DEVELOPMENT ECONOMICS

2 MARKS
QNO 1 WHAT IS ECONOMIC GROWTH ?

Economic growth refers to the increase in the production of goods and services in an economy
over a period of time. It is measured by the rise in a country’s Gross Domestic Product (GDP) or
per capita income.

QNO 2 WHAT IS ECONOMIC DEVELOPMENT?

Economic development refers to the improvement in the overall well-being and quality of life of
people in a country. It includes not only economic growth but also factors like better healthcare,
education, infrastructure, and income distribution.

QNO 3 DENSITY OF POPULATION

Density of population refers to the number of people living per unit area of land, usually
measured as the number of people per square kilometer or square mile. It indicates how
crowded or sparsely populated a region is.

QNO 4 CAPITAL ACCUMULATION

Capital accumulation refers to the growth of a country’s stock of capital goods, such as
machinery, tools, infrastructure, and buildings, which are used to produce goods and services. It
plays a key role in economic growth by increasing productivity and output.

QNO 5 Difference Between Economic Growth and Economic Development

Economic Growth refers to an increase in a country's output of goods and services, measured by
GDP. It is a quantitative concept.

Economic Development is a broader concept that includes economic growth along with
improvements in living standards, education, healthcare, and infrastructure. It is qualitative in
nature.

QNO 6 ABSOLUTE AND RELATIVE POVERTY

Absolute Poverty:

It refers to a condition where people lack basic necessities like food, clothing, and shelter. It is
measured based on a fixed poverty line, such as earning below $2.15 per day (as defined by the
World Bank).

Relative Poverty:

It refers to a condition where people have lower income compared to the average standard of
living in their society. It is measured in relation to the income distribution within a country.
QNO 7 POPULATION EXPLOSION

Population explosion refers to the rapid and excessive growth of the population in a short
period, leading to overpopulation. It occurs due to high birth rates, low death rates, and
improved healthcare, resulting in increased pressure on resources, infrastructure, and the
environment.

10 MARKS
QNO 8 MEASURES AND PATTERN OF DEVELOPMENT

Measures of Development:

1.​ Gross Domestic Product (GDP): Total value of goods and services produced in a
country.
2.​ Human Development Index (HDI): Measures education, life expectancy, and income.
3.​ Per Capita Income: Average income per person in a country.
4.​ Gini Coefficient: Measures income inequality.
5.​ Poverty Index: Assesses poverty levels in a country.

Patterns of Development:

1.​ Agricultural to Industrial Shift: Movement from a farming-based economy to an

industrial one.
2.​ Urbanization: Growth of cities due to migration from rural areas.
3.​ Technological Advancement: Increased use of technology in production and services.
4.​ Globalization: Integration of economies through trade and investment.
5.​ Sustainable Development: Focus on economic growth while protecting the environment.

QNO 9 CHARACTERISTICS OF DEVELOPING ECONOMY

Characteristics of a Developing Economy:

1.​ Low Per Capita Income: Average income per person is relatively low.
2.​ High Population Growth: Rapid population increase puts pressure on resources.
3.​ Agriculture Dependency: A large portion of the workforce is engaged in agriculture.
4.​ Unemployment and Underemployment: High levels of joblessness and low productivity
jobs.
5.​ Low Industrialization: Limited industrial and technological development.
6.​ Income Inequality: Unequal distribution of wealth and resources.
7.​ Poor Infrastructure: Inadequate transport, healthcare, and education facilities.
8.​ Economic Dualism: Coexistence of modern industries with traditional sectors.
9.​ Low Human Development Index (HDI): Poor health, education, and living standards.
10.​ External Dependence: Reliance on foreign aid, loans, and imports.

QNO 10) ROLE OF AGRICULTURE IN DEVELOPMENT

Role of Agriculture in Economic Development:

1.​ Source of Employment: Provides jobs to a large portion of the population, especially in
developing countries.
2.​ Contribution to GDP: A significant part of national income comes from agriculture.
3.​ Food Supply: Ensures food security and reduces dependency on imports.
4.​ Raw Materials for Industries: Supplies inputs for industries like textiles, sugar, and food
processing.
5.​ Foreign Exchange Earnings: Export of agricultural products generates foreign currency.
6.​ Market for Industrial Goods: Farmers create demand for machinery, fertilizers, and
consumer goods.
7.​ Poverty Reduction: Growth in agriculture improves rural incomes and reduces poverty.
8.​ Infrastructure Development: Leads to better roads, irrigation, and storage facilities.
9.​ Technological Advancements: Encourages mechanization and scientific farming
practices.
10.​ Environmental Sustainability: Promotes sustainable farming practices for long-term
growth.

QNO 11)Rostow’s Stages of Economic Growth

W.W. Rostow’s "Stages of Economic Growth" is a model that explains how economies develop
in five sequential stages:

1.​ Traditional Society:​

○​ Economy based on agriculture and subsistence farming.

○​ Low productivity and technological advancement.
○​ Limited trade and barter system.
2.​ Preconditions for Take-off:​

○​ Introduction of basic infrastructure like transport and communication.

○​ Shift from agriculture to small-scale industries.
○​ Increased investment in technology and education.
3.​ Take-off Stage:​

○​ Rapid industrialization and high economic growth.

○​ Rise in investments (at least 10% of GDP).
○​ Development of key industries like manufacturing and energy.
4.​ Drive to Maturity:​

○​ Diversification of industries and technological advancements.

○​ Growth spreads across all sectors, including services.
○​ Higher standard of living and urbanization.
5.​ Age of High Mass Consumption:​

○​ Economy reaches a high-income status.

○​ Increased consumer demand for goods and services.
○​ Focus shifts to social welfare, education, and healthcare.
Criticism of Rostow’s Theory:

●​ Assumes all countries follow the same path of development.

●​ Ignores social, political, and cultural factors affecting growth.
●​ Focuses mainly on Western economies as a model.

Despite criticisms, Rostow’s theory provides a useful framework for understanding economic
progress.

QNO 12)EXPLAIN THE IMPACT OF POVERTY ON THE ECONOMIC AND SOCIAL

DIMENSIONS

Impact of Poverty on Economic and Social Dimensions

Economic Impact:

1.​ Low Productivity: Poor health and malnutrition reduce the efficiency of workers.
2.​ Unemployment and Underemployment: Lack of education and skills limits job
opportunities.
3.​ Low Investment and Savings: Poor people cannot save or invest, slowing economic
growth.
4.​ Income Inequality: Widening gap between the rich and the poor.
5.​ Burden on Government: Increased spending on welfare schemes and subsidies.
6.​ Slow Industrial Growth: Weak consumer demand leads to low industrial development.

Social Impact:

1.​ Poor Health and Malnutrition: Limited access to healthcare leads to high disease rates.
2.​ Low Education Levels: Children from poor families have limited access to quality
education.
3.​ High Crime Rates: Poverty often leads to theft, violence, and social unrest.
4.​ Poor Living Conditions: Slums, lack of sanitation, and unsafe drinking water.
5.​ Social Exclusion: The poor face discrimination and limited participation in society.
6.​ Child Labor and Exploitation: Many children work instead of attending school.

Conclusion:

Poverty creates a cycle of underdevelopment, affecting both economic progress and social
well-being. Addressing it through education, healthcare, and employment opportunities is
crucial for sustainable development.

Q NO 13)Poverty Alleviation Programs in India

The Indian government has implemented various programs to reduce poverty and improve
living standards. Some key programs include:

1. Employment and Livelihood Programs

 ●​ Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) (2005):
Provides 100 days of guaranteed wage employment to rural households.
●​ Pradhan Mantri Kaushal Vikas Yojana (PMKVY) (2015): Offers skill development
training for unemployed youth.
●​ Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) (2014): Focuses on
rural skill development for better employment opportunities.

2. Food and Nutrition Security Programs

●​ Public Distribution System (PDS): Provides subsidized food grains to poor families.
●​ Mid-Day Meal Scheme: Offers free meals to school children to improve nutrition and
attendance.
●​ Integrated Child Development Services (ICDS) (1975): Provides food, preschool
education, and healthcare for children and mothers.

3. Financial Inclusion Programs

●​ Pradhan Mantri Jan Dhan Yojana (PMJDY) (2014): Encourages banking access for all,
especially the poor.
●​ Microfinance and Self-Help Groups (SHGs): Provides small loans to rural women and
entrepreneurs.

4. Housing and Basic Needs Programs

●​ Pradhan Mantri Awas Yojana (PMAY) (2015): Aims to provide affordable housing for
all by 2022.
●​ Swachh Bharat Mission (SBM) (2014): Promotes sanitation and cleanliness to improve
public health.

5. Rural and Urban Development Programs

●​ National Rural Livelihood Mission (NRLM) (2011): Supports self-employment and

small businesses in rural areas.
●​ Smart Cities Mission (2015): Focuses on urban development with better infrastructure
and housing.

Conclusion:

These programs aim to reduce poverty by improving employment, healthcare, education, and
financial access. However, effective implementation and monitoring are necessary for their
success.

QNO ROLE OF TECHNOLOGICAL PROGRESS IN ENHANCING ECONOMIC

DEVELOPMENT AND GROWTH

Role of Technological Progress in Enhancing Economic Development and

Growth
Technological progress plays a crucial role in driving economic growth and improving living
standards. It enhances productivity, efficiency, and innovation across various sectors.

1. Economic Growth and Productivity

●​ Increases Production Efficiency: Advanced machinery and automation reduce

production costs and time.
●​ Boosts GDP Growth: Technological innovations lead to higher output and economic
expansion.
●​ Enhances Labor Productivity: Skilled workers using modern tools can produce more in
less time.

2. Industrial and Business Growth

●​ Encourages Innovation: New technologies create industries like IT, biotechnology, and
renewable energy.
●​ Reduces Costs: Automation and AI reduce labor and operational costs for businesses.
●​ Improves Competitiveness: Nations with advanced technology attract foreign
investments.

3. Agriculture and Rural Development

●​ Modern Farming Techniques: Use of mechanized equipment, irrigation systems, and

GM crops increases yield.
●​ Reduces Post-Harvest Losses: Cold storage and food processing technologies prevent
waste.
●​ Digital Connectivity: Farmers access market prices, weather updates, and online trading
platforms.

4. Infrastructure and Urbanization

●​ Smart Cities Development: Technology improves urban planning, transportation, and

housing.
●​ Efficient Energy Use: Renewable energy sources like solar and wind power ensure
sustainable growth.
●​ Better Connectivity: Digital infrastructure enhances communication and business
expansion.

5. Financial and Digital Inclusion

●​ Expands Banking Services: Digital payments, mobile banking, and blockchain improve
financial access.
●​ Encourages Entrepreneurship: E-commerce platforms help small businesses reach
global markets.
●​ Reduces Corruption: Transparency in governance through digital tracking and AI
monitoring.

6. Social and Human Development

 ●​ Improves Healthcare: Medical technologies, telemedicine, and AI-driven diagnostics
save lives.
●​ Enhances Education: E-learning platforms and digital classrooms improve literacy
rates.
●​ Reduces Income Inequality: Technological jobs create opportunities for skill-based
employment.

Conclusion:

Technological progress is a key driver of economic development, leading to higher productivity,

industrial growth, better infrastructure, and improved living standards. Investments in
research, innovation, and digital transformation are essential for sustainable and inclusive
growth.

QNO
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KALDOR'S THEORY OF GROWTH