Human Development & Inclusive Growth

Economic Development• Economic Growth & Economic Development

are used as synonymous • However, there is a difference. Economic

Development is a Broader concept • Economic Growth implies rise in National

Income • Whereas Economic Development implies

economic growth with economic welfare

Economic Development• Economic Development is economic

growth and other changes leading to overall development of the economy

• For Instance, rise in productivity, development of capital mkt, reduction in poverty & unemployment, etc.

• Economic D. is multi dimensional & hence cannot e measured By 1 Index

Economic Development• Economists use variety of parameters to indicate process

of development • All parameters which indicate improvement in the

quality of life of people are termed as Indicators of Development

• Below are 4 major indicators of Economic D– Per Capita Income – Physical Quality of Life Index– Human Development Index– Quality of Life Index

Human Development Index (HDI)• HDI was developed by a special agency of

United Nations (UN) viz United Nations Development Program (UNDP)

• HDI is a summary of 3 criteria's – Life Expectancy Index – Long & Healthy Life– Educational Attainment Index – Literacy Rate – Std of Living Index – measured in Per Capita

Income

Human Development Index (HDI)• Index of each criteria is calculated & simple average

of them will give HDI • Value of HDI varies from 0 – 1• Countries with 1 HDI have higher level of economic

welfare and countries with 0 HDI have least economic welfare

• As per HDI, countries below 0.5 are low HD countries• 0.5-0.8 – Medium HD countries • 0.8 & above are high HD countries

Human Development Index (HDI)

• Achievement Level of Components Indices = Actual Value – Minimum Value / Maximum Value – Minimum Value

• HDI = 1/3 * (LEI + EAI + SLI)

Measures

Index Components Unit Minimum

Maximum Actual

I Life Expectancy Years 25 85 60

II Educational Attainment % 0 100 40

III Std of Living PCI 100 40000 20000

Inclusive Growth• India is a Mixed Economy i.e. Private & Public Sector

coexist • Equality in distribution of income & wealth is a major

objective of Indian Economic Planning however, the goal is not yet achieved

• Growth Rate in India has increased considerably post LPG program

• However the economists are of view that the benefits of the growth have not reached to the poor people

Inclusive Growth• Growth in India is termed as “Jobless Growth” as

many sections of society like SC, ST, Women & other minorities do not get a share of the benefits

• Viz lack of Inclusiveness of weaker sections of society

• To ensure that benefits reach to the poor people UN Millennium Declaration was adopted in Sept 2000 by UN member Nations

Inclusive Growth• This declaration helped in forming Millennium

Declaration Goals (MDG) viz reduction of poverty, empowerment of women, environment stability, control of diseases etc.

• Term Inclusive Growth means equitable growth • Implies benefits of growth should reach to poor

namely, SC, ST, women

Inclusive Growth• To achieve inclusive growth, growth should

not only take place in cities but also in small villages and town

• Due to LPG campaign growth rate of India was 8-9 % but it did not reach to all the sections of the society

• For instance, slow reduction in poverty, high unemployment, low literacy rate etc.

Inclusive Growth• To ensure benefits of growth reaching

all sections of society, govt adopted Inclusive Growth as theme of 11th 5 year Plan (2007-2012)

11th Five Year Plan (2007-2012)• Objectives of 11th Five Year Plan (2007-

2012)– Equal opportunities to all – Reduction of Poverty & unemployment – National Rural Employment Guarantee Program

to be used to generate jobs– Environment Sustainability– Providing Good Governance

Importance of Inclusive Growth in 11th Plan

• Reduction in Poverty & Rise in Income • Development of Agriculture Sector • Human Resource Development • Infrastructural Development • Environmental Protection

Millennium Development Goals• In Sept 2000, UN organized a summit known as

Millennium Summit wherein “Millennium Development Goals” was signed y 189 countries

• They agreed to work together in a time bound period to improve std of living in poor countries

• As per declaration, 8 goals have to be achieved by 2015 and these goals are called as “Millennium Development Goals” MDG

Millennium Development Goals• Eradicate extreme poverty & hunger • Achieve Universal primary education • Promote Gender equality & empower women • Reduce Child Mortality • Improve maternal health • Combat HIV/AIDS, malaria & other epidemic diseases • Ensure environment stability • Develop Global partnership for development

Questions • Explain Economic Development and

Human Development Index • Throw light on Inclusive Growth • Discuss 11th 5 year Plan in India • Short Note on MDG