Class x economics part 1

1. oKJ9J11111AAAAAAAAAAAA3i122222222222222222222222222qa
a
Quality Education For All

2. DEVELOPMENT
UNIT – 1
CHAPTER 1

3. OUTLINE OF THE LESSON:
• The nature and meaning of
development and underdevelopment
• Indicators of human development
• Gender-related development

4. INTRODUCTION
Development

5. An economy continuously attempts
to progress providing for more and
more quantities of goods and
services to the people and
improving their well-being.

6. This process of enhancing
society’s capacity to satisfy its
needs on a larger scale is
referred to as development.

7. WHAT IS ECONOMIC
DEVELOPMENT

8. • Economic development refers to
increase in a country’s capacity to
serve the economic interests of its
citizens and overcoming economic
problems such as poverty,
unemployment, inequality, inflation,
etc.

9. Development?

10. According to Prof. Meier and
Baldwin, “economic development is
a process whereby an economy’s
real national income increases over
a long period of time”.

11. The definition highlights three elements of
economic development :-
a) a process
b) an increase in real national income;
c) Long Period

12. a) Process:

13. The term ‘process’ here refers to the
operation of the forces that bring
about changes in supply of factors of
production and, in the structure of
demand for the products

14. Discovery of additional resources
How does changes in factor supply take place?
Education and skill development,
Capital accumulation
Population growth
Adoption of better techniques of production etc.,

15. How does the demand for products changes?
Demand for products changes
due to:-
Change in size and composition
of population;
Level and distribution of income;
Tastes etc.
These changes contribute to an
increase in national income.

16. b) Real National Income:

17. National income is the total value
of all goods and services produced
in a country during one year. It is
an important measure of
development.

18. Higher the national income, higher
is the economic development and
vice-versa.

19. REAL NATIONAL INCOME
“Real” refers to the purchasing power of income.
The prices have tendency to rise over time.
When we estimate the income based on the
increased prices, the values or incomes are
inflated. We should remove that increased
price effect to arrive at the ‘real’ increase in
income. This price adjusted income reflects
the true purchasing power of income.

20. This emphasizes the importance of
maintaining price stability in
promoting development.
Price stability implies avoiding both
prolonged inflation and deflation. ...
Deflation is accompanied by the threat of a
slowdown in economic growth, because the
general level of prices declines, and thus,
people postpone consumption and
companies postpone investment.

21. c) Long Period:

22. The increase in real national income
should be sustained over a longer
period, say for 10 years or more.
Short term increment in income are
not considered as development.

23. The changes in supply of factors of
production and demand for goods and
services should be continuous in order
to bring about sustained increase in
incomes over the longer period.

24. Economic welfare:

25. Economic welfare, in turn, is the
availability of all those goods and
services which are used by the
individuals.
Prof. Colin Clark defines economic development
as “an improvement in economic welfare.”

26. EXAMPLE:
Reducing economic ills like poverty

27. Inclusive development

28. Ensuring that every person
is benefitted by the process
of development is inclusive
development.

30. Sustainable development

31. Preserving natural resources
and the environment for the
benefit of future generations
also, is sustainable development.

32. 17 SDGs

33. • (1) No Poverty,
• (2) Zero Hunger,
• (3) Good Health and Well-being,
• (4) Quality Education,
• (5) Gender Equality,
• (6) Clean Water and Sanitation, etc.

34. Developed countries of the world.
• USA, Canada, Japan, Germany, England, Australia,
countries of Western Europe witnessed long
term rise in incomes before 1950s; countries
like Singapore, Hong Kong, Malaysia, China and
many other countries have witnessed long term
rise in incomes during post-1950s

35. Underdevelopment:

36. The word ‘underdevelopment’ denotes a
backward and stagnant situation where
levels of living of people are low due to
lower level of per capita income and
lower productivity levels, apart from high
population growth.

37. According to the United Nations, an
underdeveloped country is one
whose real per capita income is
lower than that of the USA, Canada,
Australia and Western Europe.
Emphasis here is on the low income level
relative to the advanced countries.

38. Developing countries

39. Underdeveloped nations are
capable of development and are
making serious efforts to overcome
their problems of low income and
poverty, they are now called as the
‘developing countries’.

40. The World Bank in its ‘World Development Report’
classifies the countries as high, medium and low
income countries, and all countries with ‘middle’ and
low income are referred to as developing countries.
India is a prominent developing country
that has recorded significant rise in
income since 1990s.