Development | Case Based Questions | Chapter 1 | Economics

Q.1 Read the given extract and answer the following questions.

Once it is realised that even though the level of income is important, yet it is an inadequate measure of the level of development, we begin to think of other criterion. There could be a long list of such criterion but then it would not be so useful. What we need is a small number of the most important things. Health and education indicators, such as the ones we used in comparison of Kerala and Haryana, are among them. Over the past decade or so, health and education indicators have come to be widely used along with income as a measure of development. For instance, Human Development Report published by UNDP compares countries based on the educational levels of the people, their health status and per capita income. It would be interesting to look at certain relevant data regarding India and its neighbours from Human Development Report 2023-24.

i) Which two indicators, other than income, are considered important to measure development? (1)

Answer:- Health and education indicators.

ii) Name the international organisation that publishes the Human Development Report. (1)

Answer:- United Nations Development Programme (UNDP).

iii) Why is income alone not a sufficient measure of development? Explain. (2)

Answer:- Income shows economic growth, but it ignores people’s health and education. A country may be rich, yet its people may lack good healthcare and schooling. That’s why health and education, along with income, are used to measure true development.

Q.2 Read the given extract and answer the following questions.

Since, countries have different populations, comparing total income will not tell us what an average person is likely to earn. Are people in one country better off than others in a different country? Hence, we compare the average income which is the total income of the country divided by its total population. The average income is also called per capita income. In World Development Reports, brought out by the World Bank, this criterion is used in classifying countries. Countries with per capita income of US$ 63,400 per annum and above in 2023, are called high income or rich countries and those with per capita income of about US$ 2400 or less are called low-income countries. India comes in the category of low middle income countries because its per capita income in 2023 was just about US$ 10030 per annum. The rich countries, excluding countries of Middle East and certain other small countries, are generally called developed countries.

i) What is another name for average income? (1)

Answer:- Per capita income.

ii) India’s per capita income in 2023 was about US$ 10,030 per annum. In which income category does India fall? (1)

Answer:- Low middle income countries.

iii) Why is it misleading to compare countries only on the basis of total income? Support your answer with an example. (2)

Answer:- Countries have different populations, so total income alone doesn’t show people’s living standard. For example, a country may have high total income but also a very large population, which reduces its per capita income.