations of different people are different.
A3) They have different notions of development because people are different and life situations of people are
different. Development is all about aspirations and ambition. This begins the from base and builds up vertically. A
person with no means or resource would seek his basic subsistence. If successful, he will look for some comforts
initially and some luxuries subsequently.
We seek things which fulfil our desires and ambitions.
Q4) Developmental goals of different persons may be conflicting. Explain.
OR
Diff persons can gave diff development goals and what may be the development for one may not be the
development for others. It may be even destructive for other. Explain
A4)
I) Two persons or group of persons may seek things which are conflicting. A girl expects as much freedom and
opportunity as her brother and that he also shares in the household work. Her brother may not like this.
II) Similarly, to get more electricity, industrialists may want more dams. But this may submerge the land and disrupt
the lives of people who are displaced such as the tribals. They might resent this and may prefer small check dams or
tanks to irrigate their land. So two things are quite clear, one, different persons can have different developmental
goals and two, what may be development for one may not be development for the other. It may even be destructive
for the other.
Q5) What is the 1 common thing in the developmental goals of all sections of society?
A5) One common thing what people desire are regular work, better wages, and decent price for their crops or other
products that they produce. In other words, they want more income.
Q6) What are the other non material things that we aspire?
A6) Money or material things that one can buy with is one factor on which our lives depends. But the quality of our
life depends on neon material things. Besides seeking more income one way or the other, people also seek things
like equal treatment, freedom, security and respect of others. They resent discrimination. All these are important
goals. In fact, in some cases, these may be more important than more income or more consumption because
material goods are not at all that you need to live. Also one aspires for good health, god education, good training
facilities, friendly and cordial neighbourhood and social compatibility.
Q7) For development, people look at a mix of goals. Explain.
A7) For development, people look at a mix of goals. It is true that if women are engaged in paid work, their dignity in
the household and society increases. However, it is also the case that if there is respect for women, there would be
more sharing of housework and a greater acceptance of women working outside. A safe and secure environment
may allow more women to take up a variety of jobs or run a business.
Q8) What are the points that one considers or gives importance when he gets a job at far off place?
A8) If we get a job in a far off place, before accepting it we would try to consider many factors, apart from income,
such as facilities for your family, working atmosphere or opportunity to learn. In another case, a job may give you
less pay but may offer regular employment that enhances your sense of security. Another job, however may offer
high pay but no job security and also leave no time for your family. This will reduce your sense of security and
freedom.
Q9) Do the following two statements mean the same? Justify your answer.
a) People have different developmental goals.
b) People have conflicting developmental goals.
A9)
I) Both the statements are true but both mean different things. Different persons are placed in different situations.
Hence, their notions of development are different. A person at the bottom of economic ladder is looking to earn
basic means of subsistence. As a person moves up the ladder, his ideas about development change. He sees a
qualitative improvement in his life.
II) Not only do different people have different developmental goals but also these goals come into conflict with each
other. What may be viewed as developmental goal from one angle may prove destruction from other. For example:
An industrialists would like more multipurpose projects to come up so that more electricity would be produced that
would help him to run the machines continuously but an “adivasi” who is owning a land in an area where a dam is to
be built, would never support this idea because the construction of the dams might cause submergence of the land
and disrupt/endanger the lives of people who are dispersed. So development goals can also be conflicting.
Q12) What is Gross Domestic Product?
A12) Gross Domestic Product (GDP) is the sum total of all the final value of goods and services produced in a country
in a year.
Q13) What is per-capita income?
A13) Per-capita income is the average income of a person in a country.
Or
It is the total income of the country divided by its total population.
Q14) What is the total income of a country?
A14) It is the sum total of income of all the residents of the country.
Q15) How is per capita income found out?
A15) The per capita income is found out by dividing the national income by the population of a country. Per capita
income, which is the average income of country, is a very important indicator of a country’s development. It tells us
that what the share of each person in national income is.
Q16) Why is Total income of a country considered a very important criteria for measuring income?
A16) For comparing countries, their income is considered to be one of the most important attributes. Countries with
higher income are more developed than others with less income. This is based on the understanding that more
income means more of all things that human beings need. Whatever people like,and should have,they will be able to
get with greater income. So greater income, itself is considered to be one important goal.
Q17) What is the limitation in taking total income as a criteria for measuring development?
A17) However, for comparison between useful countries, total income is not such a useful measure. Because,
countries have different populations; comparing total income will not tell us what an average person is likely to earn.
Hence we compare the avg. income which is the total income of the country divided by its total population, also
called as per capita income.
Q18) What is the criteria on the basis of which countries have been classified in the World Development Report
2006 given by the World Bank?
A18)
I) In WDR, 2006 brought out by the world bank per capita income is to classifying countries.
II)Countries with per capita income of Rs. 453000 per annum and above in 2004, are called rich countries and those
with per capita income of Rs. 37,000 or less are called low income countries. Middle income countries are those
whose income falls between these 2 ranges.
III) India comes in the category of low income countries because its per capita income in 2004 was just Rs. 28000 per
annum. The rich countries excluding countries of Middle East and certain other small countries are generally called
developed countries.
Q19) What is the rank of India according to WDR, 2006?
A19) According to the World Development Report 2006, India comes under the category of low income countries
because its per capita income in 2004 was just Rs. 28000 per annum.
Q20) What can be the development goals for a village?
A20) The development goals of a village are:
I) Properly designed and well planned use of land for different purposes such as habitation, shopping centres, factory
area, transportation, agriculture and communication.
II) Adequate and proper residential accommodation for all the sections of the society should be done.
III) There should be convenient shopping and commercial complexes.
IV) Wide and opened roads so that no traffic jams are caused and the traffic moves quickly and smoothly.
V) Good educational and medical facilities should be provided in the neighbourhood of each area.
VI) Railway stations, bus terminals and airports should be easily accessible.
PAGE 7 – BLUE BOX
Q21) Who are the people who benefitted and who didn’t benefit?
A21) People who are benefitted by the dumping of the toxic wastes are the MNC agencies dealing in petroleum and
metals and the local company of the Ivory Coast that undertook the job of disposal of toxic waste from the ship. The
people who didn’t benefit from this were the people from Abidjan, who were exposed to fumes from the highly toxic
waste.
Q22) What should be the development goal for this country?
A22) The development goals of Abidjan are as follows:
I) To set up treatment plants for liquid toxic wastes. The wastes should be treated and harmful elements destroyed
before it is dumped.
II) To set up a regulatory system which keeps a watch over such activities. Till treatment plants are set up, toxic
wastes shouldn’t be allowed to be dumped.
III) Private greed shouldn’t be permitted at the cost of social welfare.
Page – 9 LETS WORK THESE OUT
Q23) Give 3 examples where an average is used for comparing situations?
A23)
I) Average runs scored by 2 batsmen in 10 innings played by them in a tournament.
II) Average marks of students in SST in section A can be compared with the section B.
III) Average salary of employees in two different banks.
Q24) Why do you think average income is an important criterion for development?
A24) Different countries differ in the level of economic development. They are different in different aspects. We can
compare one country with another country with respect to different factors such as population, wheat output, and
number of industrial workers and size of the capital formation. But none of these would give us an overall view of the
economy. To get an overall view of the economy and to compare it with another economy Therefore, we make use
of the per-capita income which is the average income of the country.
Q25) Besides the size of per capita income, what other property of income is important in comparing two or more
societies?
A25) A very important property of national income is its distribution among the citizens. If a large part of the national
income gets concentrated with a few individuals and a large mass of people are left with little income, we call this
situation as unequal distribution of income. On the contrary, if the national income is widely distributed among all
the persons, it represents a better distribution of income. A high per capita income coupled with better distribution
of income is a very good index for economic welfare but if the per capita income is high and its distribution is
unequal, it doesn’t necessarily reflect a better economic welfare.
Q26) 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?
A26) All the sections of the economy are considered to have become better if the additional income is distributed
among all the sections. Conversely, if all the additional income has been countered by the rich people, the gap
between the rich and the poor will widen. For example, Indian economy experienced a rapid increase in per capita
income during 2000 and 2007. But most of the increase went to the richer sections of the society. Therefore, the
inequalities of income have widened during this period.
Q27) What should India do to become a developed country?
A27) India, presently is a developing country. It is moving at a good speed on road of development. There is an
urgent need to accelerate the speed further. For this, we can suggest the following:
I) Increase rate of savings and investment in the economy. This will build up the capital stock and add to the
production potential of the economy.
II) We should pay more attention towards building the infrastructural facilities in our country. This includes transport
and communication, power generation and financial institutions.
III) We should promote the social sector by giving it the highest priority at this stage of development. Educational
and health facilities should be made available to all the sections of society. This will lead to human and social
development.
IV) We should develop a healthy partnership between state and private entrepreneurs to fulfil this task. Even, foreign
capital should be encouraged.
Q28) Why is Punjab a prosperous state?
A28)
I) Green revolution has developed in Punjab and output of wheat and rice has gone up several times in this state.
II) Many industries like woollen industry, fertilizer industry, bicycle industry, sport item industries etc have been
greatly developed in Punjab. This has made Punjab a prosperous state.
Q29) Define the following:
a) Infant Mortality Rate (IMR) – indicates the number of children that die before the age of 1 year as a proportion of
1000 live children born in that particular year.
b) Literacy rate – measures the proportion of literate population in the age group 7 years and above.
c) Net Attendance Ratio – is the total number of children of age group 6 – 10 attending school as a percentage of
total number of children in the same age group.
PAGE – 12 (LETS WORK THESE OUT)
Q30) Look at data in Table 1.3 and 1.4. Is Punjab ahead of Bihar in literacy rate etc as it is in terms of per capita
income?
A30) Punjab is much ahead of Bihar in terms of per capital income. Similarly Punjab is much ahead of Bihar in terms
of–
I) In controlling Infant mortality rate – (49 out of 1000)
II) Literacy rate (70%)
III) Net Attendance Ratio for classes 1-5(81%)
But Bihar lags behind in Per capita income as it is only Rs. 5700 when compared to 26000 of Punjab. Its infant
mortality rate is 60 per 1000. Literacy rate is 47% and net attendance ratio is only 41%. That means more than 50%
of children of school going age do not go to school.
Q31) Think of other examples where collective provision of goods and services is cheaper than individual
provisions?
A31) Roadways, Railways, telephone, public parks, industrial products.
Q32) What does the Table 1.4 (Comparison between Punjab, Kerela and Bihar) show?
A32) The first column of the table shows that in Kerela, out of 1000 children born alive 11 dies before completing
one year of age but in Punjab the proportion of children dying within one year of birth is 49, which is nearly five
times more. On the other hand, the per capita income of Punjab is much more than income of Kerela. The data
pertains in the year 2003. So we are not talking of old times: it is 56 years after independence when our metro towns
are full of high rise buildings and shopping malls. The last column shows that more than half of the children in Bihar
do not even get to go to school. This means that if you went to school in Bihar more than half of your class would be
missing.
Q33) Why is Kerela having low Infant Mortality rate?
A33) Kerela has low infant mortality rate because it has adequate provision of basic health and educational facilities.
Similarly, in some states, the PDS functions well. If some PDS shop i.e. ration shop doesn’t function properly in such
places, the people there are able to get the problem rectified. Health and nutritional status of people of such states
is certainly likely to be better.
Q34) What is BMI?
A34) One way to find out if adults are undernourished is to calculate the Body Mass Index. This is easy to calculate.
Take the weight in kg. Take height in metres. Divide the weight by the square of the height. If this figure is less than
18.5, then the person would be undernourished. However, if this BMI is more than 25, then a person is overweight.
This criterion is not valid to growing children.
Q35) Define –
a) Life expectancy at birth – average expected length of life of a person at the time of birth
b) Gross Enrolment Ratio for three levels – enrolment ratio for primary school, secondary school and higher
education beyond secondary school.
c) Per Capita Income with purchase power parity in us dollars – calculated in dollars for all the countries so that
it can be compared. It is also done in a way so that every dollar would buy the same amount of goods and
services in any country.
Q36) Name the organisation that brought out Human Development Report. What criterions are taken into account
while calculating/accessing Human Development Index?
A36) United Nations Development Programme brought out the Human Development Report. Criterions such as Per
Capita income at Purchasing Power Parity (PPP) in USD, Life expectancy at birth, Literacy rate for 15+ populations
and Gross Enrolment Ratio for three levels are used to calculate Human Development Index.
Q37) According to Table 1.6 on Comparison of India and its neighbours, answer the questions –
I) What is the HDI Rank of India and which of our neighbour has better HDI rank than us?
I) India (126). Sri Lanka (93)
II) Name the countries which are at the top and bottom with respect to –
a) Per Capita Income in US dollars – Sri Lanka (4390) and Myanmar (1027)
b) Life Expectancy – Sri Lanka (74) and Myanmar (61)
c) Literacy Rate – Sri Lanka (91%) and Bangladesh (41%)
d) Gross Enrolment Ratio for 3 levels – Sri Lanka (69) and Pakistan(35)
Q38) What is Sustainable Economic Development?
A38) Sustainable Economic Development means while developing the economy, in which we use resources in such a
way, that while meeting our demands, we keep in mind the needs of future generations. And we take care not to
cause damage to environment.
Q39) While averages are useful for comparison, they also hide disparities. Explain.
A39) Say for example, the monthly income of 5 people in countries A and B are given, which show that all the people
have somewhat similar monthly income or equally distributed income in country A. Whereas in country B, four
people are extremely poor with low monthly incomes and one is extremely rich. Therefore, averages don’t tell us
how the income is distributed among the people of a country and hide disparities. Averages are useful when values
are somewhat closer or near and don’t have larger gaps, like in country A, where people are neither very rich nor
extremely poor.
Q40) Compare the data of Table 1.3 and 1.4 given on page 10. Which state is more prosperous?
A40)
I) Table 1.3 gives the Per capita income of Punjab, Kerela, and Bihar. According to the data, Punjab has the highest
per capita income and Bihar is at the bottom. This means that on an average, a person in Punjab earns Rs. 26000 in 1
year, whereas on an average a person in Bihar would earn only Rs. 5700. So if Per Capita Income were to be used as
the measure of development, Punjab will be considered the most developed and Bihar the least developed of the 3.
II) In Table 1.4, the first column of the table shows that in Kerela, out of 1000 children born alive 11 dies before
completing one year of age but in Punjab the proportion of children dying within one year of birth is 49, which is
nearly five times more. On the other hand, the per capita income of Punjab is much more than income of Kerela. The
data pertains in the year 2003. So we are not talking of old times: it is 56 years after independence when our metro
towns are full of high rise buildings and shopping malls. The last column shows that more than half of the children in
Bihar do not even get to go to school. This means that if you went to school in Bihar more than half of your class
would be missing.
Q41) How is it that the average person in Punjab has more income than the average person in Kerela but lags
behind in crucial areas?
OR
Money in your pocket cant buy all the goods and services that you may need to live. Explain.
A41)
I) Money in your pocket cant buy all the goods and services that you may need to live. So income by itself is not a
completely adequate indicator of material goods and services that citizens are able to use.
For example – Normally money can’t buy us a pollution free environment or ensure that we get unadulterated
medicines, unless we can afford to shift to a community that already has all these things. Money may also not be
able to protect us from infectious diseases, unless the whole of our community takes preventive steps.
II) Actually for many of the important things in life the best way, also the cheapest way is to provide these goals and
services collectively.
For example – It will be cheaper to have a collective security for the whole locality rather for each house to have its
own security.
Similarly, we are able to study because many other children also want to study and because many people believe
that the government should open schools and provide other facilities so that all children have a chance to study.
Q42) How is collective services, a best way to get the most of the important things in life?
A42) Actually for many of the important things in life the best way, also the cheapest way is to provide these goals
and services collectively.
For example – It will be cheaper to have a collective security for the whole locality rather for each house to have its
own security.
Similarly, we are able to study because many other children also want to study and because many people believe
that the government should open schools and provide other facilities so that all children have a chance to study.
Q43) What does GDP indicate?
A43) It indicates how big the country’s economy is.
Q44) Name different sectoral classifications of the Indian Economy and their basis.
A44)
I) Nature of activity: Primary sector, Secondary sector and Tertiary Sector
II) Basis of Ownership: Public sector and private sector
III) Basis of employment: Organised sector and Unorganised Sector
Q45) What is Human development Report, 2006?
A45) It is a report published by United Nations Development Program, which compares countries based on the
educational levels of the people, their health status and per capita income.
Q46) What can you say about India’s crude oil reserves?
A46) India doesn’t produce enough or have adequate stock of crude oil of its own. India depends on importing oil
from abroad because they don’t have enough stock of their own. If prices of oil increase, this will soon become a
great financial burden for the country. Countries like USA, have low reserves and hence want to secure oil through
military or economic power.
In addition to this burden, due to fast industrialisation, the demand for crude oil is also likely to increase. The experts
that the global stock of crude oil may last for only 43 more years due to increasing consumption. This makes
sustainability of Indian growth difficult.
Q47) How is GDP measured? Explain in detail.
A47) GDP is the final value of total produce in a given year of the primary, secondary and tertiary sectors minus the
raw materials (Like Jute and cotton) and intermediate goods (like motor parts produced for car industry). GDP can be
measured in 3 ways –
I) We can count the value of what has been produced in the country in a given year, not counting either raw
materials or intermediate goods used in domestic production (to avoid double counting)
II) Similarly, if we add the incomes earned in a given year in production, we will get the income measure of GDP.
III) In the same way, we can get the GDP by counting all the payment s made in a year.
If there are no mistakes made in the 3 ways of counting, each will give the same value of GDP.
Q48) What are the characteristic features of a developed country?
A48) Generally, economic development of a country is measured on the basis of its national income. Both national
income and per capita income concepts are described in terms of money and are essential. Besides this, majority of
the people have to be ensured regular and higher income and basic amenities like food, clothing, shelter, health,
freedom of equal opportunity. In other words, development means increase in per capita income and better
distribution among all sections of the people.
In short, economic development can be defined as long term increase in per capita income along with improvement
in the quality of life.
Q49) Which areas have reserves of crude oil?
A49)
I) Middle East – 89 billion tonnes which will last for 93 years.
II) USA – 4 billion tonnes which will last for 10 years.
III) World – 137 billion tonnes which will last for 43 years.
Q50) Which countries come under the category of rich countries according to the World Development Report,
2006?
A50) Those countries which export oil and industrial goods and are well developed with technological progress and
the ones which have per capital income of Rs. 4,53,000 per annum and above in 2004, are called rich countries. The
rich countries are USA and other countries of Northern and Southern America and some of the European countries
excluding countries of the Middle East and certain small countries.
Important Points
I) Different persons could have different as well as conflicting notions of a country’s development
II) CSO (Central Statistical Organisation) of government of India fulfils the task of measuring GDP in India.
III) Even though the level of income is important, yet it is an inadequate measure of the level of development.
IV) Health and education indicators have come to be widely used along with income as a measure of development.

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Development final

  • 1. Economics Development Q1) What is Development? A1) Development is a process that involves forward and onward movement towards a destination which in turn presents better social and economic conditions. Q2) What are the developmental goals of – a) Landless Rural Labourers – More days of work and better wages; local school is able to provide quality education to their children; there is no social discrimination and they too can become leaders in the village. b) Prosperous farmers from Punjab – Assured a high family income through higher support prices for their crops and through hardworking and cheap labourers; they should be able to settle their children abroad. c) Farmers who depend only on rain for growing crops – There should be availability and creation of irrigation facilities; generation of employment in the non farm sector; better social acceptance. d) A rural woman from a land owning family – Less gender discrimination; should be able to participate in decision making by family; a little more independent space and freedom. e) Urban unemployed youth – Generation of more and high wage job opportunities; opportunity to acquire more skills. f) A boy from rich urban family – Availability of high-tech consumer goods; opportunity to study abroad; earn high income, foreign travel. g) A girl from a rich urban family – She gets as much freedom as her brother and is able to decide what she wants to do in life. She is able to pursue her studies abroad. h) A tribal from Narmada valley – stable resettlement with liberal income earning opportunities; educational facilities for children; medication for self and family. Q3) why do different people have different notions of development? OR Which of the following explanations about development is more important and why? 1) Because people are different 2) because life situations of different people are different. A3) They have different notions of development because people are different and life situations of people are different. Development is all about aspirations and ambition. This begins the from base and builds up vertically. A person with no means or resource would seek his basic subsistence. If successful, he will look for some comforts initially and some luxuries subsequently. We seek things which fulfil our desires and ambitions. Q4) Developmental goals of different persons may be conflicting. Explain. OR Diff persons can gave diff development goals and what may be the development for one may not be the development for others. It may be even destructive for other. Explain A4) I) Two persons or group of persons may seek things which are conflicting. A girl expects as much freedom and opportunity as her brother and that he also shares in the household work. Her brother may not like this. II) Similarly, to get more electricity, industrialists may want more dams. But this may submerge the land and disrupt the lives of people who are displaced such as the tribals. They might resent this and may prefer small check dams or tanks to irrigate their land. So two things are quite clear, one, different persons can have different developmental goals and two, what may be development for one may not be development for the other. It may even be destructive for the other.
  • 2. Q5) What is the 1 common thing in the developmental goals of all sections of society? A5) One common thing what people desire are regular work, better wages, and decent price for their crops or other products that they produce. In other words, they want more income. Q6) What are the other non material things that we aspire? A6) Money or material things that one can buy with is one factor on which our lives depends. But the quality of our life depends on neon material things. Besides seeking more income one way or the other, people also seek things like equal treatment, freedom, security and respect of others. They resent discrimination. All these are important goals. In fact, in some cases, these may be more important than more income or more consumption because material goods are not at all that you need to live. Also one aspires for good health, god education, good training facilities, friendly and cordial neighbourhood and social compatibility. Q7) For development, people look at a mix of goals. Explain. A7) For development, people look at a mix of goals. It is true that if women are engaged in paid work, their dignity in the household and society increases. However, it is also the case that if there is respect for women, there would be more sharing of housework and a greater acceptance of women working outside. A safe and secure environment may allow more women to take up a variety of jobs or run a business. Q8) What are the points that one considers or gives importance when he gets a job at far off place? A8) If we get a job in a far off place, before accepting it we would try to consider many factors, apart from income, such as facilities for your family, working atmosphere or opportunity to learn. In another case, a job may give you less pay but may offer regular employment that enhances your sense of security. Another job, however may offer high pay but no job security and also leave no time for your family. This will reduce your sense of security and freedom. Q9) Do the following two statements mean the same? Justify your answer. a) People have different developmental goals. b) People have conflicting developmental goals. A9) I) Both the statements are true but both mean different things. Different persons are placed in different situations. Hence, their notions of development are different. A person at the bottom of economic ladder is looking to earn basic means of subsistence. As a person moves up the ladder, his ideas about development change. He sees a qualitative improvement in his life. II) Not only do different people have different developmental goals but also these goals come into conflict with each other. What may be viewed as developmental goal from one angle may prove destruction from other. For example: An industrialists would like more multipurpose projects to come up so that more electricity would be produced that would help him to run the machines continuously but an “adivasi” who is owning a land in an area where a dam is to be built, would never support this idea because the construction of the dams might cause submergence of the land and disrupt/endanger the lives of people who are dispersed. So development goals can also be conflicting. Q12) What is Gross Domestic Product? A12) Gross Domestic Product (GDP) is the sum total of all the final value of goods and services produced in a country in a year. Q13) What is per-capita income? A13) Per-capita income is the average income of a person in a country. Or It is the total income of the country divided by its total population. Q14) What is the total income of a country? A14) It is the sum total of income of all the residents of the country. Q15) How is per capita income found out? A15) The per capita income is found out by dividing the national income by the population of a country. Per capita income, which is the average income of country, is a very important indicator of a country’s development. It tells us that what the share of each person in national income is.
  • 3. Q16) Why is Total income of a country considered a very important criteria for measuring income? A16) For comparing countries, their income is considered to be one of the most important attributes. Countries with higher income are more developed than others with less income. This is based on the understanding that more income means more of all things that human beings need. Whatever people like,and should have,they will be able to get with greater income. So greater income, itself is considered to be one important goal. Q17) What is the limitation in taking total income as a criteria for measuring development? A17) However, for comparison between useful countries, total income is not such a useful measure. Because, countries have different populations; comparing total income will not tell us what an average person is likely to earn. Hence we compare the avg. income which is the total income of the country divided by its total population, also called as per capita income. Q18) What is the criteria on the basis of which countries have been classified in the World Development Report 2006 given by the World Bank? A18) I) In WDR, 2006 brought out by the world bank per capita income is to classifying countries. II)Countries with per capita income of Rs. 453000 per annum and above in 2004, are called rich countries and those with per capita income of Rs. 37,000 or less are called low income countries. Middle income countries are those whose income falls between these 2 ranges. III) India comes in the category of low income countries because its per capita income in 2004 was just Rs. 28000 per annum. The rich countries excluding countries of Middle East and certain other small countries are generally called developed countries. Q19) What is the rank of India according to WDR, 2006? A19) According to the World Development Report 2006, India comes under the category of low income countries because its per capita income in 2004 was just Rs. 28000 per annum. Q20) What can be the development goals for a village? A20) The development goals of a village are: I) Properly designed and well planned use of land for different purposes such as habitation, shopping centres, factory area, transportation, agriculture and communication. II) Adequate and proper residential accommodation for all the sections of the society should be done. III) There should be convenient shopping and commercial complexes. IV) Wide and opened roads so that no traffic jams are caused and the traffic moves quickly and smoothly. V) Good educational and medical facilities should be provided in the neighbourhood of each area. VI) Railway stations, bus terminals and airports should be easily accessible. PAGE 7 – BLUE BOX Q21) Who are the people who benefitted and who didn’t benefit? A21) People who are benefitted by the dumping of the toxic wastes are the MNC agencies dealing in petroleum and metals and the local company of the Ivory Coast that undertook the job of disposal of toxic waste from the ship. The people who didn’t benefit from this were the people from Abidjan, who were exposed to fumes from the highly toxic waste. Q22) What should be the development goal for this country? A22) The development goals of Abidjan are as follows: I) To set up treatment plants for liquid toxic wastes. The wastes should be treated and harmful elements destroyed before it is dumped. II) To set up a regulatory system which keeps a watch over such activities. Till treatment plants are set up, toxic wastes shouldn’t be allowed to be dumped.
  • 4. III) Private greed shouldn’t be permitted at the cost of social welfare. Page – 9 LETS WORK THESE OUT Q23) Give 3 examples where an average is used for comparing situations? A23) I) Average runs scored by 2 batsmen in 10 innings played by them in a tournament. II) Average marks of students in SST in section A can be compared with the section B. III) Average salary of employees in two different banks. Q24) Why do you think average income is an important criterion for development? A24) Different countries differ in the level of economic development. They are different in different aspects. We can compare one country with another country with respect to different factors such as population, wheat output, and number of industrial workers and size of the capital formation. But none of these would give us an overall view of the economy. To get an overall view of the economy and to compare it with another economy Therefore, we make use of the per-capita income which is the average income of the country. Q25) Besides the size of per capita income, what other property of income is important in comparing two or more societies? A25) A very important property of national income is its distribution among the citizens. If a large part of the national income gets concentrated with a few individuals and a large mass of people are left with little income, we call this situation as unequal distribution of income. On the contrary, if the national income is widely distributed among all the persons, it represents a better distribution of income. A high per capita income coupled with better distribution of income is a very good index for economic welfare but if the per capita income is high and its distribution is unequal, it doesn’t necessarily reflect a better economic welfare. Q26) 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? A26) All the sections of the economy are considered to have become better if the additional income is distributed among all the sections. Conversely, if all the additional income has been countered by the rich people, the gap between the rich and the poor will widen. For example, Indian economy experienced a rapid increase in per capita income during 2000 and 2007. But most of the increase went to the richer sections of the society. Therefore, the inequalities of income have widened during this period. Q27) What should India do to become a developed country? A27) India, presently is a developing country. It is moving at a good speed on road of development. There is an urgent need to accelerate the speed further. For this, we can suggest the following: I) Increase rate of savings and investment in the economy. This will build up the capital stock and add to the production potential of the economy. II) We should pay more attention towards building the infrastructural facilities in our country. This includes transport and communication, power generation and financial institutions. III) We should promote the social sector by giving it the highest priority at this stage of development. Educational and health facilities should be made available to all the sections of society. This will lead to human and social development. IV) We should develop a healthy partnership between state and private entrepreneurs to fulfil this task. Even, foreign capital should be encouraged. Q28) Why is Punjab a prosperous state? A28) I) Green revolution has developed in Punjab and output of wheat and rice has gone up several times in this state. II) Many industries like woollen industry, fertilizer industry, bicycle industry, sport item industries etc have been greatly developed in Punjab. This has made Punjab a prosperous state.
  • 5. Q29) Define the following: a) Infant Mortality Rate (IMR) – indicates the number of children that die before the age of 1 year as a proportion of 1000 live children born in that particular year. b) Literacy rate – measures the proportion of literate population in the age group 7 years and above. c) Net Attendance Ratio – is the total number of children of age group 6 – 10 attending school as a percentage of total number of children in the same age group. PAGE – 12 (LETS WORK THESE OUT) Q30) Look at data in Table 1.3 and 1.4. Is Punjab ahead of Bihar in literacy rate etc as it is in terms of per capita income? A30) Punjab is much ahead of Bihar in terms of per capital income. Similarly Punjab is much ahead of Bihar in terms of– I) In controlling Infant mortality rate – (49 out of 1000) II) Literacy rate (70%) III) Net Attendance Ratio for classes 1-5(81%) But Bihar lags behind in Per capita income as it is only Rs. 5700 when compared to 26000 of Punjab. Its infant mortality rate is 60 per 1000. Literacy rate is 47% and net attendance ratio is only 41%. That means more than 50% of children of school going age do not go to school. Q31) Think of other examples where collective provision of goods and services is cheaper than individual provisions? A31) Roadways, Railways, telephone, public parks, industrial products. Q32) What does the Table 1.4 (Comparison between Punjab, Kerela and Bihar) show? A32) The first column of the table shows that in Kerela, out of 1000 children born alive 11 dies before completing one year of age but in Punjab the proportion of children dying within one year of birth is 49, which is nearly five times more. On the other hand, the per capita income of Punjab is much more than income of Kerela. The data pertains in the year 2003. So we are not talking of old times: it is 56 years after independence when our metro towns are full of high rise buildings and shopping malls. The last column shows that more than half of the children in Bihar do not even get to go to school. This means that if you went to school in Bihar more than half of your class would be missing. Q33) Why is Kerela having low Infant Mortality rate? A33) Kerela has low infant mortality rate because it has adequate provision of basic health and educational facilities. Similarly, in some states, the PDS functions well. If some PDS shop i.e. ration shop doesn’t function properly in such places, the people there are able to get the problem rectified. Health and nutritional status of people of such states is certainly likely to be better. Q34) What is BMI? A34) One way to find out if adults are undernourished is to calculate the Body Mass Index. This is easy to calculate. Take the weight in kg. Take height in metres. Divide the weight by the square of the height. If this figure is less than 18.5, then the person would be undernourished. However, if this BMI is more than 25, then a person is overweight. This criterion is not valid to growing children. Q35) Define – a) Life expectancy at birth – average expected length of life of a person at the time of birth b) Gross Enrolment Ratio for three levels – enrolment ratio for primary school, secondary school and higher education beyond secondary school. c) Per Capita Income with purchase power parity in us dollars – calculated in dollars for all the countries so that it can be compared. It is also done in a way so that every dollar would buy the same amount of goods and services in any country.
  • 6. Q36) Name the organisation that brought out Human Development Report. What criterions are taken into account while calculating/accessing Human Development Index? A36) United Nations Development Programme brought out the Human Development Report. Criterions such as Per Capita income at Purchasing Power Parity (PPP) in USD, Life expectancy at birth, Literacy rate for 15+ populations and Gross Enrolment Ratio for three levels are used to calculate Human Development Index. Q37) According to Table 1.6 on Comparison of India and its neighbours, answer the questions – I) What is the HDI Rank of India and which of our neighbour has better HDI rank than us? I) India (126). Sri Lanka (93) II) Name the countries which are at the top and bottom with respect to – a) Per Capita Income in US dollars – Sri Lanka (4390) and Myanmar (1027) b) Life Expectancy – Sri Lanka (74) and Myanmar (61) c) Literacy Rate – Sri Lanka (91%) and Bangladesh (41%) d) Gross Enrolment Ratio for 3 levels – Sri Lanka (69) and Pakistan(35) Q38) What is Sustainable Economic Development? A38) Sustainable Economic Development means while developing the economy, in which we use resources in such a way, that while meeting our demands, we keep in mind the needs of future generations. And we take care not to cause damage to environment. Q39) While averages are useful for comparison, they also hide disparities. Explain. A39) Say for example, the monthly income of 5 people in countries A and B are given, which show that all the people have somewhat similar monthly income or equally distributed income in country A. Whereas in country B, four people are extremely poor with low monthly incomes and one is extremely rich. Therefore, averages don’t tell us how the income is distributed among the people of a country and hide disparities. Averages are useful when values are somewhat closer or near and don’t have larger gaps, like in country A, where people are neither very rich nor extremely poor. Q40) Compare the data of Table 1.3 and 1.4 given on page 10. Which state is more prosperous? A40) I) Table 1.3 gives the Per capita income of Punjab, Kerela, and Bihar. According to the data, Punjab has the highest per capita income and Bihar is at the bottom. This means that on an average, a person in Punjab earns Rs. 26000 in 1 year, whereas on an average a person in Bihar would earn only Rs. 5700. So if Per Capita Income were to be used as the measure of development, Punjab will be considered the most developed and Bihar the least developed of the 3. II) In Table 1.4, the first column of the table shows that in Kerela, out of 1000 children born alive 11 dies before completing one year of age but in Punjab the proportion of children dying within one year of birth is 49, which is nearly five times more. On the other hand, the per capita income of Punjab is much more than income of Kerela. The data pertains in the year 2003. So we are not talking of old times: it is 56 years after independence when our metro towns are full of high rise buildings and shopping malls. The last column shows that more than half of the children in Bihar do not even get to go to school. This means that if you went to school in Bihar more than half of your class would be missing. Q41) How is it that the average person in Punjab has more income than the average person in Kerela but lags behind in crucial areas? OR Money in your pocket cant buy all the goods and services that you may need to live. Explain. A41) I) Money in your pocket cant buy all the goods and services that you may need to live. So income by itself is not a completely adequate indicator of material goods and services that citizens are able to use. For example – Normally money can’t buy us a pollution free environment or ensure that we get unadulterated medicines, unless we can afford to shift to a community that already has all these things. Money may also not be able to protect us from infectious diseases, unless the whole of our community takes preventive steps. II) Actually for many of the important things in life the best way, also the cheapest way is to provide these goals and services collectively.
  • 7. For example – It will be cheaper to have a collective security for the whole locality rather for each house to have its own security. Similarly, we are able to study because many other children also want to study and because many people believe that the government should open schools and provide other facilities so that all children have a chance to study. Q42) How is collective services, a best way to get the most of the important things in life? A42) Actually for many of the important things in life the best way, also the cheapest way is to provide these goals and services collectively. For example – It will be cheaper to have a collective security for the whole locality rather for each house to have its own security. Similarly, we are able to study because many other children also want to study and because many people believe that the government should open schools and provide other facilities so that all children have a chance to study. Q43) What does GDP indicate? A43) It indicates how big the country’s economy is. Q44) Name different sectoral classifications of the Indian Economy and their basis. A44) I) Nature of activity: Primary sector, Secondary sector and Tertiary Sector II) Basis of Ownership: Public sector and private sector III) Basis of employment: Organised sector and Unorganised Sector Q45) What is Human development Report, 2006? A45) It is a report published by United Nations Development Program, which compares countries based on the educational levels of the people, their health status and per capita income. Q46) What can you say about India’s crude oil reserves? A46) India doesn’t produce enough or have adequate stock of crude oil of its own. India depends on importing oil from abroad because they don’t have enough stock of their own. If prices of oil increase, this will soon become a great financial burden for the country. Countries like USA, have low reserves and hence want to secure oil through military or economic power. In addition to this burden, due to fast industrialisation, the demand for crude oil is also likely to increase. The experts that the global stock of crude oil may last for only 43 more years due to increasing consumption. This makes sustainability of Indian growth difficult. Q47) How is GDP measured? Explain in detail. A47) GDP is the final value of total produce in a given year of the primary, secondary and tertiary sectors minus the raw materials (Like Jute and cotton) and intermediate goods (like motor parts produced for car industry). GDP can be measured in 3 ways – I) We can count the value of what has been produced in the country in a given year, not counting either raw materials or intermediate goods used in domestic production (to avoid double counting) II) Similarly, if we add the incomes earned in a given year in production, we will get the income measure of GDP. III) In the same way, we can get the GDP by counting all the payment s made in a year. If there are no mistakes made in the 3 ways of counting, each will give the same value of GDP. Q48) What are the characteristic features of a developed country? A48) Generally, economic development of a country is measured on the basis of its national income. Both national income and per capita income concepts are described in terms of money and are essential. Besides this, majority of the people have to be ensured regular and higher income and basic amenities like food, clothing, shelter, health, freedom of equal opportunity. In other words, development means increase in per capita income and better distribution among all sections of the people. In short, economic development can be defined as long term increase in per capita income along with improvement in the quality of life.
  • 8. Q49) Which areas have reserves of crude oil? A49) I) Middle East – 89 billion tonnes which will last for 93 years. II) USA – 4 billion tonnes which will last for 10 years. III) World – 137 billion tonnes which will last for 43 years. Q50) Which countries come under the category of rich countries according to the World Development Report, 2006? A50) Those countries which export oil and industrial goods and are well developed with technological progress and the ones which have per capital income of Rs. 4,53,000 per annum and above in 2004, are called rich countries. The rich countries are USA and other countries of Northern and Southern America and some of the European countries excluding countries of the Middle East and certain small countries. Important Points I) Different persons could have different as well as conflicting notions of a country’s development II) CSO (Central Statistical Organisation) of government of India fulfils the task of measuring GDP in India. III) Even though the level of income is important, yet it is an inadequate measure of the level of development. IV) Health and education indicators have come to be widely used along with income as a measure of development.