Development is Chapter 1 of Class 10 Economics, from the NCERT book Understanding Economic Development. It asks a simple question: what is development, and how do we compare it between people, states and countries? The chapter covers the goals of development, per capita income, the World Bank’s method of comparing countries, the limits of averages, public facilities, the Human Development Index and sustainability. Here are the notes in simple English.
Chapter at a glance
- Different people have different development goals. Income matters, but so do equal treatment, freedom, security and respect.
- Countries are usually compared by per capita income (average income). Averages hide inequality.
- Money cannot buy everything. Public facilities (schools, hospitals, ration shops, a clean environment) matter. Kerala shows this.
- The Human Development Index (HDI) compares countries on income, health and education.
- Development must be sustainable: it should not destroy resources needed by future generations.
What development promises: different people, different goals
A landless labourer wants more days of work and better wages, and a good education for the children. A prosperous farmer wants higher support prices and cheap labour. A rural woman wants the freedom to work outside and equal treatment at home. So development goals differ for different people. Sometimes goals conflict: a big dam gives electricity to industrialists, but displaces tribal people from their land.
People want regular work, better wages and decent prices for their crops, that is, more income. But they also want equal treatment, freedom, security, the respect of others, and a pollution-free environment. So development is a mix of goals, not income alone.
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How do we compare countries and states? Income and average income
For comparing countries, total income is not useful, because countries have different populations. So we use average income, also called per capita income: the total income of the country divided by its total population.
The World Bank, in its World Development Report, classifies countries by per capita income. Countries with a high per capita income are called rich (high-income) countries; those with a low per capita income are called low-income countries. India comes in the category of low middle income countries. (The exact dollar figures change every year; use the figures given in your textbook edition.) Rich countries, other than the countries of the Middle East and some small countries, are generally called developed countries.
Why averages hide the truth
The textbook example: Country A has five people earning ₹9,500, ₹10,500, ₹9,800, ₹10,000 and ₹10,200. Country B has five people earning ₹500, ₹500, ₹500, ₹500 and ₹48,000. Both have the same average income of ₹10,000, but in Country B one person is very rich and four are very poor. So while average income is useful for comparison, it hides how income is distributed among people.
Income and other criteria: the Kerala example
The chapter compares Haryana, Kerala and Bihar. Haryana has the highest per capita income of the three, but Kerala has a lower infant mortality rate, a higher literacy rate and a higher net attendance ratio in schools. Meaning of the terms:
- Infant mortality rate (IMR): the number of children who die before one year of age, out of 1,000 live births in a year.
- Literacy rate: the proportion of literate people in the age group of 7 years and above.
- Net attendance ratio: the total number of children of the age group 14 and 15 attending school, as a percentage of the total number of children in the same age group.
So income alone does not tell us about health and education. Money in your pocket cannot buy all the goods and services you need to live well.
Public facilities
Many important things are provided collectively, not individually: a pollution-free environment, unadulterated medicines, protection from infectious diseases, and security. The cheapest way to provide them is collectively. Kerala has a low infant mortality rate because it has adequate basic health and education facilities. Its Public Distribution System (PDS) ration shops work well, so people get food grains at fair prices. In some states, ration shops do not open or the grain is sold in the black market.
Human Development Index (HDI)
The United Nations Development Programme (UNDP) publishes the Human Development Report, which compares countries on the basis of the educational levels, health status and per capita income of their people. The indicators used are:
- Gross National Income (GNI) per capita, in purchasing power parity (PPP) dollars, so that incomes can be compared across countries.
- Life expectancy at birth: the average expected length of life of a person at the time of birth.
- Mean years of schooling of people aged 25 and above, and expected years of schooling.
Countries are ranked by HDI. In the table in your textbook, Sri Lanka ranks higher than India despite a lower per capita income, because it does better on health and education. Check the exact ranks and year in your edition.
The chapter also introduces the Body Mass Index (BMI) as a way to check whether adults are undernourished: BMI = weight in kilograms divided by the square of height in metres. A BMI below 18.5 means the person is undernourished; above 25 means overweight.
Sustainability of development
Development must continue for future generations. Two examples of the danger: groundwater is being overused in India (it is a renewable resource, but if we use more than what is replenished, it will be exhausted); and crude oil reserves are non-renewable, and at the present rate of extraction the world’s known reserves would last only a few decades. Sustainable development means the present generation should meet its needs without harming the ability of future generations to meet theirs. As the chapter says: “We have not inherited the world from our forefathers; we have borrowed it from our children.”
Key terms
| Term | Meaning |
|---|---|
| Per capita income | Total income of a country divided by its total population; also called average income. |
| Infant mortality rate | Number of children dying before the age of one year, out of 1,000 live births. |
| Literacy rate | Proportion of literate people aged 7 years and above. |
| Net attendance ratio | Percentage of children aged 14 and 15 who attend school. |
| Public Distribution System | The government system of ration shops that sells food grains at fair prices. |
| HDI | Human Development Index: a UNDP measure combining income, health and education. |
| Purchasing power parity | A way of comparing incomes by what money can actually buy in each country. |
| Sustainability | Using resources so that future generations can also meet their needs. |
Important questions
- What is the main criterion used by the World Bank in classifying countries? What are its limitations? (3 marks)
- In what respects is the criterion used by the UNDP for measuring development different from the one used by the World Bank? (3 marks)
- Why do we use averages? Are there any limitations to their use? Illustrate with an example. (3 marks)
- Kerala, with a lower per capita income, has a better human development ranking than Haryana. Hence per capita income is not a useful criterion at all. Do you agree? Discuss. (5 marks)
- Why is the issue of sustainability important for development? (5 marks)
- “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 development? (3 marks)
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FAQs
What is per capita income?
The total income of a country divided by its total population. It is also called average income.
What is the Human Development Index?
A measure published by the UNDP that ranks countries by combining per capita income, life expectancy and years of schooling.
Why does Kerala have a better human development ranking than Haryana?
Because Kerala has better public facilities for health and education, so it has a lower infant mortality rate and a higher literacy rate, even though its per capita income is lower.
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