Economics
Economics
Economics
What
are the limitations of this criterion, if any?
In the World Development Report, 2006, the World Bank has used the criterion of average
income or per capita income in classifying different countries.
The average income or the per capita income is the total income of the country divided by
its population.
(2) According to the WDR 2006, countries are classified as mentioned below :
Rich countries : Countries with per capital income of? 4,53,000 per annum and above in
2004 are called rich countries
Low-income countries : Countries with per capital income of? 37,000 or less are called
low-income countries.
India comes in the category of low-income countries because its per capital income in
2004 was just ? 28,000 per annum.
Rich countries, excluding countries of Middle East and certain other small countries are
generally called developed countries.
1. It does not tell us how this income is distributed among people. A country may have more
equitable distribution. People may be neither very rich nor extremely poor.
2. In another country with same average income, one person may be extremely rich while
others may be very poor. So, the method of average income does not give correct picture
of a country.
3. This system hides disparities among people.
Q5. In what respects is the criterion used by the UNDP for measuring development different
from the one used by the World Bank?
1. The criterion used by World Bank: The average income, i.e. per capita income is the main
criterion used by the World Bank in classifying different countries.
According to the World Development Report 2006, published by the World Bank,
countries with per capita income of $10066 per annum and above in 2004 are called rich or
developed countries. On the other hand, countries with per capita income of $825 or less
are called low-income countries.
2. The UNDP compares countries based on HDI e., on the educational levels of the people,
their health status and per capital income or average income.
3. Human Development Index used by UNDP is better because it is a wider indicator in which
besides per capital income, health and education are also included.
Q6. Why do we use averages? Are there any limitations to their use? Illustrate with your own
examples related to the development.
(1) We use averages for comparison between two countries, two persons or any two or more
things.
(2) There are the following limitations to the use of averages :
Averages do not tell us about similarities or differences between two countries or persons
or things.
By averages only one aspect income, size etc. in case of country, marks or participation
in sports activities etc. in case of student, can be compared. All aspects or achievements
are not compared.
As only one aspect is compared, it does not give true picture of different countries,
persons or things. For example, students differ in height, health, talents and interests. The
healthiest student may not be the most intelligent or topper in studies. Similar is the case
in respect of countries or states. A country may be ahead than the other country in one
field but may lag behind in the other field. So averages do not give the correct picture.
Q7. Kerala, with lower per capita income, has a better human development ranking than
Punjab. Hence, per capita income is not a useful criterion at all and should not be used to
compare states. Do you agree? Discuss.
It is correct to say that per capita income is not a useful criterion at all and should not be used
to compare states due to reasons as mentioned below :
Money cannot buy all the goods and services that you need to live well. Income by itself is
not a completely adequate indicator of material goods and services that citizens are able
to use.
There cannot be a pollution-free environment in a colony of rich people unless the whole
community takes preventive steps.
Sometimes, it is better to have collective services like security for the whole locality than
to have individual security for one’s own house. Again a school may be opened for the
children of the whole community than for one or two children of a rich person.
Kerala has a better human development ranking than Punjab.
In Kerala, Infant Mortality Rate is 11 in comparison to 49 in Punjab, where the per capita
income is much more than Kerala. It is ? 26000 whereas in Kerala it is ? 22800. It is
because Kerala has adequate basic health and educational facilities.
Similarly in some states, the Public Distribution System (PDS) functions well and people
get ration regularly whereas in some states ration shops do not function properly. At such
places, people face a shortage of grains that affect their health. Thus it is clear that the
states should not be compared on the basis of per capita income – alone.
Q8. Find out the present sources of energy that are used by the people in India. What could be
the other possibilities fifty years from now?
The present sources of energy that are used by the people of India are electricity, coal, crude
oil, cowdung and solar energy. Other possibilities fifty years from now, could include ethanol,
bio-diesel, nuclear energy and better utilization of wind energy, especially with the imminent
danger of oil resources running out.
Q9. Why is the issue of sustainability is important for development?
Sustainable development means that development should meet the needs of the present without
compromising the ability of future generations to meet their needs. However, since the second half of
the twentieth century, a number of scientists have been warning that the present type and levels of
development are not sustainable. The issue of sustainable development has emerged from rapid
industrialization of the world in the past century. It is felt that economic growth and industrialization
have led to the reckless exploitation of natural resources. On the other hand, the stock of natural
resources are limited. So, the growth of all countries in the future is likely to be endangered if the
limited resources are completely exhausted. Under these circumstances, the issue of sustainability has
become important for development. A number of resources are being overused. For example,
groundwater is under serious threat of overuse in many parts of the country i.e., Punjab, Haryana and
western U.P. The water level has declined over 4 meters. As a result of it if we go on overusing there will
be a water crisis in future. Similarly, if non-renewable resources are used recklessly these will also be
exhausted.
Q10. “The Earth has enough resources to meet the need of all but not enough to satisfy the
greed of even one person.” How is this statement relevant to the discussion of development?
Discuss.
This statement is relevant to the discussion of development since both resources and
development go hand in hand. As the statement claims, our earth has enough resources –
renewable and non-renewable to satisfy everyone’s need if we use them in an economic
manner. For the sustainability of development, the consumption and maintenance of resources
is also crucial. We have to use the resources keeping our environment protected and clear so
that there is a balance between the development and use of our resources. As otherwise after a
certain point of time in future the development will be stagnated.
Q11. List a few examples of environmental degradation that you may have observed around
you.
Some of the examples of environmental degradation in the area are as follows :
1. Air pollution has increased due to the emission of smoke from factories and vehicles.
2. There is an increase in water pollution due to shops and small factories in residential areas.
3. There is noise pollution due to the use of loudspeakers at night and blowing of horns
unnecessarily on the roads by different vehicles.
4. People throw garbage wherever they want. Perhaps there is no provision for dustbins in
the streets or roadsides.
5. Sometimes people urinate in the open on the roadside due to a lack of public
conveniences.
Multiple Choice Questions
NCERT Questions
5. Which of the following neighbouring countries has better performance in terms of human
development than India?
(a) Bangladesh
(b) Sri Lanka
(c) Nepal
(d) Pakistan
6. Assume there are four families in a country. The average per capita income of these
families is ₹ 5000. If the income of three families is ₹ 4000, ₹ 7000 and ₹ 3000 respectively,
what is the income of the fourth family?
(a) ₹ 7,500
(b) ₹ 3,000
(c) ₹ 2,000
(d) ₹ 6,000
Additional Questions
7. According to the World Development Report 2004, low-income countries are those which
have per capita income of
(a) $ 900 or less.
(b) $ 1000 or less
(c) $ 825 or less
(d) $ 500 or less
8. Identify which of the following cannot be a development goal for a landless rural
labourer?
(a) More days of work
(b) Better wages
(c) Quality education for children
(d) Foreign tours
9. Besides seeking more income, one way or the other, people also seek things like
(a) equal treatment
(b) freedom
(c) security
(d) all of them
10. Different persons could have different as well as conflicting notions of a country’s
development. A fair and just path for all should be achieved. Interpret the concept being
discussed here.
(a) Social development
(b) Cultural development
(c) National development
(d) Economic development
11. List how many tonnes of liquid toxic wastes a vessel dumped in a city called Abidjan in
Ivory Coast, a country in Africa?
(a) 500 tonnes
(b) 600 tonnes
(c) 900 tonnes
(d) 1000 tonnes
12. Countries with higher income are ………….. than others with less income.
(a) Less developed
(b) More developed
(c) Less stronger
(d) More organised
14. In the World Development Report 2006, Rich Countries were those which in 2004 had
the per capita income of
(a) ₹ 2,53,000 per annum & above
(b) ₹ 14,50,000 per annum & above
(c) ₹ 4,53,000 per annum & above
(d) ₹ 13,53,000 per annum & above
15. In the World Development Report 2006, low-income countries were those which in 2004
had the per capita income of
(a) ₹ 37,000 or less
(b) ₹ 47,000 or less
(c) ₹ 50,000 or less
(d) ₹ 39,000 or less
17. Comparing all states, identify the state which had the highest per capita income in 2002
– 2003.
(a) Kerala
(b) Punjab
(c) Delhi
(d) Bihar
18. Which state had the least per capita income in 2002-03?
(a) Bihar
(b) Rajasthan
(c) Kerala
(d) Delhi
19. Number of children that die before the age of one year as a proportion of 1000 live
children born in that particular year is known as
(a) Death rate
(b) Survival rate
(c) Infant mortality rate
(d) Life death rate
20. Proportion of literate population in the 7 and above age group is called as
(a) Knowledge rate
(b) Literacy rate
(c) Attendance rate
(d) Excellence Rate
21. Which age group of children is included for calculating Net Attendance Ratio?
(a) 6 – 10
(b) 7 – 11
(c) 5 – 9
(d) 10 – 15
23. For the year 1995 – 96, the Net Attendance Ratio for class I to V in Bihar was
(a) 81
(b) 51
(c) 41
(d) 31
24. Literacy rate for the rural male population of Uttar Pradesh is
(a) 62 %
(b) 59 %
(c) 52 %
(d) 42 %
25. For calculating Body Mass Index (BMI), the weight of the person is divided by the
(a) Square of the weight
(b) Square of the height
(c) Square root of the height
(d) Square of the sum of height and weight
26. If BMI is less than 18.5 then the person would be considered
(a) overweight
(b) long height
(c) under nourished
(d) short height
27. Report published by UNDP which compares countries based on the educational levels
of the people, their health status and per capita income is
(a) Human Education Report
(b) Human Development Report
(c) Human Population Report
(d) Human Quality Report
28. HDI Rank of India in the world out of 177 countries in 2004 was
(a) 93
(b) 126
(c) 130
(d) 125
29. India’s per capita income in US $ is …………… Sri Lanka (in 2004)
(a) less than
(b) more than
(c) equal to
(d) less than or equal to
30. Nepal has nearly ……………. the per capita income of India (in 2004)
(a) one – fourth
(b) three – fourth
(c) equal
(d) half