Previous Year Question
Consider the following statements and select the correct answer from the code given below:
Assertion (A): Economic development requires a multi-dimensional approach.
Reason (R): The present Government of India is focussing mainly on micro-economic issues.
Codes:
Both (A) and (R) are true and (R) is correct explanation of (A).
Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(A) is true, but (R) is false.
(A) is false, but (R) is true.
Correct Answer: A
Detailed Solution
Assertion (A) is correct. Economic Development is a Multidimensional Process that includes not only an increase in Gross Domestic Product (GDP) or national income but also improvements in education, health, employment, living standards, poverty, inequality, and social and economic opportunities.
Economic Growth primarily represents an increase in the real production of goods and services in an economy, whereas Economic Development includes changes in the quality of life and economic and social structures along with increased production.
The Human Development Index (HDI) is important in assessing economic development. The HDI published by the United Nations Development Programme (UNDP) includes three major dimensions: health, education, and living standards. These are measured through life expectancy at birth, years of schooling, and Gross National Income per capita (GNI per capita), respectively.
Reason (R) is incorrect. In the context of 2015, the Government of India's economic policies were not primarily confined to Microeconomic issues. They also included Macroeconomic Stability, inflation control, fiscal deficit, investment, economic growth, and structural reforms.
The Economic Survey 2014–15 gave special importance to macroeconomic indicators such as inflation, the Current Account Deficit, fiscal conditions, and economic growth. It also focused on reforms related to manufacturing, skill development, infrastructure, and the social sector.
Microeconomics studies individual consumers, firms, specific markets, and price determination, whereas Macroeconomics studies national income, aggregate employment, inflation, economic growth, and the overall performance of an economy.