Developing Economics Class 11 economomics

Developing 6:42 PM

Thursday, October 29, 2020

Meaning of economic development : economic development is the concept
concerned with developing or poor countries. It is defined as improvement in living
standard of people along with reduction in poverty, inequality and unemployment.
The concept of economic development is a dynamic and multidimensional . The
concept is changing with time because it is related wit problems like poverty
hunger unemployment inequality inadequate socio-economic infrastructure. In its
world development Repot of 1991, the world Bank defined economic development
as “the change of development is to improve the quality of life, especially in the
worlds’ poor countries, a better of life. Includes better education, higher standard
of health and nutrition, less poverty, a cleans environment, more equality of
opportunity greater individual freedom and a richer cultural life.”
Difference between economic growth and economic development book page no
194 table 4.1
Explain the characteristic of developing countries.

Developing countries differ from one to others but some characteristics or
feature are common which are as follows

1) Economic characteristics: developing countries have low per capita income. They
are unable to fulfill their basic need. Due to low income, natural resources are
underutilized or unutilized or miss utilized, so, there is no development the human
resource and infrastructure. There is mass poverty high unemployed, low literacy
ate low productivity old technology. There is existence of vicious cycle of poverty.

2) Demographic characteristics: rapid population growth is a common characteristic
of most of developing countries. ln these countries infant and child mortality rate
are high. The main cause of rapid population growth illiteracy, poverty, religious
belief, unavailability of mean of family planning, unemployment
underemployment. The portion dependent population is high compare to
developed countries. unskilled and semi-skilled population is the main potation of
population. So, it increases the consumption expenditure which reduce saving
invest and opportunities.

3) Socio-cultural characteristics: different kind of social group resides in a developing
country. developing countries have heterogeneous social pattern in their
economic life. Most of income spend on marriage ceremony festivals. Professional
fobs are culture a caste related.

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fobs are culture a caste related.
4) Political characteristics: there is no political stability in under developed countries.

Governments are frequently change. Leader and politics are guided by powerful
nation and their interest instead o peoples’ betterment.
5) High dependence on agriculture: in developing countries majority of population
live in the rural areas. Its only one source of income and employment is
agriculture. primitive method of cultivation, lack of irrigation, lack of skilled
labour , small size of land , agriculture sectors has not uplift the poor.
6) Dual economy: the existence of two sector i.e. traditional and modern sectors
economy is called dual economy. Most of the developing countries have such
features in various field.

Indicator of economic development
Indicators which show the status of living standard of the citizens of a nation.
Measurement of economic development and expressing it in definite index is a
very difficult task in economic s. However, some common and popular indicator
of economic development are discussed below.
1) Per capita income: per capita income is the first and most important indictor of
economic development of a nation. It is commonly used by all nation. Per capita
income refers to a national income divided by total population. It is the average
income of everyone in an economy.
2) Physical quality of life index (PQLI): it is a composite index that include life
expectancy at birth, infant mortality rate and literacy rate of a country .The value
of PQLI measure in a scale of 0 to 100. Its value is less than 50 is supposed to be
developing.
3) Human development index (HDI): It was initiated by UNDP in 1990. HDI is the
composite index value on life expectancy, education and per capita income. Its
value ranges from 0 to 1. it includes goth income and non-income indicators, so it
is regarded as the good indicator.
4) Rise in factor productivity: development mean rises in production and productivity
of factors of production. Rise in factor productivity implies rise in the production of
land labor capital and organization. So, rising productivity shows improvement in
economic life of individual of an economy.
5) Rising living standard: development is the betterment of human beings. It means
abundance of modern and amenities of life such as plenty of calorie intake in food
comfortable shelter easy approach to education, provision of health facility.
6) Basic human needs: this criterion of economic development was first developed by

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6) Basic human needs: this criterion of economic development was first developed by
the world bank. According to this criterion, development is evaluated on the basis
of fulfillment of basic need like food, clothe, shelter heath, education, nutrition
security, pure drinking water employment etc.

7) Poverty alleviation and inequality reeducation: access to health education skill
development creates opportunity to uplift the poor s life. It also opportunity to
uplift it also increasing income earning capacity. poverty is the cause and effect of
poverty in developing country which create vicious cycle of poverty, Hence.
Poverty has been continued from generation to generation. I if a nation can reduce
the poverty gap. It can be regarded as development.
Explain about Capital formation process
Capital is a manmade means of production which is used in further
production of wealth. capital formation means increase in the stock of res
capital in the country. It involves making of more capital goods such as
machinery tools factories transport equipment’s, materially electricity etc.
such are used for further production of goods and services.
Stages of capital formation

1) Creation of saving: saving is difference between the income and expenditure.
creation of saving depends on income ability to save willingness to save facility to
save.

2) Mobilization of saving: an idle saving is meaningless from economic point of view.
So, saving should be properly mobilize for the capital formation. Various financial
institutional banking mutual funds insurance companies plays crucial role for
mobilizing the saving.

3) Investment of saving: the saving is invested into capital goods by efficient, dynamic
honest and skilled entrepreneurs who are able and ready to take risks and bear
uncertainty of business.

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