Previous Year Question
Given below are two statements, one is labelled as Assertion (A) and the other as Reason (R).
Assertion (A): Development is being defined as improving living standards and welfare.
Reason (R): Growth in per capita income is not a sufficient measure of development.
Select the correct answer from the codes given below:
Both (A) and (R) are true and (R) is the correct explanation of (A).
(A) is false, but (R) is true.
Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(A) is true, but (R) is false.
Correct Answer: A
Detailed Solution
Assertion (A) is correct. Development does not merely mean an increase in the total production or income of an economy. Genuine development also involves improvements in people's living standards, health, education, employment opportunities, social welfare and overall quality of life.
This is why a distinction is made between Economic Growth and Economic Development.
Economic Growth mainly refers to a quantitative increase in real output or real income.
In contrast, Economic Development is a broader concept involving economic growth together with improvements in structural conditions, productivity, human welfare and social conditions. Thus, development concerns not only “how much output has increased” but also “how much people's lives have improved.”
Reason (R) is also correct. An increase in Per Capita Income alone is not a sufficient measure of development.
Per Capita Income is an average—
Per Capita Income = National Income ÷ Population
However, an average income does not reveal how income is distributed. National income and average per capita income may rise even if most of the benefits accrue to a small section of society while the living standards of a large population improve very little.
Per capita income alone also does not reveal whether—
poverty has declined,
health and life expectancy have improved,
educational attainment has increased,
employment opportunities have expanded, or
inequality has declined.
Therefore, growth may be necessary for development, but growth alone is not sufficient for development. This directly explains why development is defined more broadly in terms of improvements in living standards and welfare.