Haryana Complete - Class 10 Haryana Board Economics

Economics: Development, Sectors, Money, Consumer Rights, and Globalisation

Concept of Development (Vikas)

Development refers to improvement or progress in quality of life, not just quantitative growth. It is a qualitative term, meaning different things to different people based on their aspirations and circumstances.

• Development is subjective: Each individual or group may define development differently.
• Examples: For a landless laborer, development means better wages and education for children; for a prosperous farmer, it means higher income and opportunities for family; for an urban unemployed youth, it means stable employment; for a rich urban girl, it means equal…

Economics: Development, Sectors, Money, Consumer Rights, and Globalisation

Concept of Development (Vikas)

Development refers to improvement or progress in quality of life, not just quantitative growth. It is a qualitative term, meaning different things to different people based on their aspirations and circumstances.

• Development is subjective: Each individual or group may define development differently.
• Examples: For a landless laborer, development means better wages and education for children; for a prosperous farmer, it means higher income and opportunities for family; for an urban unemployed youth, it means stable employment; for a rich urban girl, it means equal freedom as her brother.
• Development can be beneficial for some and destructive for others: E.g., building a road may help workers but harm farmers who lose land; dams benefit some but displace others.

Income and Other Goals

Income is often considered the primary indicator of development, but other non-material aspects are equally important. Quality of life depends on both material goods and non-material factors.

• Material goals: Income, physical goods (e.g., PS5, phone, car).
• Non-material goals: Respect, security, freedom, equality, dignity.
• State comparisons: Haryana has higher income than Kerala, but Kerala leads in literacy rate and infant mortality rate.
• Formula for average income (per capita income):$$\text{Average Income} = \frac{\text{Total Income}}{\text{Total Population}}$$
• World Bank classification: Based on per capita income:
  • Rich country: $63,400 or more per year
  • Poor country: $2,400 or less per year
  • India: $1,030 per year (middle group)

National Development and HDI

National development considers common goals for the entire population, such as education, health, and basic needs. Comparison between countries or states is based on average income, but this does not reflect inequalities.

• Average income is preferred over total income for comparisons due to population differences.
• HDI (Human Development Index): Includes literacy rate, health (infant mortality rate), and per capita income.
• HDI rankings: India ranks 134th, Sri Lanka 78th.
• Infant mortality rate: Number of children dying before age one per 1000 births; high rate indicates poor health facilities.

Public Facilities

Public facilities are services provided by the government that are not affordable for everyone, such as public transport, hospitals, and schools.

• Examples: Government buses, trains, hospitals.
• Income is not a sufficient indicator: High income does not guarantee pollution-free environment, pure food, or health security.
• Public facilities ensure basic needs for all, regardless of income.

Sustainability of Development

Sustainable development means development that lasts for a long time without harming the environment or exhausting resources.

• Definition: Development that benefits present and future generations without environmental harm.
• Resource types:
  • Renewable resources: Can be regenerated (e.g., solar energy).
  • Non-renewable resources: Cannot be regenerated (e.g., coal, petrol).
• Focus: Use renewable resources for sustainable development.

Sectors of Indian Economy

The economy is divided into three sectors based on the nature of activities: primary, secondary, and tertiary.

• Primary sector: Deals with natural resources (e.g., agriculture, fishing, dairy).
• Secondary sector: Transforms primary goods into more valuable products (e.g., manufacturing sugar from sugarcane).
• Tertiary sector: Provides services to support primary and secondary sectors (e.g., banking, transport).
• Interdependence: All three sectors are interconnected; e.g., wheat production (primary), biscuit manufacturing (secondary), transport and sales (tertiary).

Gross Domestic Product (GDP) and Double Counting

GDP is the sum of the final value of goods and services produced in all three sectors within a country during a particular year.

• Definition: Value of all final goods and services produced in a country in one year.
• Calculation: Only final value is counted to avoid double counting.
• Example: If a bed is sold to a customer for ₹1500, only ₹1500 is counted in GDP, not the sum of all intermediate sales.
• Double counting: Adding all intermediate values leads to inflated figures; only final value is used.

Employment and Sectoral Shifts

As economies develop, the contribution of sectors to GDP and employment changes.

• Historical shift: Initially, primary sector dominated GDP and employment; over time, tertiary sector's share increased.
• Current scenario: Primary sector still provides maximum employment despite lower GDP contribution, leading to disguised unemployment.
• Disguised unemployment: More people working than needed, with zero marginal productivity.

Organised and Unorganised, Public and Private Sectors

Economic activities are further classified based on work conditions and ownership.

• Organised sector: Registered, follows government rules, job security, fixed hours, benefits (e.g., PF, insurance).
• Unorganised sector: Not registered, no fixed hours or wages, no job security, often exploitative.
• Public sector: Owned by government, focus on social welfare.
• Private sector: Owned by individuals, focus on profit.

Money and Credit

Money replaced barter system, solving the problem of double coincidence of wants. Modern forms of money include coins, notes, and digital payments.

• Barter system: Exchange of goods for goods; required double coincidence of wants.
• Money: Medium of exchange, solves barter problems.
• Modern forms: Coins, notes, digital payments, cheques.
• Currency issuance: Only RBI can issue currency notes; government gives legal tender status.
• Bank functions: Accept deposits, lend money, act as mediator; keeps 15% reserves, lends 85%.
• Demand deposits: Money can be withdrawn anytime.

Credit: Terms, Sources, and Self-Help Groups

Credit (loan) can be beneficial or harmful depending on terms and circumstances.

• Terms of credit: Interest rate, collateral (security), documentation, repayment schedule.
• Formal sources: Banks, cooperatives; regulated by RBI, lower interest, social welfare.
• Informal sources: Moneylenders, traders; not regulated, high interest, exploitative.
• Self-help groups (SHG): 10-20 members pool savings, provide loans to each other, get bank loans without collateral, help avoid exploitation.

Consumer Rights

Consumers face exploitation in the market; government enacted Consumer Protection Act (COPRA) in 1986 to safeguard their interests.

• Common issues: Underweight goods, adulteration, false information, arbitrary pricing, limited competition, illiteracy.
• Consumer rights:
  • Right to safety (safe products)
  • Right to be informed (labeling, ingredients, expiry)
  • Right to choose (variety, no forced purchase)
  • Right to be heard (complaints)
  • Right to seek redressal (compensation, legal action)
• Redressal system: Three-tier (district, state, national commissions); cases based on value.
• Quality marks: ISI (electrical), Agmark (agricultural), Hallmark (jewelry).

Globalisation and Indian Economy

Globalisation is the economic integration of the world, enabling exchange of goods, services, technology, investment, and labor across countries.

• Definition: Economic integration and interconnection of countries.
• Role of MNCs: Multinational companies operate in multiple countries, seeking lower costs and higher profits.
• Entry methods: Joint ventures, acquisition of local companies, outsourcing production.
• Factors enabling globalisation: Technology (transport, refrigeration), liberalisation (removal of trade barriers), WTO (World Trade Organization) rules.
• Impact on India:
  • Advantages: Better products, increased competition, more jobs, Indian companies expanding abroad.
  • Disadvantages: Small producers lose out, job insecurity, worker exploitation, environmental pollution.
• Fair globalisation: Government should protect workers, support small producers, negotiate fair WTO rules, and form alliances with other developing countries.

Special Economic Zones (SEZ)

SEZs are designated areas where government offers incentives to attract investment and generate employment.

• Benefits: Cheap land, reduced electricity bills, tax incentives.
• Purpose: Encourage companies to invest, create jobs, boost economic activity.