2042

M. A. ECONIMICS
SEMESTER - IV (CBCS)

ECONOMICS OF HUMAN
DEVELOPMENT

SUBJECT CODE - 91509

 © UNIVERSITY OF MUMBAI
Prof.(Dr.) D. T. Shirke
Offg. Vice-Chancellor,
University of Mumbai,

Prin. Dr. Ajay Bhamare Prof. Prakash Mahanwar

Offg. Pro Vice-Chancellor, Director,
University of Mumbai, IDOL, University of Mumbai,

Programme Co-ordinator : Ms. Rajashri Pandit

Asst. Prof. of Economics,
Incharge Head Faculty of Commerce,
IDOL, University of Mumbai, Mumbai

Course Co-ordinator : Dr. Gopal Eknath Ghumatkar

Assistant Professor of Economics,
IDOL, University of Mumbai, Mumbai

Editor : Dr. Pratiksha Narayan Tikar

Assistant Professor of Economics,
IDOL, University of Mumbai, Mumbai

Course Writer : Dr. Gopal Eknath Ghumatkar

Assistant Professor of Economics,
IDOL, University of Mumbai, Mumbai

: Atul Krishna Ghadage

Sheth N. K. T. T.College of Commerce and
Sheth J. T. T. College of Arts, Thane (West)

: Prof. Shubhangi Vartak

Ramniranjan Jhunjhunwala College,
Railway Station Road,
Ghatkopar (W), Mumbai

April 2023, Print - I

Published by : Director
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 CONTENTS

Unit No. Title Page No.

Module 1
1. Concept of Human Development 01
2. Approaches of Human Development and MUDS 12
Module 2
3. Human Development - I 21

4. Human Development - II 34

Module 3
5. Measurement of Human Development - I 46
6. Measurement of Human Development - II 53
Module 4
7. Aspects of Human Development - I 63
8. Aspects of Human Development - II 104




 Economics of Human Development
Number of Credits: 6
Pattern of Evaluation: Non-Standard

Preamble: This course on the Economics of Human Development focuses on the widely- accepted
global perspective of viewing development as the expansion of people’s capabilities, capacities and
choices. This people-centric analytical framework for designing and assessing public policy interventions
has several implications at macro, meso and micro levels both nationally as well as internationally. This
elective has a relatively strong applied component specifically in relation to India that is in-built into
each module.
Non-Standard Evaluation Pattern: The evaluation be done through 40 marks of continuous evaluation
and a 60 marks end-semester examination. The 40 marks evaluation will consist of a mid-term
examination of 20 marks (two questions to be attempted over one hour) and a project of 20 marks on
Modules 3 and 4. The project topics will be announced by the 4th teaching week of the semester and the
projects should be in by the 10th teaching week. All modules will carry equal weight for the three hour
end-semester examination.

Module 1: Concepts of Human Development: (12 Hours)

Growth and Development compared – Perspectives on development – Definition of human development
- Basic Needs Approach – Quality of Life Approach – Capability Approach – Human rights –
Millennium Development Goals

Module 2: Dimensions of Human Development: (12 Hours)

Empowerment, equity, sustainability, security, productivity and participation – Role of freedoms in
promoting human development -- Multi-dimensionality of poverty – Concept of inclusive growth – Role
of civil society, NGOs, and people’s organizations – Obstacles to inclusive growth – Impact of
globalization
Module 3: Measurement: (12 Hours)
Need for indices - GDP – Physical Quality of Life Index (PQLI), Disability Adjusted Life Years
(DALY), Social Capability index – Human Development Index – Human Poverty Index – Gender
Related Development Index – Gender Empowerment Measure

Module 4: Aspects of Human Development: (12 Hours)

Livelihoods – Inequalities – Gender – Child labour – Aging population – Poverty alleviation - Food
Security – Environment – Displacement – Indigenous groups – Migration - Education and Health –
Workers and Informal Sector -- Social Security – Human security – Conflict 19
References:

Essential Readings

1. Chelliah Raja J and R. Sudarshan (ed), Income Poverty and Beyond: Human Development In India,
UNDP, Social Science Press, New Delhi, 1999
2. Comim F, M. Qizilbash and S. Alkire (eds), The Capability Approach: Concepts, Measures and
Applications, Cambridge University Press, Cambridge, 2007
3. Costanza R, B. Low, E. Ostrom and James Wilson (ed), Institutions, Ecosystems and Sustainability,
Lewis Publishers, Boca Raton, 2001
4. Dev S. Mahendra, P. Antony, V. Gayathri, and R P Mamgain, Social and Economic Security in India,
Institute for Human Development, New Delhi, 2001
5. Fukuda-Parr S. and Shiva Kumar A K (ed), Readings in Human Development: Concepts, Measures
and Policies for a Development Paradigm, Oxford University Press, New Delhi, 2003
6. Grinspun, A. (ed), Choices for the Poor, Lessons from National Poverty Strategies, UNDP, New York,
2001
7. International Labour Organization, A Fair Globalization: Creating Opportunities for All, World
Commission on the Social Dimension of Globalization, Geneva, 2004
8. International Labour Organization: World Employment Reports
9. Meier G M and Stiglitz J E (eds), Frontiers of Development Economics, Oxford University Press, New
York, 2001
10. SenAmartya, Development as Freedom, Oxford University Press, New Delhi, 1999
11. SenAmartya and Jean Dreze, India: Economic Development and Social Opportunity, Oxford
University Press, New Delhi, 1998
12. United Nations Development Programme (UNDP), Human Development Reports 1990-2004, Oxford
University Press, New York
13. United Nations Development Programme (UNDP) – India, State Human Development Reports, 2003
– 2006, Oxford University Press, New Delhi.
 MODULE I

1
CONCEPTS OF HUMAN DEVELOPMENT
Unit Structure:
1.0 Objectives
1.1 Introduction
1.2 Growth and Development
1.2.1 Concept of Growth
1.2.2 Concept of Development
1.2.3 Comparison between Growth and Development
1.3 Perspectives on Development
1.4 Questions

1.0 OBJECTIVES
 To study the concepts growth and development in economics.
 To compare between growth and development.
 To study perspectives on development.

1.1 INTRODUCTION
Economic Growth is a narrower concept than economic development. It is
an increase in a country's real level of national output which can be caused
by an increase in the quality of resources (by education etc.), increase in
the quantity of resources & improvements in technology or in another way
an increase in the value of goods and services produced by every sector of
the economy. Economic Growth can be measured by an increase in a
country's GDP (gross domestic product).
Economic development is a normative concept i.e. it applies in the context
of people's sense of morality (right and wrong, good and bad). The
definition of economic development given by Michael Todaro is an
increase in living standards, improvement in self-esteem needs and
freedom from oppression as well as a greater choice. The most accurate
method of measuring development is the Human Development Index
which considers the literacy rates & life expectancy which affects
productivity and could lead to Economic Growth. It also leads to the
creation of more opportunities in the sectors of education, healthcare,
employment and the conservation of the environment. It implies an
increase in the per capita income of every citizen.

1
Economics of Human 1.2 GROWTH AND DEVELOPMENT
Development
1.2.1 Concept of Growth :
The modern conception of economic growth began with the critique of
Mercantilism, especially by the physiocrats and with the Scottish
Enlightenment thinkers such as David Hume and Adam Smith, and the
foundation of the discipline of modern political economy. It is an increase
in the value of goods and services produced by an economy. It is
conventionally measured as the percent rate of increase in real gross
domestic product, or GDP. Growth is usually calculated in real terms, i.e.
inflation-adjusted terms, in order to net out the effect of inflation on the
price of the goods and services produced. In economics, "economic
growth" or "economic growth theory" typically refers to growth of
potential output, i.e. production at "full employment," rather than growth
of aggregate demand.
Economic growth is the increase of per capita gross domestic product
(GDP) or other measure of aggregate income. It is often measured as the
rate of change in real GDP. Economic growth refers only to the quantity of
goods and services produced.
Economic growth can be either positive or negative. Negative growth can
be referred to by saying that the economy is shrinking. Negative growth is
associated with economic recession and economic depression.
In order to compare per capita income across multiple countries, the
statistics may be quoted in a single currency, based on either prevailing
exchange rates or purchasing power parity. To compensate for changes in
the value of money (inflation or deflation) the GDP or GNP is usually
given in "real" or inflation adjusted, terms rather than the actual money
figure compiled in a given year, which is called the nominal or current
figure.
Economists draw a distinction between short-term economic stabilization
and long-term economic growth. The topic of economic growth is
primarily concerned with the long run. The short-run variation of
economic growth is termed the business cycle.
The long-run path of economic growth is one of the central questions of
economics; despite some problems of measurement, an increase in GDP of
a country is generally taken as an increase in the standard of living of its
inhabitants. Over long periods of time, even small rates of annual growth
can have large effects through compounding (see exponential growth). A
growth rate of 2.5% per annum will lead to a doubling of GDP within 29
years, whilst a growth rate of 8% per annum (experienced by some Four
Asian Tigers) will lead to a doubling of GDP within 10 years. This
exponential characteristic can exacerbate differences across nations.

2
1.2.2 Concept of Development : Concepts of Human
Development
The latter half of the 20th century, with its global economy of a few very
wealthy nations and many very poor nations, led to the study of how the
transition from subsistence and resource-based economies to production
and consumption based-economies occurred. This led to the field of
development economics, including the work of Nobel laureates Amartya
Sen and Joseph Stiglitz. However this model of economic development
does not meet the demands of subaltern populations and has been severely
criticized by later theorists.
Economic development is the increase in the standard of living in a
nation's population with sustained growth from a simple, low-income
economy to a modern, high-income economy. Also, if the local quality of
life could be improved, economic development would be enhanced. Its
scope includes the process and policies by which a nation improves the
economic, political, and social well-being of its people.
Gonçalo L Fonsesca at the New School for Social Research defines
economic development as the analysis of the economic development of
nations.
Economic development is a term that economists, politicians, and others
have used frequently in the 20th century. The concept, however, has been
in existence in the West for centuries. Modernization, Westernization, and
especially Industrialization are other terms people have used when
discussing economic development. Although no one is sure when the
concept originated, most people agree that development is closely bound
up with the evolution of capitalism and the demise of feudalism."
The study of economic development by social scientists encompasses
theories of the causes of industrial-economic modernization, plus
organizational and related aspects of enterprise development in modern
societies. It embraces sociological research on business organization and
enterprise development from a historical and comparative perspective;
specific processes of the evolution (growth, modernization) of markets and
management-employee relations; and culturally related cross-national
similarities and differences in patterns of industrial organization in
contemporary Western societies. On the subject of the nature and causes
of the considerable variations that exist in levels of industrial-economic
growth and performance internationally, it seeks answers to such questions
as: "Why are levels of direct foreign investment and labour productivity
significantly higher in some countries than in others?" Mansell and Wehn
state that development has been understood since the Second World War
to involve economic growth, increases in per capita income, and
attainment of a standard of living equivalent to that of industrialized
countries.
Economy Development can also be considered as a static theory that
documents the state of economy at a certain time. According to
Schumpeter (2003) the changes in this equilibrium state to document in

3
Economics of Human economic theory can only be caused by intervening factors coming from
Development the outside.

1.2.3 Comparison between Growth and Development :

There are significant differences between economic growth and economic
development. The term "economic growth" refers to an increase (or
growth) in real national income or product expressed usually as per capital
income. National income or product itself is commonly expressed in terms
of a measure of the aggregate output of the economy called gross national
product (GNP). Per capita income then is simply gross national product
divided by the population of the country. When the GNP of a nation rises,
whatever the means of achieving the outcome, economists refer to it as
economic growth.
The term "economic development," on the other hand, implies much more
when used in relation to a country or an entire economy. It typically refers
to improvements in a variety of
indicators, such as literacy rates and life expectancy, and it implies a
reduction in poverty. Critics point out that GDP is a narrow measure of
economic welfare that does not take into account important non-economic
aspects such as more leisure time, access to health & education, the
environment, freedom, or social justice. Economic growth is a necessary
but insufficient condition for economic development.
Economic Growth does not take into account the size of the informal
economy. The informal economy is also known as the black economy
which is unrecorded economic activity. Development alleviates people
from low standards of living into proper employment with suitable shelter.
Economic Growth does not take into account the depletion of natural
resources which might lead to pollution, congestion & disease.
Development however is concerned with sustainability which means
meeting the needs of the present without compromising future needs.
These environmental effects are becoming more of a problem for
Governments now that the pressure has increased on them due to Global
warming.

Different View related Growth and Development:

For a layman, the terms economic development and economic growth are
synonyms. For a long time, the terms, economic development, economic
growth, economic progress, economic welfare, secular change and other
similar terms are being commonly used in day-to-day life as synonyms.
But some leading economists have drawn a line of demarcation between
them. Under the above heading we shall discuss the difference between
the above two concepts, i.e., economic development and economic growth
which is given below:
Mrs. Ursula Hicks, "Development should relate to underdeveloped
countries, where there is possibility of developing and using hitherto,

4
while the term growth is related to economically rich and advanced Concepts of Human
countries where most of the resources are already known and developed." Development

This definition draws a vivid distinction between the economic

development and economic growth. The first term relates to the problems
of underdeveloped countries and their solution, whereas the second term is
related to the problems of developed countries of the world.
Prof. A. Maddison, "the rising of income levels is generally called
economic growth in rich countries and in poor countries it is called
economic development."
This definition also points out the same fact that economic development is
concerned with the rising of income level in underdeveloped countries like
India, whereas economic growth refers to the rising of income levels in
advanced and rich countries like America, U. K., France, Germany etc.
Prof. J. A. Schumpeter, "Development is a discontinuous and spontaneous
change in the stationary state, which forever alters and displaces the
equilibrium state previously existing; while growth is a gradual and steady
change in the long run, which comes about by a general increase in the
rate of savings and population .
This explanation emphasizes that the economy is in the stationary state
before the process of development starts and in that stationary state,
equilibrium exists among the different development variables such as
investment and savings, income and expenditure, demand and supply etc.
The view of Schumpeter has been widely accepted and elaborated by the
majority of economists.
C. P. Kidleberger, "Economic growth means more output and economic
development implies both more output and changes in the technical and
institutional arrangements, by which it is produced."
This explanation states that growth is synonymous with higher output.
Any increase in the quantity of development variables is termed as growth.
It has nothing to do with the means and methods of production.
Development, on the other hand, implies not only higher output, but also
the changes which help in raising the level of output. Kindleberger has
further explained the difference by an analogy with human beings.
According to him, "Growth involves focussing on height or weight while
development draws attention to the change in functional capacity."
Prof. J. K. Mehta has summed up the above discussion in the words, "The
word Growth has quantitative significance while the Development has by
comparison qualitative significance."
Byrns and Stones, "Economic growth occurs when more goods can be
produced. Economic development entails improvements in the quality of
life, in the qualities of goods available or in the ways production is
organised."

5
Economics of Human Dr. Bright Singh, "Economic development is a multi-dimensional
Development phenomenon, it involves not only increase in money incomes, but also
improvement in real habits, education, public health, greater leisure and in
fact all the social and economic circumstances that make Tor a fuller and
happier life. On the contrary, in case of economic growth, there is increase
in national income alone. There is no structural change in the economy."
The distinction between economic development and economic growth
may further be explained by means of the table given below:

Table No. 1.1

Difference between Economic Development and Economic Growth

Sr. Basis of Economic Economic Growth

No. Difference Development

1. Utilization Economic Development Economic Growth

relates to the utilization relates to optimum
and development of unused utilization and
resources in the development of under
underdeveloped countries. utilized resources of
developed countries

2. Implication progressive changes in output of goods and

socio-economic structure services in the country
of country (institutional like increase the
and technological changes) income in savings,
investment etc.

3. Concerned Development relates to Growth relates to

with underdeveloped countries. developed countries.

4. Effect Brings both qualitative and Brings quantitative

quantitative changes in the changes in the
economy. economy.

5. Prof. A. The rising of income levels The rising of income

Maddison’s is generally called levels is generally
View economic growth in rich called economic
countries. development in poor
countries.

6. Nature and According to Schumpeter, According to

Cause of "Economic development is Schumpeter,
change discontinuous and "Economic Growth is
spontaneous state in the a gradual and steady
stationary state. change in the long
run."

6
 Concepts of Human
7. More output According to According to Development
and changes Kindleberger, economic Kindleberger,
economic growth
Development implies more means more output.
output and changes in the
technical and institutional
arrangements.

1.3 PERSPECTIVES ON DEVELOPMENT

1.3.1 Introduction:
Various academic disciplines have been drawn to the concept of
development. The term 'development' is frequently used
interchangeably and is closely linked to concepts such as
growth, blossoming, progress, extension, expansion, change,
transformation, and so on. In the postwar period, development studies
emerged as a distinct field of study, and they were linked to a growing
concern for the post-colonial world's political and economic
development. In this regard, The United Nations Development
Programme's Human Development Report stated: "The basic goal of
human development is to broaden people's choices in order to make
development more democratic and participatory." Access to income and
employment opportunities, education and health, and a clean and safe
physical environment should all be among these options. Individuals
should also be able to fully participate in community decisions
and exercise their human, economic, and political rights." Thus,
development studies is a broad term that refers to the progression of an
individual or a society through various stages of human
civilization. The Liberal and Marxist perspectives on development
have been highlighted as below-
The concept of development is inextricably linked to the concept of social
change. Since the dawn of human civilization, social change has been a
constant feature of life in every society. As a result, development is a
collection of practises, some of which appear to be at odds with one
another, that necessitate the general transformation and destruction of the
natural environment and social relations in order for the society to
reproduce. Its goal is to increase the production of commodities (goods
and services) that are geared to effective demand through exchange.
These various implications associated with the concept of development
provide us with various dimensions and perspectives from which we can
gain a better understanding of the subject. In this unit, The concept of
development is inextricably linked to the concept of social change. Since
the dawn of human civilization, social change has been a constant feature
of life in every society. As a result, development is a collection of
practices, some of which appear to be at odds with one another, that
necessitate the general transformation and destruction of the natural
environment and social relations in order for the society to reproduce. Its
7
Economics of Human goal is to increase the production of commodities (goods and services)that
Development are geared to effective demand through exchange. These various
implications associated with the concept of development provide us with
various dimensions and perspectives from which we can gain a better
understanding of the subject. Under this point, we'll look at two
different approaches to development: the liberal and Marxist
perspectives. The liberal perspective takes a liberal approach to
the development process. Liberalism advocates for the state and
other regulatory bodies to play a smaller role in economic
affairs. Liberalism believes in open and free market competition
and how it leads to economic development, based on the principle of the"
self-regulating market. The Marxist view of development, on the other
hand, considers development to be a process in which the superior
class exploits the economically inferior class. The Marxian concept
of development examines the role of class and production relations in the
development process. This unit delves into these development
perspectives in depth.

1.3.2 Liberal perspective of development :

After the period of enlightenment or renaissance in Europe in the late 18th
century, liberalism became an ideology. As a result of the Renaissance
providing a strong foundation on which to build new political and
economic ideologies, liberalism emerged as a new ideology in the
developmental paradigm. The term 'liberal' refers to a rational, free-
thinking approach that avoids coercion. Individual rights to life,
liberty, and property are central to liberalism. Initially, the
liberal perspective on development was completely opposed to
government involvement and strongly believed in the laissez-faire
or "self-regulated market" principle. The laissez-faire doctrine
supports the idea of economic liberalism, which states that if the natural
forces of the economy work independently, they will produce an effective
result that benefits both society and individuals. One of the most
prominent proponents of the laissez-faire doctrine was prominent
economist Adam Smith. He made two arguments in support of this
economic doctrine:
(a) Economic liberty allows for the full and free operation of the
mechanism in a competitive-market economy, ensuring maximum
aggregate wealth.
(b) As a result of their belief in the laissez-faire principle, some liberals
place a higher value on individually self-regulated markets free of
government intervention. They argue that the government should
not intervene in private individuals' economic activities because it
will disrupt the automatic process that maximizes aggregate
economic welfare. Some liberals, on the other hand, were opposed to
complete individual liberty and advocated for some state intervention.
They believed that men should strive for not only individual happiness,
but also happiness that reflects society's overall happiness. It means that
the ultimate goal is to ensure the happiness of all members of society, not
8
just a select few. Furthermore, they believe that if the liberty of some Concepts of Human
people is harmful to others, it should be regulated. A society made up Development
entirely of completely free people will not be perfectly happy. Individuals'
completely free actions may be harmful to others, and thus have a higher
chance of reducing others' welfare. Internal conflicts and clashes are very
common in an unregulated society. That is why some liberals believe
laissez-faire is a general rule of practical necessity rather than a
natural law with universal application. When discussing the role of the
government, J.S Mill, a prominent economist and libertarian, distinguished
between authoritative and non-authoritative state interference. The
term "authoritative interference" refers to "controlling individuals' free
agency." It entails preventing people from doing certain things or doing
whatever they want without permission. Non-authoritative
intervention, on the other hand, refers to giving advice,
disseminating information, or establishing state agencies without
interfering with people's freedom of choice. Classical liberalism, based on
the laissez-faire principle, reappeared in the 1980s, in the postwar period,
in the form of neoliberalism, or the liberalization or globalization of
production, distribution, and consumption arrangements. Markets in
neo liberal market capitalism are highly competitive, decentralized,
and open. The state's involvement and planning should be kept to
a minimum, and the owners' returns should be maximized. When
Margaret Thatcher became Prime Minister of the United Kingdom in
1979, she began to revolutionize the way the government and
the economy should be run, ushering in the concept of
neoliberalism into the developmental paradigm.

Critical evaluation of Liberal perspective of development :

Various scholars have criticized the liberal development perspective for a
variety of reasons. Too much individuality, critics argue, will promote
inequality and call into question the balance of social justice. In a free
market environment, it has been argued that an economic order marked by
inequality would promote even more inequality and social injustice.
Critics argue that there is no such thing as a "free market" as liberals
advocate. Liberals have always been opposed to the government
intervening heavily in the market. However, critics argue that the
government should play a larger role and intervene in the market by
regulating international trade, encouraging various migration
policies, and passing various factory and workplace legislation.
Rich people, in comparison to poor people, benefit more from the liberal
approach. The wealthy are becoming wealthier, but the poor have no such
assurance. In the market, the poor have no options. Wealth is unequally
distributed, and the system encourages the rich to get richer while the poor
get poorer. According to various critics, while promoting "possessive
individualism," liberalism is promoting and helping only one segment of
society.

9
Economics of Human 1.3.3 Marxist perspective of development :
Development
The Marxist perspective on development is based on Karl
Marx's theoretical understanding of development. He was the most
influential socialist thinker on the developmental paradigm in the 19th and
20th centuries, having been born in Germany in 1818. Marx claimed
that the 'history of all previously existing societies is the history of
class struggle,' and that a continuous flow of conflict between groups was
the hallmark of all histories. Because the mode of production is the
foundation of human history, it is materialistic. Marx divided human
history into the stages below, based on the mode of production that each
society employs:
(a) The communitarian mode of production gives way to primitive
communism;
(b) The slave mode of production gives way to Ancient society's growth.
(c) Feudalism is a result of the feudal mode of production.
(d) Capitalism is the result of a capitalist mode of production.
(e) Socialism is born from the socialist mode of production.
As a result, the transition from primitive communism to socialism is the
result of a shift in the mode of production. To put it another way,
economic transformation gives way to social transformation, bringing
humanity's history from Primitive Communism to Socialism. As a result,
Marx had a profound philosophical vision of human society's development
that can be understood in terms of material conditions of existence. He
talked about how human society evolved through various stages and
how class relationships changed as a result. A social class, according to
Karl Marx, is any group of people who perform the same function in the
production system. It is determined not by an individual's occupation or
income, but by the position he or she holds and the function he or she
performs in the production process. The powerful class always exploits the
inferior class in the production process in order to make a profit. Human
history is replete with examples of these processes, in which the powerful
class profits from the inferior class through dominance and exploitation.
In the Marxian sense, Bendix and Lip set have identified five variables
that determine a class:
(a) Dissensions between the classes over the distribution of economic
rewards.
(b) Ease of communication between individuals in the same class position,
allowing ideas and action plans to spread quickly.
(c) A rise in class consciousness, defined as a sense of solidarity among
members of the class and an understanding of their historical role.
(d) The lower class's deep dissatisfaction with its inability to exert control
over the economic structure in which it perceives itself to be the
exploited victim.
10
(e) The formation of a political organization as a result of the economic Concepts of Human
structure, historical circumstances, and the maturation of class Development
consciousness.
There have been specific forms of class struggle at all stages of the
society's economic transformation that have been mentioned. According to
Karl Marx, the main agents of social change are social classes. According
to him, new classes emerge in modern capitalist society, with a new type
of struggle between the bourgeoisie (haves) and the proletariat (have-
nots). Through the expansion of new markets, the introduction of new
technology, the extraction of surplus value, and the exploitation of the
proletariat, the Bourgeoisie class constantly maximizes its profit. The
commodification of the market gives the production and consumption
processes a new shape. The new market motto is to make as much money
as possible at any cost. As a result of the emergence of class
consciousness, class relations between both classes will be transformed
into hostile actions against each other. During the development
of subjective class consciousness, the 'class-in-itself' will be transformed
into a 'class-for-itself.' As a result, open revolutions between the
bourgeoisie and the proletariat will emerge. In the form of Socialism and
Communism, the proletariat will triumph over the bourgeoisie and
establish an equalitarian and egalitarian society.
Critical Evaluation of Marxist perspective of development :
Various scholars have criticised Marxist development theory. It is argued
that Marxist development theory focuses too much on economic aspects of
social life. It downplays the importance of culture and ethnicity in
explaining social change during development. Many of Marx's
predictions about the future development of capitalist society, particularly
the relationship and struggle between the bourgeoisie and the
proletariat, have not come true. As his concept of communism and the
dream of a classless society has been used as a political tool in many
cases, Marx's theory of a classless society has become a kind of utopian
dream. Marx's unilateral assumption about development, that it can
only be achieved through the exploitation of the classes, is not
universally true. In today's society, there are a variety of capitalisms that
have been overlooked by Marx's concept of development. Apart from
these flaws, the Marxian concept of development has failed to account for
the advancement of new technological inputs as well as the
changing nature of the employer-employee relationship.

1.4 QUESTIONS
Q1. What is the meaning of growth and development? Distinguish
between growth and development.
Q2. Critically analyze the Marxist perspective of development.
Q2. Critically analyze the Liberal perspective of development.


11
 2
APPROACHES OF HUMAN
DEVELOPMENT AND MDGS
Unit Structure:
2.0 Objectives
2.1 Definition of Human Development
2.2 Basic Needs Approach
2.3 Quality of Life Approach
2.4 Capability Approach
2.5 Human Rights
2.6 Millennium Development Goals (MDGs)
2.7 Summary
2.8 Questions

2.0 OBJECTIVES
 To study the various approaches of human development.
 To know about millennium development goads (MDGs).
 To know about human rights.

2.1 DEFINITION OF HUMAN DEVELOPMENT

The UNDP Human Development Report 1997 describes human
development as “the process of widening people’s choices and the level of
well-being they achieve are at the core of the notion of human
development. Such theories are neither finite nor static. But regardless of
the level of development, the three essential choices for people are to lead
a long and healthy life, to acquire knowledge and to have access to the
resources needed for a decent standard of living. Human development
does not end there, however. Other choices highly valued by many people,
range from political, economic and social freedom to opportunities for
being creative and productive and enjoying self respect and guaranteed
human rights”. The HDR 1997 further stated that, “Income clearly is only
one option that people would like to have though an important one. But it
is not the sum total of their lives. Income is only a means with human
development the end”.
What we understand from the description of human development found in
HDR 1997 is that human development is a continuous process. The
12
process becomes developmental only if it increases choices and improves Approaches of Human
human well-being. Amongst other choices, the three most important Development And MDGs
choices are that of long and healthy life which is determined by life
expectancy at birth, to acquire knowledge which is determined by
education and a decent standard of living which is determined by GDP per
capita. These three choices are also the components of human
development index. While these three choices are basic to human
development, the choices go beyond these three to include the ever
expanding social, political and economic freedoms that make human life
worth living. Thus guaranteed human rights become an important aspect
of human development.
According to Paul Streeton, human development is necessary due to the
following reasons:
1. Economic growth is only a means to the end of achieving human
development.
2. Investments in education, health and training will increase longevity
and productivity of the labor force and thereby improve human
development.
3. Female education and development widens choices for women’s
development. Reduced infant mortality rate reduces fertility rate and
also reduces the size of the family. It further improves female health
and helps to reduce the rate of growth of population.
4. Encroachment upon the natural environment is the result of growing
size of impoverished populations. Problems of desertification,
deforestation, and soil erosion, erosion of natural beauty, unpleasant
habitats and surroundings will reduce with human development.
5. Poverty reduction will encourage people to satisfy higher order needs
like esteem needs and the need for self- actualization.Thus human
development can contribute to a better civil society, a credible
democracy and social stability and political stability.

2.2 BASIC NEEDS APPROACH

The basic needs approach is one of the major approaches to the
measurement of absolute poverty in developing countries globally. It
works to define the absolute minimum resources necessary for long-term
physical well-being, usually in terms of consumption goods. The poverty
line is then defined as the amount of income required to satisfy the needs
of the people. The "basic needs" approach was introduced by the
International Labour Organization's World Employment Conference in
1976. "Perhaps the high point of the WEP was the World Employment
Conference of 1976, which proposed the satisfaction of basic human needs
as the overriding objective of national and international development
policy. The basic needs approach to development was endorsed by
governments and workers' and employers' organizations from all over the
world. It influenced the programmes and policies of major multilateral and
13
Economics of Human bilateral development agencies, and was the precursor to the human
Development development approach."
A traditional list of immediate "basic needs" is food (including water),
shelter and clothing. Many modern lists emphasize the minimum level of
consumption of "basic needs" of not just food, water, clothing and shelter,
but also transportation (as proposed in the Third talk of Livelihood section
of Three Principles of the People) sanitation, education, and healthcare.
Different agencies use different lists.
The basic needs approach has been described as consumption-oriented,
giving the impression "that poverty elimination is all too easy." Amartya
Sen focused on 'capabilities' rather than consumption.
In the development discourse, the basic needs model focuses on the
measurement of what is believed to be an eradicable level of poverty.
Development programs following the basic needs approach do not invest
in economically productive activities that will help a society carry its own
weight in the future, rather they focus on ensuring each household meets
its basic needs even if economic growth must be sacrificed today. These
programs focus more on subsistence than fairness. Nevertheless, in terms
of "measurement", the basic needs or absolute approach is important. The
1995 world summit on social development in Copenhagen had, as one of
its principal declarations that all nations of the world should develop
measures of both absolute and relative poverty and should gear national
policies to "eradicate absolute poverty by a target date specified by each
country in its national context."

2.3 QUALITY OF LIFE APPROACH

The term “quality of life” is extremely complex; it is affected by a number
of factors, and in the literature is interpreted in different ways. It should be
noted that the history of the term itself depends on the work of economists
and sociologists including John Kenneth Galbraith, Denisa Riesman and
Ronald Freedman, who were associated with the criticism of the consumer
lifestyle in the USA. They criticized the orientation of American society
on consumption and its emphasis on the quantity of produced and
consumed goods negatively affects quality of life. Moreover, in such a
lifestyle they saw wasted resources and a danger to humanity.
Quality of life should not be confused with the concept of standard of
living, which is based primarily on income. Standard indicators of the
quality of life include not only wealth and employment but also the built
environment, physical and mental health, education, recreation and leisure
time, and social belonging (Gregery, Derek, et al., eds, 2009).
According to ecological economist Robert Costanza, while Quality of Life
(QOL) has long been an explicit or implicit policy goal, adequate
definition and measurement have been elusive. Diverse “objective” and
“subjective” indicators across a range of disciplines and scales, and recent
work on subjective well-being (SWB) surveys and the psychology of
happiness have spurred renewed interest (Costanza, R. et al., 2008).

14
MEASURING QUALITY OF LIFE Approaches of Human
Development And MDGs
1. Quantitative Measurement:
Unlike per capita GDP or standard of living, both of which can be
measured in financial terms, it is harder to make objective or long-term
measurements of the quality of life experienced by nations or other groups
of people. Researchers have begun in recent times to distinguish two
aspects of personal well-being: Emotional well-being, in which
respondents are asked about the quality of their everyday emotional
experiences-the frequency and intensity of their experiences of, for
example, joy, stress, sadness, anger, and affection— and life evaluation, in
which respondents are asked to think about their life in general and
evaluate it against a scale. Such and other systems and scales of
measurement have been in use for some time. Research has attempted to
examine the relationship between quality of life and productivity.
2. Human Development Index :
Perhaps the most commonly used international measure of development is
the Human Development Index (HDI), which combines measures of life
expectancy, education, and standard of living, in an attempt to quantify the
options available to individuals within a given society. The HDI is used by
the United Nations Development Programme in their Human
Development Report.
3. World Happiness Report :
Also developed by the United Nations and published recently along with
the HDI, this report combines both objective and subjective measures to
rank countries by happiness, which is deemed as the ultimate outcome of a
high quality of life. It uses surveys from Gallup, real GDP per capita,
healthy life expectancy, having someone to count on, and perceived
freedom to make life choices, freedom from corruption, and generosity to
derive the final score.
4. Physical Quality of Life Index (PQLI) :
The Physical Quality of Life Index (PQLI) is a measure developed by
sociologist Morris David Morris in the 1970s, based on basic literacy,
infant mortality, and life expectancy. Although not as complex as other
measures, and now essentially replaced by the Human Development
Index, the PQLI is notable for Morris’s attempt to show a “less fatalistic
pessimistic picture” by focusing on three areas where global quality of
life was generally improving at the time, and ignoring gross national
product and other possible indicators that were not improving.
5. The Happy Planet Index :
Happy Planet Index, introduced in 2006, is unique among quality of life
measures in that, in addition to standard determinants of well-being, it
uses each country’s ecological footprint as an indicator. As a result,
European and North American nations do not dominate this measure.
The 2012 list is instead topped by Costa Rica, Vietnam and Colombia.

15
Economics of Human A 2010 study by two Princeton University professors looked at 1,000
Development randomly selected U.S. residents over an extended period. It concludes
that their life evaluations - that is, their considered evaluations of their
life against a stated scale of one to ten - rise steadily with income. On the
other hand, their reported quality of emotional daily experiences (their
reported experiences of joy, affection, stress, sadness, or anger) levels
after a certain income level (approximately $75,000 per year); income
above $75,000 does not lead to more experiences of happiness or to
further relief of unhappiness or stress. Below this income level,
respondents reported decreasing happiness and increasing sadness and
stress, implying the pain of life’s misfortunes, including disease, divorce
and being alone, are exacerbated by poverty. (PhysOrg.com. 7 September
2010)

6. Gross National Happiness :

Gross national happiness and other subjective measures of happiness are
being used by the governments of Bhutan and the United Kingdom. The
World Happiness report, issued by Columbia University is a meta-analysis
of happiness globally and provides an overview of countries and
grassroots activists using GNH. The OECD issued a guide for the use of
subjective well-being metrics in 2013. In the U.S., cities and communities
are using a GNH metric at a grassroots level.

7. The Social Progress Index :

The Social Progress Index measures the extent to which countries provide
for the social and environmental needs of their citizens. Fifty-two
indicators in the areas of basic human needs, foundations of wellbeing,
and opportunity show the relative performance of nations. The index uses
outcome measures when there is sufficient data available or the closest
possible proxies.

2.4 CAPABILITY APPROACH

The capability approach (also referred to as the capabilities approach) is a
normative approach to human welfare that concentrates on the actual
capability of persons to achieve lives they value rather than solely having
a right or freedom to do so. It was conceived in the 1980s as an alternative
approach to welfare economics. In this approach, Amartya Sen and Martha
Nussbaum combine a range of ideas that were previously excluded from
(or inadequately formulated in) traditional approaches to welfare
economics. The core focus of the capability approach is improving access
to the tools people use to live a fulfilling life.
Assessing capability
Sen initially argued for five components to assess capability:
1. The importance of real freedoms in the assessment of a person's
advantage

16
2. Individual differences in the ability to transform resources into Approaches of Human
valuable activities Development And MDGs

3. The multi-variate nature of activities giving rise to wellbeing

4. A balance of materialistic and nonmaterialistic factors in evaluating
human welfare
5. Concern for the distribution of opportunities within society
Subsequently, in collaboration with political philosopher Martha
Nussbaum, development economist Sudhir Anand and economic
theorist James Foster, Sen has helped propel the capabilities approach to
appear as a paradigm policy in debates concerning human development;
his research inspired the creation of the UN's Human Development
Index (a popular measure of human development that captures capabilities
in health, education, and income). Additionally, the approach has been
operationalized to have a high income country focus by Paul Anand and
colleagues. Sen also founded the Human Development and Capability
Association in 2004 in order to further promote discussion, education, and
research on the human development and capability approach. Since then,
the approach has been much discussed by political theorists, philosophers,
and a range of social scientists, including those with a particular interest in
human health.
The approach emphasizes functional capabilities ("substantive freedoms",
such as the ability to live to old age, engage in economic transactions, or
participate in political activities); these are construed in terms of the
substantive freedoms people have reason to value, instead
of utility (happiness, desire-fulfillment or choice) or access to resources
(income, commodities, assets). An approach to wellbeing using utility can
be found in utilitarianism, while access to resources is advocated by
the Rawlsian approach.
Poverty is understood as capability-deprivation. It is noteworthy that
proponents emphasize not only how humans function, but their access to
capabilities "to achieve outcomes that they value and have reason to
value".Everyone could be deprived of capabilities in many ways, e.g. by
ignorance, government oppression, lack of financial resources, or false
consciousness.
This approach to human well-being emphasizes the importance of freedom
of choice, individual heterogeneity and the multi-dimensional nature
of welfare. In significant respects, the approach is consistent with the
handling of choice within conventional microeconomics consumer theory,
although its conceptual foundations enable it to acknowledge the existence
of claims, like rights, which normatively dominate utility-based claims
(see Sen 1979).

2.5 HUMAN RIGHTS

Development is a human right that belongs to everyone, individually and
collectively. Everyone is “entitled to participate in, contribute to, and
enjoy economic, social, cultural and political development, in which all
17
Economics of Human human rights and fundamental freedoms can be fully realized,” states the
Development groundbreaking UN Declaration on the Right to Development,
proclaimed in 1986.
The key elements of the right to development are as follows:
 People-centered development. The Declaration identifies “the human
person” as the central subject, participant and beneficiary of
development (art. 2).
 A human rights-based approach. The Declaration requires that
development be carried out in a manner “in which all human rights and
fundamental freedoms can be fully realised” (art. 1).
 Participation. The Declaration insists on the “active, free and
meaningful participation” of individuals and populations in
development (art. 2).
 Equity. The Declaration highlights the importance of the “fair
distribution of the benefits” of development (art. 2).
 Non-discrimination. The Declaration allows no “distinction as to
race, sex, language or religion” (art. 6).
 Self-determination. The Declaration requires the full realisation of
the right of peoples to self-determination, including full sovereignty
over their natural wealth and resources (art. 1).

2.6 MILLENNIUM DEVELOPMENT GOALS (MDGS)

The Millennium Development Goals (MDGs) which include eight goals
were framed to address the world's major development challenges with
health and its related areas as the prime focus. In India, considerable
progress has been made in the field of basic universal education, gender
equality in education, and global economic growth. However there is slow
progress in the improvement of health indicators related to mortality,
morbidity, and various environmental factors contributing to poor health
conditions. Even though the government has implemented a wide array of
programs, policies, and various schemes to combat these health
challenges, further intensification of efforts and redesigning of outreach
strategies is needed to give momentum to the progress toward
achievement of the MDGs.
The MDGs adopted by the United Nations in the year 2000 project the
efforts of the international community to “spare no effort to free our
fellow men, women and children from the abject and dehumanizing
conditions of extreme poverty.” The MDGs are eight goals to be achieved
by 2015 that respond to the world's main development challenges. These
goals are further subdivided into 18 numerical targets which are further
measured by means of 40 quantifiable indicators. Health constitutes the
prime focus of the MDGs. While three out of eight goals are directly
related to health, the other goals are related to factors which have a
18
significant influence on health. Hence the goals and targets are inter- Approaches of Human
related in many ways. The eight MDG goals are to – Development And MDGs

(1) eradicate extreme poverty and hunger;

(2) achieve universal basic education;
(3) promote gender equality and empower women;
(4) reduce child mortality;
(5) improve maternal health;
(6) combat HIV/AIDS, malaria, and other diseases;
(7) ensure environmental sustainability;
(8) develop a global partnership for development

INITIATIVE BY INDIAN GOVERNMENT TOWARDS MDGS :

“Acute poverty prevails in eight Indian states, including Bihar, Uttar
Pradesh and West Bengal, together accounting for more poor people than
in the 26 poorest African nations combined, a new ‘multidimensional’
measure of global poverty has said. As per the new measure
Multidimensional Poverty Index (MPI – was developed and applied by the
Oxford Poverty and Human Development Initiative with UNDP support),
there are more ‘MPI poor’ people in eight Indian states (421 million in
Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar
Pradesh, and West Bengal) than in the 26 poorest African countries
combined (410 million)”.
The states like Bihar, Chhattisgarh, Uttar Pradesh, Rajasthan, Orissa, and
Madhya Pradesh are among the most populous in the country, and have
very low GDP. Growing rate of population within these states will account
for an even larger share of India’s population in 2015. Therefore, India’s
attainment of MDGs will also largely depend on the performance of these
states.
The Millennium Development Goals under the Millennium Declaration
are not like other documents or plans which remain on paper only. These
set out measurable targets instead of the usual hazy statements or
agreements.
Goal 1: To achieve the goal of eradicating extreme poverty and hunger,
India must reduce the proportion of people below poverty line from nearly
37.5% (in 1990) to about 18.75% by 2015.
Goal 2: To achieve universal primary education, India should increase the
primary school enrolment rate to 100 % with decreasing number of
students and completely wipe out the drop-outs by 2015 against 41.96% in
1991-92.
Goal 3: To ensure gender parity in education, India will have to promote
female participation at all levels to reach a female male proportion of
equal level by 2015.
19
Economics of Human Goal 4: It aims at reducing ‘under five mortality rate (U5MR)’ from 125
Development deaths per thousand live births in 1988-92 to 42 in 2015.
Goal-5: India should reduce maternal mortality (MMR) from 437 deaths
per 100,000 live births in 1991 to 109 by 2015.
Goal-6: Under this goal, though India has a low prevalence of HIV among
pregnant women as compared to other developing countries, yet the
prevalence rate has increased from 0.74 per thousand pregnant women in
2002 to 0.86 in 2003. This increasing trend needs to be reversed to achieve
MDG 6.
Goal-7: The proportion of population without sustainable access to safe
drinking water and sanitation is to be halved by 2015 and India is on track
to achieve this target.
Goal-8: Develop global partnership for development. (It includes financial
support from developed countries. For example Official Development
Assistance – ODA, etc.)
2.7 SUMMARY
The Government of India has adopted ambitious targets related to
Millennium Development Goals such as education – ‘Sarva Shiksha
Abhiyan‘ (the national policy to universalize primary education and
making free and compulsory Education to the Children of 6-14 years age
group), Health – the National Rural Health Mission along with Integrated
Child Development Services. To achieve the MDGs, India needs to
convert these commitments and resources into measurable results.
The Government of India claims that the country is on track to meet the
MDG targets by 2015. These claims include; number of people living
below the poverty line has reduced, child and maternal mortality rates are
reducing, increased public resources in several key sectors, Mahatma
Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has
increased rural employment, National Rural Health Mission have resulted
in massive inputs in the health sector, HIV rates are low and that deaths
due to tuberculosis and malaria show downward trends.
2.8 QUESTIONS
Q1. Explain the Basic Needs Approach.
Q2. Discuss the Quality of Life Approach.
Q3. Explain the Capability Approach.
Q4. Write a note on Millennium Development Goals (MDGs).




20
 MODULE II

3
HUMAN DEVELOPMENT – I
Unit Structure :
3.0 Objectives
3.1 Introduction
3.2 Empowerment and Equity
3.2.1 Empowerment
3.2.2 Equity
3.3 Sustainability and Security
3.3.1 Sustainability
3.3.2 Security
3.4 Productivity and Participation
3.4.1 Productivity
3.4.2 Participation
3.5 Role of freedoms in Promoting Human Development
3.6 Multi-dimensionality of Poverty
3.7 Summary
3.8 Questions

3.0 OBJECTIVES
 To study the various aspects related to human development such as
Empowerment, Equity, Sustainability, Security, Productivity and
Participation.

 To study the role of freedoms in human development and Multi-

dimensionality of Poverty

3.1 INTRODUCTION
The term ‘human development’ may be defined as an expansion of human
capabilities, a widening of choices, ‘an enhancement of freedom, and a
fulfilment of human rights. At the beginning, the notion of human
development incorporates the need for income expansion. However,

21
Economics of Human income growth should consider expansion of human capabilities. Hence
Development development cannot be equated solely to income expansion.
Income is not the sum-total of human life. As income growth is essential,
so are health, education, physical environment, and freedom. Human
development should embrace human rights, socio-eco-politico freedoms.
Based on the notion of human development, Human Development Index
(HDI) is constructed. It serves as a more humane measure of development
than a strictly Income-based benchmark of per capita GNP.
The first UNDP Human Development Report published in 1990 stated
that: “The basic objective of development is to create an enabling
environment for people to enjoy long, healthy and creative lives.” It
also defined human development as “a process of enlarging people’s
choices”, “and strengthen human capabilities” in a way which enables
them to lead longer, healthier and fuller lives.From this broad definition of
human development, one gets an idea of three critical issues involved in
human development interpretation. These are: to lead a long and healthy
life, to be educated, and to enjoy a decent standard of living. Barring these
three crucial parameters of human development as a process enlarging
people’s choices, there are additional choices that include political
freedoms, other guaranteed human rights, and various ingredients of self-
respect.
One may conclude that the absence of these essential choices debars or
blocks many other opportunities that people should have in widening their
choices. Human development is thus a process of widening people’s
choices as well as raising the level of well-being achieved.What emerges
from the above discussion is that economic growth measured in terms of
per capita GNP focuses only on one choice that is income. On the other
hand, the notion of human development embraces the widening of all
human choiceswhether economic, social, cultural or political. One may,
however, contest GDP/GNP as a useful measure of development since
income growth enables persons in expanding their range of choices.
This argument is, however, faulty. Most importantly, human choices go
far beyond income expansion. There are so many choices that are not
dependent on income. Thus, human development covers all aspects of
development. Hence it is a holistic concept. “Economic growth, as such
becomes only a subset of human development paradigm.”

3.2 EMPOWERMENT AND EQUITY

3.2.1 Empowerment :
Empowerment means to have the power to make choices. Such power
comes from increasing freedom and capability. Good governance and
people-oriented policies are required to empower people. The
empowerment of socially and economically disadvantaged groups is of
special importance.

22
The empowerment of people particularly women is another component of Human Development – I
human development. In other words, genuine human development requires
empowerment in all aspects of life. Empowerment implies a political
democracy in which people themselves make the decisions about their
lives. Under it, people enjoy greater political and civil liberties and remain
free from excessive controls and regulations. Empowerment refers to
decentralisation of power so that the benefits of governance are reaped by
all peoples.
It focuses on grassroots participation which promotes democracy by
enfranchising the disadvantaged groups. Unfortunately, benefits are
cornered by the elites because of lack of empowerment of people.
Participation as a goal is a feature of ‘bottom-up’ development strategy
rather than ‘top-down’. Further, development policies and strategies male-
dominated. But the benefits of development are to be made ‘gender-
sensitive’.
Discrimination against women in health and education is very costly from
the viewpoint of achieving development goals. Education of women can
lead to a virtuous circle of lower fertility, better care of children, more
educational opportunity, and higher productivity. Above all, as women’s
education rises, women’s independence in making their own choices also
increase.
Anyway, decentralization and participation empower people, especially
the women and the poor. It then breaks the ‘deprivation trap’. Mahbub ul
Haq asserts: “If people can exercise their choices in the political, social
and economic spheres, there is a good prospect that growth will be
strong, democratic, participatory and durable.”
Women’s economic empowerment includes women’s ability to participate
equally in existing markets; their access to and control over productive
resources, access to decent work, control over their own time, lives and
bodies; and increased voice, agency and meaningful participation in
economic decision-making at all levels from the household to international
institutions. Women’s economic empowerment boosts productivity,
increases economic diversification and income equality in addition to
other positive development outcomes. For example, increasing the female
employment rates in OECD countries to match that of Sweden, could
boost GDP by over USD 6 trillion.

3.2.2 Equity :
Equity refers to making equal access to opportunities available to
everybody. The opportunities available to people must be equal
irrespective of their gender, race, income and in the Indian case, caste. Yet
this is very often not the case and happens in almost every society.For
example, in any country, it is interesting to see which group the most of
the school dropouts belong to. This should then lead to an understanding
of the reasons for such behaviour. In India, a large number of women and
persons belonging to socially and economically backward groups drop out

23
Economics of Human of school. This shows how the choices of these groups get limited by not
Development having access to knowledge.
If development is viewed in terms of enhancing people’s basic
capabilities, people must enjoy equitable access to opportunities. Such
may be called equality-related capabilities. To ensure equality-related
capabilities or access to opportunities what is essential is that the societal
institutional structure needs to be more favourable or progressive.
In other words, the unfavourable initial asset distribution, like land, can be
made more farmer-friendly through land reform and other redistributive
measures. In addition, uneven income distribution may be addressed
through various tax-expenditure policies. Economic or legislative-
measures that interferes with market exchange may enable people to
enlarge their capabilities and, hence, well-being.
Further, to ensure basic equality, political opportunities need to be more
equal. In the absence of effective political organisation, disadvantaged
groups are exploited by the ‘rich’ to further their own interests rather than
social goals. However, participatory politics gets a beating by the
inequality in opportunities in having basic education.
It is to be added here that basic education serves as a catalyst of social
change. Once the access to such opportunity is opened up in an equitable
way, women or religious minorities or ethnic minorities would be able to
remove socioeconomic obstacles of development. This then surely brings
about a change in power relations and makes society more equitable.
Equality of capabilities would be equitable. But the distribution of
capabilities typically cannot be observed, because it is concerned with
substantive freedoms rather than outcomes. Rather, the extent to which
societies are inequitable must be inferred on the basis of inequalities in
outcomes, and consideration of the process by which they come about. As
argued in the HDR 2011, “Inequalities in outcomes are largely the product
of unequal access to capabilities”. If people within a society had equal
capabilities, we would not necessarily expect equal outcomes because
people have different preferences and values. But we could be confident
that those outcomes arose because of differences in people’s choices rather
than constraints on their abilities to exercise their choice.

3.3 SUSTAINABILITY AND SECURITY

3.3.1 Sustainability :
Sustainability means continuity in the availability of opportunities. To
have sustainable human development, each generation must have the same
opportunities. All environmental, financial and human resources must be
used keeping in mind the future. Misuse of any of these resources will lead
to fewer opportunities for future generations.
A good example is about the importance of sending girls to school. If a
community does not stress the importance of sending its girl children to
24
school, many opportunities will be lost to these young women when they Human Development – I
grow up. Their career choices will be severely curtailed and this would
affect other aspects of their lives. So, each generation must ensure the
availability of choices and opportunities to its future generations.
The concept of sustainable development focuses on the need to maintain
the long-term protective capacity of the biosphere. This then suggests that
growth cannot go on indefinitely; there are, of course, ‘limits to growth.’
Here we assume that environment is an essential factor of production. In
1987, the Brundtland Commission Report (named after the then Prime
Minister Go Harlem Brundtland of Norway) defined sustainable
development as ‘… development that meets the needs of the present
without compromising the ability of future generations to meet their basic
needs.’ This means that the term sustainability focuses on the desired
balance between future economic growth and environ-mental quality. To
attain the goal of sustainable development, what is of great importance is
the attainment of the goal of both intra- generation and inter-generation
equality.
This kind of inequality includes the term ‘social well-being’ not only for
the present generation but also for the people who will be on the earth in
the future. Any kind of environmental decline is tantamount to violation of
distributive justice of the disadvantaged peoples. Social well-being thus,
then, depends on environ-mental equality.

3.3.2 Security :
Security is originated from the word secure and opposite of fear, it means
being or feeling secure and free from fear, anxiety, danger, doubt, etc.
Something that gives or assures safety, tranquility, certainty, etc. Also, the
meaning of security is a kind of being safe against forced aggression,
regarding the persons; it means that people don’t have any fear about their
legitimate rights and having freedom. No force can threat him when his
rights to be endangered. In fact, traditional meaning of security, is stated a
general interpretation, being free from any threat, or danger, on the other
hand, others believe that security has a fluid meaning and different
meanings in time and place.
Security prepares conditions for protecting vital values and obtaining the
feeling of freedom from vulnerability and dangers. Therefore, it is the
most serious issues and brings some concerns to human minds. Because
security has a complicated nature and feature and the governments are
custodians of security and on a collective consensus. Security is
considered as the most long-lasting desires of mankind. Apart from
different definitions that mentioned about security there are several kinds
of security as follow: physical, spiritual, internal, external, individual,
social, national, humanistic, disciplinary, moral and defensive security.
Now, we discuss about defensive security and sustainable development in
south east of Iran which are more important. Security is a social action that
occurs on the political, social and economic issues.

25
Economics of Human Human security is removal of poverty and deprivation, having a suitable
Development level of life and to guarantee the basic rights of humans. Human security is
the ability to protect humans, governments, both of them. So, it consists of
providing main and basic needs of humans as well as non-physical aspects
that shapes qualitative aspect of the issue that human security has two
qualitative and quantitative aspects. Quantitative aspect consists of
satisfying physical needs, i.e., supplying the least human security involves
satisfying basic physical needs, the most important of which are food,
home, education, and public health that are necessary for maintaining
human generation. Qualitative aspect of human security relates to his
human personality that entails individual independency, the right to
determine the destiny and free participation in social life. In fact, human
security directs humans to democracy and the opportunity of participation
in social decision making in a dynamic and fundamental manner.
Therefore, human security has a relationship with democracy. Geographer
states that thinking about human security should be beyond geographical
boundaries and military matters, thinking about human security is an
imperative issue, we must think about winning of a different war, and
fighting against on poverty.

3.4 PRODUCTIVITY AND PARTICIPATION

3.4.1 Productivity :
Productivity is another component of human development which requires
investment in people. This is commonly called investment in human
capital. Investment in human capital in addition to physical capital can add
more productivity.
Productivity here means human labour productivity or productivity in
terms of human work. Such productivity must be constantly enriched by
building capabilities in people. Ultimately, it is people who are the real
wealth of nations. Therefore, efforts to increase their knowledge, or
provide better health facilities ultimately leads to better work efficiency.
The improvement in the quality of human resources raises the productivity
of existing resources. Theodore W. Schultz the Nobel Prize-winning
economist articulated its importance: “The decisive factors of production
in improving the welfare of poor people are not space, energy, and crop
land; the decisive factor is the improvement in population
quality.” Empirical evidence from many East Asian countries corroborates
this view.

3.4.2 Participation :
Participation is vital in societal development. It gives people a sense of
ownership in their lives. It also renders development projects and practices
both effective and accountable. To the extent that it has such significance,
it is subject not only to being used loosely but also to being misused by
accident, or deliberately, or in both ways.

26
Participation does not automatically deliver positive effects. Within an Human Development – I
existing societal power structure, it might maintain an unwarrantable
status quo or even possibly reinforce it. While the most powerful people
enhance their power by making the best of their current status, the
vulnerable maintain their status at best by observing social customs for
good or ill. Tax avoidance is, for example, instanced as a sign of adaptive
preference in the societies where it prevails. People might understand the
reasons for paying taxes but will nevertheless avoid paying them, in order
to survive in a corrupt society.
A naive application of participation would thus not only be ineffective, it
would also be harmful. Empowerment would certainly help the vulnerable
to improve their living conditions, but often only as a temporary measure.
Unless the existing power structure is overturned, the vulnerable will
continue to exist even if group membership changes over time. Yet, it
would be unrealistic to expect that all inequalities in the power structure
can be eliminated.

3.5 ROLE OF FREEDOMS IN PROMOTING HUMAN

DEVELOPMENT
Development can be seen, it is argued here, as a process of expandingthe
real freedoms that people enjoy. Focusing on human freedomscontrasts
with narrower views of development, such as identifyingdevelopment with
the growth of gross national product, or with therise in personal incomes,
or with industrialization, or with technologicaladvance, or with social
modernization. Growth of GNP or ofindividual incomes can, of course, be
very important as means toexpanding the freedoms enjoyed by the
members of the society. Butfreedoms depend also on other determinants,
such as social and economicarrangements (for example, facilities for
education and healthcare) as well as political and civil rights (for example,
the libertyto participate in public discussion and scrutiny). Similarly,
industrializationor technological progress or social modernization
cansubstantially contribute to expanding human freedom, but
freedomdepends on other influences as well. If freedom is what
developmentadvances, then there is a major argument for concentrating
onthat overarching objective, rather than on some particular means,
orsome specially chosen list of instruments. Viewing development interms
of expanding substantive freedoms directs attention to the endsthat make
development important, rather than merely to some of themeans that, inter
alia, play a prominent part in the process.
Development requires the removal of major sources of unfreedom:poverty
as well as tyranny, poor economic opportunities as wellas systematic
social deprivation, neglect of public facilities as well asintolerance or
overactivity of repressive states. Despite unprecedentedincreases in overall
opulence, the contemporary world denies elementary freedoms to vast
numbers-perhaps even the majority of people. Sometimes the lack of
substantive freedoms relates directly to economic poverty, which robs
people of the freedom to satisfy hunger, or to achieve sufficient nutrition,
or to obtain remedies for treatable illnesses, or the opportunity to be
27
Economics of Human adequately clothed or sheltered, or to enjoy clean water or sanitary
Development facilities. In other cases, the unfreedom links closely to the lack of public
facilities and social care, such as the absence of epidemiological programs,
or of organized arrangements for health care or educational facilities, or of
effective institutions for the maintenance of local peace and order. In still
other cases, the violation of freedom results directly from a denial of
political and civil liberties by authoritarian regimes and from imposed
restrictions on the freedom to participate in the social, political and
economic life of the community.
 EFFECTIVENESS AND INTERCONNECTIONS
Freedom is central to the process of development for two distinct reasons.
1) The evaluative reason: assessment of progress has to be done primarily
in terms of whether the freedoms that people have are enhanced;
2) The effectiveness reason: achievement of development is thoroughly
dependent on the free agency of people.
We have already signalled the first motivation: the evaluative reason for
concentrating on freedom. In pursuing the second, that of effectiveness,
we have to look at the relevant empirical connections, in particular at the
mutually reinforcing connections between freedoms of different kinds. It
is because of these interconnections, which are explored in some detail in
this book, that free and sustainable agency emerges as a major engine of
development. Not only is free agency itself a "constitutive" part of
development, it also contributes to the strengthening of free agencies of
other kinds. The empirical connections that are extensively explored in
this study link the two aspects of the idea of "development as freedom."
The relation between individual freedom and the achievement of social
development goes well beyond the constitutive connection important as it
is. What people can positively achieve is influenced by economic
opportunities, political liberties, social powers, and the enabling
conditions of good health, basic education, and the encouragement and
cultivation of initiatives. The institutional arrangements for these
opportunities are also influenced by the exercise of people's freedoms,
through the liberty to participate in social choice and inthe making of
public decisions that impel the progress of these opportunities. These
interconnections are also investigated here.
1. Transactions, Markets and Economic Unfreedom :
The ability of the market mechanism to contribute to high economic
growth and to overall economic progress has been widely-and rightly-
acknowledged in the contemporary development literature. But it would
be a mistake to understand the place of the market mechanism only in
derivative terms. As AdamSmith noted, freedom of exchange and
transaction is itself pan and parcel of the basic liberties that people have
reason to value. To be generically against markets would be almost as odd
as being generically against conversations between people (even though
some conversations are clearly foul and cause problems for others-or even
for the conversationalists themselves). The freedom to exchange words, or

28
goods, or gifts does not need defensive justification in terms of their Human Development – I
favourable but distant effects; they are part of the way human beings in
society Live and interact with each other (unless stopped by regulation or
fiat). The contribution of the market mechanism to economic growth is, of
course, important, but this comes only after the direct significance of the
freedom to interchange words, goods, gifts-has been acknowledged.
As it happens, the rejection of the freedom to participate in the labour
market is one of the ways of keeping people in bondage and captivity, and
the battle against the unfreedom of bound labour is important in many
third world countries today for some of the same reasons the American
Civil War was momentous. The freedom to enter markets can itself be a
significant contribution to development, quite aside from whatever the
market mechanism may or may not do to promote economic growth or
industrialization. In fact, the praise of capitalism by Karl Marx (not a great
admirer of capitalism in general) and his characterization (in Das Kapital)
of the American Civil War as "the one great event of contemporary
history" related directly to the importance of the freedom of labour
contract as opposed to slavery and the enforced exclusion from the labour
market. As will be discussed, the crucial challenges of development in
many developing countries today include the need for the freeing of labour
from explicit or implicit bondage that denies access to the open labour
market. Similarly, the denial of access to product markets is often among
the deprivations from which many small cultivators and struggling
producers suffer under traditional arrangements and restrictions. The
freedom to participate in economic interchange has a basic role in social
living.
To point to this often-neglected consideration is not to deny the
importance of judging the market mechanism comprehensively in terms of
all its roles and effects, including those in generating economicgrowth
and, under many circumstances, even economic equity.We must also
examine, on the other side, the persistence of deprivationsamong segments
of the community that happen to remainexcluded from the benefits of the
market-oriented society, and thegeneral judgments, including criticisms,
that people mayhave of lifestylesand values associated with the culture of
markets. In seeingdevelopment as freedom, the arguments on different
sides have to beappropriately considered and assessed. It is hard to think
that anyprocess of substantial development can do without very
extensiveuse of markets, but that does not preclude the role of social
support,public regulation, or statecraft when they can enrich-rather
thanimpoverish-human lives. The approach used here provides a
broaderand more inclusive perspective on markets than is frequently
invokedin either defending or chastising the market mechanism. Economic
unfreedom canbreed social unfreedom, just as social or political
unfreedom can alsofoster economic unfreedom.
2. Institutions And Instrumental Freedoms:
Five distinct types of freedom, seen in an "instrumental" perspective, are
particularly investigated in the empirical studies that follow. These include
(1) political freedoms, (2) economic facilities, (3) social opportunities, (4)
29
Economics of Human transparency guarantees and (5) protective security. Each of these distinct
Development types of rights and opportunities helps to advance the general capability of
a person. They may also serve to complement each other. Public policy to
foster human capabilities and substantive freedoms in general can work
through the promotion of these distinct but interrelated instrumental
freedoms. Each of these different types of freedomand the institutions
involved-will be explored, and their interconnections discussed.
There will be an opportunity also to investigate their respective roles in the
promotion of overall freedoms of people to lead the kind of lives they
have reason to value. In the view of "development as freedom," the
instrumental freedoms link with each other and with the ends of
enhancement of human freedom in general. While development analysis
must, on the one hand, be concerned with objectives and aims that make
these instrumental freedoms consequentially important, it must also take
note of the empirical linkages that tie the distinct types of freedom
together, strengthening their joint importance. Indeed, these connections
are central to a fuller understanding of the instrumental role of freedom.
Freedoms are not only the primary ends of development; they are also
among itsprincipal means. Inaddition to acknowledging, foundationally,
the evaluative importance offreedom, we also have to understand the
remarkable empirical connection that links freedoms of different kinds
with one another. Political freedoms (in the form of free speech and
elections) help to promote economic security. Socialopportunities (in the
form of education and health facilities) economic participation is
welcomed. Economic facilities(in the form of opportunitiesfor
participation in trade and production) can help to generatepersonal
abundance as well as public resources for social facilities.Freedoms of
different kinds can with another one another.These empirical connections
reinforce the valuational priorities.In terms of the medieval distinction
between "the patient" and "theagent," this freedom-cantered understanding
of economics and of theprocess of development is very much an agent-
oriented view. Withadequate social opportunities, individuals can
effectively shape theirown destiny and help each other. They need not be
seen primarily asfree and sustainable agency-and even of constructive
impatience.
3.6 MULTI-DIMENSIONALITY OF POVERTY
The measurement of poverty is composed of two fundamental steps,
according to Amartya Sen (1976): determining who is poor (identification)
and building an index to reflect the extent of poverty (aggregation). Both
steps have been sources of debate over time among academics and
practitioners. For a long time, unidimensional measures were used to
distinguish poor from non-poor. More recently, new measures have been
proposed to enrich the understanding of socio-economic conditions and to
better reflect the evolving concept of poverty.
 Poverty- unidimensional to multi-dimensional
Poverty measurement has primarily used income for the identification of
the poor since the early twentieth century. In the 1950s, economic growth
30
and macroeconomic policies dominated the development discourse, which Human Development – I
meant little attention was paid to the difficulties faced by poor people
(ODI, 1978). Until the 1970s, the poor were statistically identified solely
on the basis of household income, adjusted to family size, relative to a
specified income poverty line. This threshold meant to give a monetary
value to the “minimum necessaries for the maintenance of merely physical
efficiency” (i.e., food, rent, clothing, fuel, light, etc.) (Rowntree (1901),
cited by Alkire et al. (2015)).
In the mid-1970s the ‘basic needs’ approach posited that development
concerns should be focused on providing people their basic needs, as
opposed to merely increasing their income. This approach, together with
others such as social exclusionand Sen’s capability approach, called for
looking at the actual satisfaction of basic needs (Alkire et al. 2015). As
such, a list of basic needs should be determined, along with minimum
levels of satisfaction, what Sen (1981) called the ‘direct method’ of
poverty identification. Contrasting with the income method, the direct
methodassesses human deprivation in terms of shortfalls from minimum
levels of basic needs per se, instead of using income as an intermediary of
basic needs satisfaction. The reasoning for this relies on the argument that,
while an increase in purchasing power allows the poor to better achieve
their basic needs, markets for all basic needs may not always exist. Indeed,
several basic needs are public goods (malaria prevention for example;
Tsui, 2002). And, in fact, since the 1980s, studies have shown that income
does not correctly proxy non-monetary deprivations for identifying the
poor.
Accordingly, empirical analysts have come to introduce various
nonmonetary measures of deprivations, supplementing these
multidimensional analyses with monetary measures to create a better
overall picture of poverty.

 Multidimensional Poverty Measurement :

Several techniques to measure poverty from a multidimensional
perspective have been developed over the years. A few of the main
prevailing approaches, among many others include (Alkire et al. 2015):
i) The dashboard approach: an analysis of different indicators of poverty.
A prominent example of which is the Millennium Development Goals;
ii) The composite indices approach: whereby deprivation indices,
possibly considered in a dashboard approach, are converted into one
single number. Well-known composite indices include the Human
Development Index, the Gender Empowerment Index and the Human
Poverty Index, all of which have been published by the United Nations
Development Programme (UNDP) Human Development Report;
iii) Multivariate statistical methods: techniques to identify the poor, set
indicator weights, build individual deprivation scores, and aggregate
the information into societal poverty indices;

31
Economics of Human iv) Fuzzy sets: mathematical technique employed to identify
Development mathematically the poor (using fewer normative judgements);
Many criteria can be used to decide on a particular methodology.
Empirical researchers might prefer measures that can accommodate data
from different sources. Policymakers might be inclined to choose a
measure that produces one single easily comparable figure. They might
also prefer measures that can reveal which people are suffering which
deprivations simultaneously (a joint distribution of disadvantages) and
thus effectively identify the poor.
In the context of the direct method of poverty measurement, counting the
number of deprivations a poor individual suffers appeared intuitively as a
way to identify the poor and observe progress. This ‘counting approach’ is
currently witnessing fast-emerging research. While in the unidimensional
framework the task of identifying the poor is usually performed by means
of poverty lines, in a multidimensional counting framework “deprivation
cutoffs” pinpoint who is deprived in what dimensions, and an overall
“poverty cutoff” across dimensions identifies who is poor.

 Global Multidimensional Poverty Index :

One recently developed counting method, the Alkire-Foster counting
approach, was adopted by the UNDP in 2010. Assisted by the Oxford
Poverty and Human Development Initiative, UNDP used the approach to
develop the global Multidimensional Poverty Index (MPI), which
substituted its Human Poverty Index (in use since 1997). The index
complements monetary measures of poverty with information on
overlapping deprivations experienced simultaneously by individuals. It
identifies deprivations in the same three dimensions as the Human
Development Index (health, education and standard of living), and
presents the number of people who are multi-dimensionally poor (i.e.,
deprived in at least one third of the dimensions) as well as the number of
deprivations faced by the poor thus revealing the incidence and intensity
of poverty in a given region in a given time. It can be decomposed by
dimension or by groupings (such as region, ethnicity and other), with
useful implications for policy.
According to 2021 Global Multidimensional Poverty Index Report, 1.3
billion people across 109 countries live in acute multidimensional poverty.
Out of 1.3 billion people, 644 million are children (below the age of 18);
whereas 105 million people are old (above the age of 60). Nearly, 85
percent of multidimensionally poor people live in Saharan Africa or South
Asia. 84 percent of these poor people live in rural areas. 67 percent and
more of the total multidimensionally poor population, live in middle-
income countries. India’s rank is 66 out of 109 countries.

32
3.7 SUMMARY Human Development – I

 The term ‘human development’ may be defined as an expansion of

human capabilities, a widening of choices, ‘an enhancement of
freedom, and a fulfilment of human rights.

 Empowerment means to have the power to make choices. Such power

comes from increasing freedom and capability.

 Sustainability means continuity in the availability of opportunities. To

have sustainable human development, each generation must have the
same opportunities.

 Productivity is component of human development which requires

investment in people.
 Development can be seen, as a process of expanding the real freedoms
that people enjoy.
 One recently developed counting method, the Alkire-Foster counting
approach, was adopted by the UNDP in 2010.

3.8 QUESTIONS
1) What is Human Development?
2) Write a short note.
a. Empowerment
b. Equity
c. Sustainability
d. Security
e. Productivity
f. Participation
3) Discuss the role of Freedoms in Promoting Human Development.
4) Explain the concept of Multi-dimensionality of Poverty in detail.



33
 4
HUMAN DEVELOPMENT – II
Unit Structure :
4.0 Objectives
4.1 Introduction
4.2 Concept of Inclusive Growth
4.3 Role of Civil Society
4.4 NGO’s and People’s Organizations
4.5 Obstacles to Inclusive Growth
4.6 Impact of Globalization
4.7 Summary
4.8 Questions

4.0 OBJECTIVES
 To understand the Concept of and Obstacles to Inclusive Growth

 To study the Role of Civil Society, NGO’s and People’s Organizations

 To study the Impact of Globalization on Human Development

4.1 INTRODUCTION
The last two or three centuries have been characterized by a vigorous
economic growth in several countries, favoured by technological progress
and the accumulation of (physical and human) capital. At the same time,
some other countries have developed less and others are trapped in
situations of extreme poverty. The history of economic development
displays varied paths and non-linear phenomena with more or less rapid
growth associated with different degrees of inequality in the distribution of
wealth. However, despite the specificity of the different development
pathways, since the Industrial Revolution it has been possible to witness a
trend of economic growth mainly due to the diffusion of a capitalist-type
development.
Economic growth was earlier seen as an inclusive concept, automatically
supposed to be for all. But growth experience the world over has shown
otherwise. The poor, history has revealed, need to have a special mention
lest the rest of the country forgets them as it forges ahead on the growth
path.

34
In the words of P Chidambaram, “Growth, though fundamental for Human Development – II
reducing the level of poverty and improving living standards of our
people, is not enough by itself. It needs to be more inclusive, more
pervasive and accompanied by moderate inflation.” He quotes Dipak
Dasgupta, lead economist with the World Bank, as saying that there are
two India’s. "While India's top students at the best educational institutions
are setting global standards, many, if not most of the country's children,
leave government primary schools with few basic skills. While we have
"Medical tourism" from abroad, most primary health centres do not
function well. While the Tata’s and Mittal’s are acquiring global
companies, our villages lack most of the basic amenities. While the price
of urban property is escalating, the level of stunting and under-nutrition
amongst the poor is alarming".
The IDP Review 2006 titled "Inclusive Growth and Service Delivery:
Building on India's Success" brought the term Inclusive growth into
prominence.
`Inclusive Growth’ has thus emerged as a concept in Economics. This is
reflected in India’s Eleventh Five-Year Plan (2007 – 2012) had the theme
'towards faster and more inclusive growth'.
The Approach to the12th Five Year Plan (GOI, Planning Commission, Oct
2011) was titled: "Faster, Sustainable and More Inclusive Growth”.

4.2 CONCEPT OF INCLUSIVE GROWTH

The term “inclusive growth” has been coined by Montek Singh Ahluwalia,
Chairman of the Planning Commission of India.
The concept of Inclusive growth emphasizes that equitable opportunities
for economic participants should be provided during the very process of
economic growth with benefits being incurred by every section of society.
It is distinct from the concept of Equity, Social Justice or Redistribution
taking place in terms of policy measures taken after the Growth process.
In this sense it is a radical concept. In Economics, the three activities of
Production, Consumption and Distribution have traditionally been treated
as distinct activities or processes. Growth and Development are related
with Production whereas Equity and Social Justice are associated with
Distribution. But the Inclusive Growth concept puts these two together. It
refers to productive activity bound up with distributive activity.
The IDP Review 2006 described Inclusive growth in terms of facing India
today:
improving the delivery of core public services, & maintaining rapid
growth while spreading the benefits of this growth more widely.
According to it, encouraging inclusive growth includes revamping labor
regulations, improving agricultural technology & infrastructure, helping
lagging sections & regions catch up, & empowering the poor through

35
Economics of Human proactive policies that help them to take part in the market on fair and
Development equitable terms.
Thus, inclusive growth implies the links between the macroeconomic &
microeconomic determinants of the economy to have changes in economic
aggregates as well as structural transformation.

4.3 ROLE OF CIVIL SOCIETY

4.3.1 Concept and Definition:
Development is one of the most important pillars of country’s
development. So, it is important that development is examining.
Economic, political, cultural and comprehensive development needs
comprehensive planning. In comprehensive development, based on
observed experience countries with the largest coordination to the
community bodies, civil society have been successful. Because civil
society is direct supervisory power of the people on the rulers and
authority’s performance and gain their power by people’s integration and
movement. That is why the civil society moved toward organizing and
distribution. Guilds, parties, media, trade unions and any group of people
who are engaged in giving service, turned in to intervening group in
government’s performance and decisions. So that if decision is harmful,
they do something like: demonstration, strike and which are civil activities
and express their demands avoid conflict and remain on their positions as
far as being convinced. This process is more powerful than controlling the
different sings such as: parliamentary oversight, inspection organizations
and involve society to the participation in political and social affairs.

In countries were the position of people and civil society have been
respected in the constitution in the framework of maintaining the legal
freedoms and people’s fundamental rights, the rate of development and
reducing corruption is more obvious than the countries where constitution
hasn’t been respected. This guarantees one of the most basic foundations
of development.

Some people consider the civil society as a presence of people out of

private sphere means their home and entering to the community and its
functions. Some people believes that, a set of civil society is included
active presence of people in different communities in society which
impact the society any way. Some people consider civil society as public
institutions and organizations trade union etc., that each of human includes
a number of individuals in the general population and have a corporate,
political, social and cultural aspects of the society.

Another definition of civil society, consists of people who makes groups

and associations based on their will and chose and independent of the
government and purpose of establishment of such groups is improving the
favorites and interests of the members (civil society, GhasemKarbasian).
Eighteen century can be considered as an important period in the event of
democratic governments and civil society. In this period universality of

36
human rights was presented which moved into the realm of civility at the Human Development – II
same time with French revolution and concept of citizenship (rights and
responsibilities associated with it) was particularly important.

4.3.2 Formation of Civil Society

In the second half of eighteen century was made in civil society and
government which was customary at that time and civil society was
introduced as an independent sphere from government and was erupted in
“Tom Piene” – “Adam Smith” (1723 -1790) and “Adam Fergusson” –
“John Lock” (1635-1704) and a new concept in detail of civil society was
described by: Hegel (1770 -1831). The concept of civil society was
revived by: “Anthonio Gramsci” in the early twentieth century while it
was superseded in the second half of nineteenth century and in 70s and
80s as well as developments of Central and Eastern Europe, a new life was
breathed into the concept of civil society and it was emerged as a reaction
against “totalitarianism” especially socialist totalitarian regimes. “Thomas
Hobbes” (1588-1679) and “Karl Marks (1818-1883) can be noted as the
other experts who have commented about social society.

4.3.3 Civil Society- Development and Influence

As it is proposed in development, in the past development was considered
unidimensional with a look on economy, politics and culture but today it is
considered as an all-round thing. Close relationship and proximity among
countries and cultures and moving toward globalization, the impact of a
country’s lack of development becomes more obvious and more visible on
the other countries. If development consider with assumption of growth in
economy, which is included increased per-capita income and GDP and
make policies such as: pluralism, tolerance of, freedom of expression,
culture of development and consolidation of cultural principles and
opening the cultural atmosphere in cinema, music, writing by posing this
question that: if the practical ways of the countries which have been
achieved to these assumptions can be repeated? The answer is no but most
of these ways are applicable in any country provided that some changes
are made in accordance with cultural, social, economic and political
conditions of those countries. When the development of civil society in
any country is depended on that country’s law and constitution, allowance
of civil society’s entrance (involvement) and applying for optimizing the
executive procedures and planning by that needs stabilize and
development of civil society. Out of these preconditions, supposing that
the conditions are prepare for civil society activities. What is the impact of
this supposing in development as a result of relying on public opinion and
abdication of power to those who are state’s symbols judiciary power- on
behalf of society, a two pronged approach is acceptable that means on one
hand society gives enough authority to the executive forces in order to
enforce the laws which are legislated in accordance to public demands,
advance the country and all-round development and on the other hand,
executive power relying on civil society, evaluate its deviance and its
performance which are conflict with public demand and reform it in favor
of public demand.

37
Economics of Human In this stage, civil society plays its very important role and prevent from
Development deviating and challenging the interests of the society and puts it on the
truck. Civil society is receptive the representative of its nation public and
correct by lateral and multilateral talks and settle the problems through
rational way and aside obstacles the developments in every field.

4.4 NGO’S AND PEOPLE’S ORGANIZATIONS

4.4.1 Introduction:
NGO is an organization of a group of individuals who volunteer their
services for achievement of the society’s larger goal, in the interest of the
general public. It is not under control of any governmental body and is a
non-profit venture for improving the welfare of citizens. NGOs act as a
middleman between the society and the government, assessing the needs
of individuals. They do command respect at the global level as it seeks
assistance in not only the financial sector, but also in the vast field of
economic, social and the political structure.
4.4.2 Brief History of NGOs Around the Globe:
At the end of World War II, the term “non-governmental organization”
was coined by the United Nation and henceforth its concept was
popularised. But the roots are far deeper as even before the onset of WW
II, there were voluntary groups working at a global level for the
betterment of citizens like the Sufi Tariqahs, Catholic Orders, and other
such religious and scientific societies. Even as late as the 13th century,
Chinese affiliates worked for humanitarian purposes along the river.

During the 18th century, Friends of Truth was established to work towards
more ‘universal goals’ in France that had affiliates all around Europe. To
fight small pox and eradicate it, Royal Jennerian Society was created that
discovered new ways of vaccination. Glancing at the developments that
occurred during the 19th century, there were umpteen number of anti-
slavery groups working towards relief measures.

4.4.3 An Origin of NGOs in India:

The term NGO gained currency much later in the country but the idea
around which its concept revolves has been followed and is in practise
past many centuries. India is a land of religion wherein people deeply
believe in their karma and ethical notions. Good deeds follow noble results
and helps building a supportive community.

Dating back to the 18th and 19th century when people become more
organised, wanted to work in a systematized manner and hence got into
groups which offered voluntary help to the sufferers. As it is rightly said
by Mother Teresa “Charity isn’t about pity, it is about love.” NGOs came
together to abolish the deeply rooted system of Sati that was rampant at
those times and worked towards abolishing untouchability, casteism and
other social evils like child marriage etc.

38
By the 20th century, many people started associating themselves with Human Development – II
NGOs like ‘Servant of India’ which worked on Gandhian principles.
Later, NGOs found place in India’s five-year plans, working for the rural
sector, the down trodden, towards eradicating illiteracy and fighting
deadly diseases. In a developing country like India, international
regulatory bodies like WHO, UNICEF, UNO etc also come up and work
vociferously by spreading awareness.

4.4.4 Role of NGOs in Development :

1. Social development: NGOs have played an immense role in bringing
social change and development. NGOs ensure development which
essentially involves the equal participation of the people. They play an
important role in educating and motivating people to fight for their
rights.
2. Education: The NGOs actively work for promoting education,
particularly among weaker sections of the population. The education
of girls, and other deprived people, particularly the SCs and STs, has
been their target objective.
3. Women empowerment: Women are the other vulnerable section of
society. More and more women are working for their rights and
involving themselves actively in the social sphere. Important in this
process has been the role of NGOs. Sewa, Sathin, Eklavya, Disha etc.
are some of the thousands of NGOs known for their role in
development by creating awareness among people and interventions
regarding women.
4. Environmental awareness: Human life is facing a threat due to
environmental pollution and the depletion of natural resources. Here,
the role of NGOs work is noticeable and praiseworthy. Thousands of
voluntary organisations work to awaken people and governments
against environmental degradation and depletion of resources e.g.,
Vanashakti NGO.
5. Rehabilitation: The projects like the construction of dams, road
highways and railways have often led to displacement of some
sections of people, particularly in rural areas without being properly
compensated. The NGOs have a major role to play towards the cause
of people’s resettlement and are also performing commendable jobs in
this direction.
6. Protecting dignity: NGOs are also rendering great service in restoring
dignity of the deprived and discriminated sections. For example,
protecting dignity of women by protecting women suffering from
gender discrimination, racial and religious discriminations.
7. Human rights protection: The contribution of NGOs to human rights
and public awareness is significant in India. The recognition of the
rights of homosexuals and transgender people, for instance, would

39
Economics of Human have been unimaginable without the sustained effort of civil society
Development organisations.

4.4.5 Issue and challenges of NGOs :

1. Difficulties to get funds : The majority of NGOs have experienced
difficulties in getting enough, and continuous funding in order to do
their work. Getting donors is a hard task, and sometimes dealing with
some specific donor’s funding conditions can be an enormous
challenge for NGOs.

2. Over-regulations : Government regulations are misused to curb voice

and work of NGOs that impact vote bank of politicians. Politicians
threaten NGOs of removing funds or removing their certification.
Over-regulation of NGOs hinder their work and efficiency.

3. Cultural hurdles : NGOs are often seen as encroaching on centuries-

old tradition and culture of the people, and lead to mass protest at
times. Ban of Jallikattu after a Public interest litigation filed by PETA
is one such example.

4. Lack of proper networking : For some NGOs, it is difficult to

develop networks. Having a poor network lead to lack of
communication. Poor networks lead to loss of opportunity to work
with community and their participation and impact NGOs
effectiveness.

5. Lack of governance : Many NGOs do not have a Board for

governance. One of the main reasons for that is the difficulty to attract
board members without paying them or providing them some benefits.
Often lack of board leads to poor direction and inefficiencies in NGO
working.

4.4.6 Way forward:

1. Monitoring : There should be better coordination between Ministries
of Home Affairs and Finance in terms of monitoring and regulating
illicit and unaccounted funds. NGOs are vehicles of development
especially in rural areas.
2. Participation : Citizen’s today is keen to play an active role in
processes that shape their lives. It is important that their participation
in democracy go beyond the voting and should include promotion of
social justice, gender equity, inclusion etc. while working with NGOs.
3. Improving governance : Having a Board for governing NGO is one
of the best ways to achieve good levels of governance. Capacity
building and training can help to provide crucial new skills. NGOs can
more readily train staff and cultivate the necessary skills within the
organisation to address challenges going forward.

40
4. Funding : Maintaining a good relationship with partners will be Human Development – II
helpful in growing as an organisation. NGOs with assets can use any
surplus to help generate income. Renting out buildings, offering
training, providing consultancy, creating and selling products and
trading on their name.
5. Cultural awareness : NGO should try to know local cultures and
should work in harmony with the communities. They must make
people aware of any discriminatory community practices and work
with them, rather than going against the people.

4.5 OBSTACLES TO INCLUSIVE GROWTH

India has become the fastest growing among the big economies. However,
this high growth continues to bypass a large section of people. A large
majority of Indians living in the villages; women, children, backward
castes and classes and other minorities have been excluded from India's
growth story. Exclusion continued in terms of low agriculture growth, low
quality employment growth, low human development, rural-urban divides,
gender and social inequalities, and regional disparities etc. The sectoral,
social and spatial inequalities have raised questions about welfare
approaches of government planning, and emphasized the role of the
private sector in addressing development issues in the country.
Employment generation, social and developmental infrastructure, health-
care and rural diversification are some of the major concerns. Due to
faulty approaches and often politically motivated policies, growth has
generated inequalities. It is imperative for the planners and policy-makers
to make growth inclusive through adoption of pragmatic policies. The
journey towards balancing the outcome of economic growth involves
many challenges. The dominant challenges include the imperative of
maintaining the acceleration of economic growth without compromising
on human development and sustainability.
Inclusive growth has become the buzzword in policy-spheres with recent
phenomenon of rapid growth with characteristic patterns of exclusion. The
Government aimed at promoting ‘inclusive growth’ as it recognized that
high national income growth alone did not address the challenge of
employment promotion, poverty reduction and balanced regional
development or improving human development. Inclusive growth is
necessary for sustainable development and equitable distribution of wealth
and prosperity.
Achieving inclusive growth is the biggest challenge in a country like
India. In a democratic country like India, bringing the 70% people living
in rural India into the mainstream is the biggest concern. The challenge is
to take the levels of growth to all section of the society and to all parts of
the country. The best way to achieve inclusive growth is through
developing people's skills. According to former Prime Minister
Manmohan Singh, the key components of inclusive growth strategy
include a sharp increase in investment in rural areas, rural infrastructure
and agriculture, increase in credit for farmers, increase in rural
41
Economics of Human employment through a unique social safety net and a sharp increase in
Development public spending on education and health care.
For a developing country like India, the need for inclusive growth is vital
to achieve the overall progress of the country. Following are the major
concerns for developing countries like India to achieve the inclusive
growth:
1. Poverty: India is still having 30% of the population below the poverty
line (as per Rangrajan committee report). The poor people lack the
education and skills required to be employed in a formal job reducing
their productivity and wages.

2. Employment: The quality and quantity of employment in India is very

low due to illiteracy and due to over dependency on agricultural
employment. More than 90% of the labour is in the unorganized sector
where wages and productivity are very low with no social security
benefits. The generation of productive and formal employment for our
labour force, as employment is key to inclusive growth, is the toughest
task for the country.

3. Agriculture: 42% of the population is still dependent on agriculture

contributing just 15% of the GDP. Productivity and wages are very
low in agriculture sector as there is disguised unemployment. The
agriculture sector suffers with fragmented land holdings, declining
yield with more than 50% of the agricultural land dependent on
monsoon. Agriculture sector has remained excluded from the high
growth which the economy achieved after the reforms of 1991.

4. Social Development: Social development is one of the key concerns

in inclusive growth. Various problems in the social sector like low
level of public expenditure on health, poor quality of primary
educational institutions, significant gender disparities, malnutrition
among children etc. is making the path critical to inclusive growth in
the country.

5. Regional Disparities: Due to different levels of development in

agriculture and industrial sector across regions, some regions in India
developed fast and some areas are still facing scarcity for example per
capita income of Punjab is four times than of Bihar.
The increase in number of incidents such as theft, murder, naxalism is a
direct result of the economic exclusion and the unfulfilled aspirations of
the bottom billion. These aspirations of the bottom billion cannot be
wished away. If India is unable to address these aspirations, the
"demographic dividend" will become a demographic nightmare. This
mammoth task cannot be done by government alone. Industry and civil
society must partner with government to drive inclusive growth.
Cognizant of income disparities and growing aspirations of the people, the
government has been working to address these through programmes like

42
MGNREGA and Aadhar. Civil society has contributed with design and Human Development – II
governance oversight. But the greatest lever for driving inclusion is jobs.
While it is quite evident that inclusive growth is imperative for achieving
the equity objective, what is, perhaps, not so obvious is, why inclusive
growth is now considered essential even to sustain the growth momentum.
Majority of the population living in rural areas is often identified with the
agriculture sector. However, it is the unorganized non-farm sector that is
increasingly absorbing most of the labour force. This sector has huge
potential for growth once there is sufficient investment in infrastructure
ensuring linkage to markets and easier access to assets and skills. Infusion
of appropriate technology, skills, and easier access to credit, especially
start-up capital, apart from facilitating market development, can make this
segment an expanding base for self-sustaining employment and wealth
generation and also foster a culture of creative and competitive industry.
Entrepreneurial development has to be encouraged by having an enabling
competitive environment and easy availability of finance for newer
projects and enterprises. In Prof. C. K. Prahalad’s words, “If we stop
thinking of the poor as victims or as a burden, and start recognizing them
as resilient and creative entrepreneurs and value conscious consumers, a
whole world of opportunity will open up.”

4.6 IMPACT OF GLOBALIZATION

1. Sharing of Multiple Resources :
The most important contribution of globalization has been the sharing of
the multiple resources among various communities belonging to different
culture. Rapid technological growth has ensured more secure and
convenient life. The worldwide transmission of economic, social, political,
religious and cultural resources, mores and customs and knowledge has
been conducive to the globalized condition of contemporary existence.

2. Deterritorialization :
The deepening of the interconnectivity between the local and the global
has rendered the condition of the global society which implies the
dissolution of territorial boundaries, producing cultural diffusion.

3. Globalization and Media :

Media as a super-power emerges in the contemporary globalized world. In
the realm of high-speed information transmission, multiple media houses
arise to control the political and economic power centers. Thus, it becomes
a major mover of world economy, politics and culture.
4. Globalization and Popular Culture :
Globalization has erased the gap between ‘high’ and ‘low’ cultures as both
Rushdie and Coetzee are popular among the critics, intellectuals and also
the common mass. The books are now marketed and promoted worldwide
and thus they become bestsellers. The global market propagates the book
as a successful product of public consumption, thus redefining the notion
of popular culture. Globalization contributes in the proliferation of books-
43
Economics of Human both canonical and local. Local language books are getting translated in
Development various languages to cater to the multicultural reading public. Thus,
globalization works as a catalyst in the translation 10 studies. The
canonical works are also globalized in different cultural spaces. They are
reinterpreted and re-presented in the globalized world, thus gaining new
meanings, new readers and new life.

5. Disadvantages of Globalization :
Though a very fashionable phenomenon, globalization and its consequent
economic aspirations have created the space of hegemonic universalism
and ‘politics of polarization’. Commenting on the disadvantage of
globalization, Johnston, Taylor and Watts write, however unevenly, our
world is interconnected through a vortex of globalization. Polarization
could work as a sustainable system if the world were populated by rather
dim economic men and women. But it is not; it is full of human beings
with hopes and dreams and expectations. These will have to be
accommodated across the world to prevent a politics of polarization
destroying all. An interconnected world is an easily sabotaged world.
Terrorism, the politics of the weak, has followed an upward trend.

6. The Unemployment Factor :

Globalization, in its journey towards rapid economic expansion, has fueled
high competition and ruthless focus on efficiency and low-cost set-up
which propelled the unemployment factor among the relatively less
efficient workers, bringing in the politics of polarization.

7. Impact on Weaker Economies :

Capitalism, being the biggest ally of globalization, wreaks havoc on the
small-industries, institutions and rural economies which failed to compete
with the prowess of the multinational companies. Globalization is an
essentially urban and industrialized set-up which sidelined the traditional
economic institutions to form a globalized market system.

8. Impact on Family Life :

Behind the concept of the ‘Global Family’ of the ‘Global Village’ lies the
dark reality of the disintegrated family life. Speed is the keyword of
contemporary globalized life-style where each individual is engrossed in
the mad run of becoming the successful global citizen. The 11 family-
bonds are loosening as the Gen-Y family members are immigrating to the
foreign lands in search of work and affluence, subsequently creating a
multicultural existence. The enhanced communication due to
technological revolution has indeed succeeded to create a ‘hyperspace’
where the virtual bonds are maintained; but the physical attachment is
neglected in this globalized virtual world.

9. Lack of Individual Privacy :

The negation of distance is one of the dominant conditions of
globalization which has its dual impact on the individual lifestyle. The
idea of the ‘personal’ and the notion of the privacy are highly influenced
by the networked existence where the rapid social and cultural change and
44
the availability of the global products demand the internalization of Human Development – II
hyperspace reality beyond the world of physical attachments. The
enhanced communication on the other hand curtails the individual space
where the individual choice is constantly determined by the global forces.
This networked existence not only propels social mobilization but it also
has led to human trafficking, illicit business of drugs, fast transmission of
diseases, forceful immigration, terrorism and cultural uprooting.

4.7 SUMMARY
 The term “inclusive growth” has been coined by Montek Singh
Ahluwalia, Chairman of the Planning Commission of India.
 In comprehensive development, based on observed experience
countries with the largest coordination to the community bodies, civil
society have been successful.
 NGO is an organization of a group of individuals who volunteer their
services for achievement of the society’s larger goal, in the interest of
the general public.
 Achieving inclusive growth is the biggest challenge in a country like
India. In a democratic country like India, bringing the 70% people
living in rural India into the mainstream is the biggest concern.
 The worldwide transmission of economic, social, political, religious
and cultural resources, mores and customs and knowledge has been
conducive to the globalized condition of contemporary existence.

4.8 QUESTIONS
1. Define the concept of Inclusive Growth in detail.
2. What is the role of Civil Society in human development?
3. Make a brief note on NGO’s and People’s organization.
4. Discuss the obstacles to Inclusive Growth in detail.
5. Explain the impact of Globalization.



45
 MODULE III

5
MEASUREMENT OF HUMAN
DEVELOPMENT – I
Unit Structure:
5.0 Objectives
5.1 Need for Indices to measurement of human development.
5.2 Gross Domestic Product
5.3 Physical Quality of Life Index (PQLI)
5.4 Disability Adjusted Life Years (DALY)
5.5 Social Capability Index
5.6 Questions

5.0 OBJECTIVES
 To know the need for indices.
 To know about the various indices of measurement of human
development.

5.1 NEED FOR INDICES TO MEASUREMENT OF

HUMAN DEVELOPMENT
 An index number is a device for measuring changes in a variable ora
group of related variables.
 The index number of industrial activity enables us to study the
progress of industrialization in the country.
 These cost of living index numbers show changes in the prices of
goods generally consumed by people.
 Index number helps the Government to formulate its price policies.
 They are also used to evaluate the purchasing power of money.
 Index numbers are also being used for forecasting business and
economic activities, business cycles etc.

46
5.2 GROSS DOMESTIC PRODUCT Measurement of Human
Development – I
The Gross Domestic Product (GDP) is the total output of goods and
services for final use produced by an economy by both residents and non-
residents. It is equal to consumption plus gross capital formation plus
exports, fewer imports, and includes subsistence products produced by
households for their own use, valued at current local prices for comparable
commodities. The GDP is often divided by the population to express the
standard of living since it is a rough approximation of the amount of
wealth per person (there are issues of wealth distribution that are not well
reflected in GDP per capita figures).
The World Bank often uses GDP per capita to classify the level of
economic development of nations. The wealthiest nations account for the
largest markets in the world. The GDP is thus a reasonable approximation
of the size of a market, but not necessarily of the standards of living (or
quality of life). For instance, China has a much higher GDP than Korea,
implying that China is a bigger market, but Korea is a more sophisticated
economy with higher standards of living.
The Human Development Index (HDI) is a composite measure ranging
from 0 to 1 that includes life expectancy, education (literacy rate), and
standards of living (GDP per capita). It is more representative of the
commercial potential of countries with an HDI above 0.8, accounting for
the world’s leading markets. This commercial potential and dynamism
shape global transactions and flows.

5.3 PHYSICAL QUALITY OF LIFE INDEX (PQLI)

The Physical Quality of Life Index was the most serious challenge to GNP
per capita as the index of development. It was invented by M.D. Morris in
1979. He constructed a composite Physical Quality of Life Index (PQLI)
relating to 23 developing countries for a comparative study. He combined
three component indicators to measure performance in meeting the most
basic needs of the people.
These are:
1. Infant Mortality Rate
2. Life Expectancy at Age One
3. Basic Literacy Rate

This index represents a wide range of indicators such as health, education,

drinking water, nutrition and sanitation. The PQLI shows improvement in
the quality of life when people enjoy the fruits of economic progress with
increase in life expectancy (LE), fall in infant mortality rate (IMR) and
rise in basic literacy rate (BLR).
Each indicator of the three components is placed on a scale of zero to 100
where zero represents an absolutely defined worst performance and 100
represents an absolutely defined best performance. The PQLI index is

47
Economics of Human calculated by averaging the three indicators giving equal weight to each
Development and the index is also scaled from 0 to 100.
If the indicators of life expectancy and basic literacy rate are positive, the
best performance is shown as the maximum and the worst as the
minimum. Infant mortality rate being a negative indicator, for this the best
indicator is shown as the minimum and the worst as the maximum. To find
out the achievement level of the positive variable, its minimum value is
deducted from its actual value and the balance is divided by the difference
(range) between maximum value and minimum value i.e.

To find out the achievement level for a negative indicator, its actual value
is deducted from its maximum value and the balance is divided by the
difference (range) between maximum value and minimum value i.e.

For life expectancy and infant mortality rate, there is no natural maximum
and minimum value. But there is need to select the right values.
According to Morris, each of the three indicators measures results and not
inputs such as income. Each is sensitive to distribution effects. It means
that an improvement in these indicators signifies an increase in the
proportion of people benefiting from them. But none of the indicators
depends on any particular level of development. Each indicator lends itself
to international comparison.

Limitations :
The PQLI tries to measure “quality of life” directly rather than indirectly.
But it has its limitations.
1. Morris admits that PQLI is a limited measure of basic needs.
2. It supplements but does not supplant the GNP. It fails to dislodge GNP
from its lofty perch.
3. It does not explain the changing structure of economic and social
organization. It, therefore, does not measure economic development.
4. Similarly, it does not measure total welfare.
5. Morris has been criticized for using equal weights for the three
variables of his PQLI which undermine the value of the index in a
comparative analysis of different countries.
According to Meier, “Non-income factors captured by the PQLI are
important, but so are income and consumption statistics and distribution
sensitive methods of aggregation that are ignored by it.”

48
Conclusion : Measurement of Human
Development – I
Despite these limitations, the PQLI can be used to identify particular
regions of underdevelopment and groups of society suffering from the
neglect or failure of social policy. It points towards that indicator where
immediate action is required. The state can take up such policies which
increase the PQLI rapidly along with economic growth.

5.4 DISABILITY ADJUSTED LIFE YEARS (DALY)

5.4.1 Introduction:
A Disability Adjusted Life Year (DALY) is the sum of years of
potential life lost due to premature death and the years of productive
life lost due to disability compared to a standardised life expectancy.

 DALYs are used to measure the combined quantity and quality of

life of a population.

 The WHO website summarises the DALY thus: "One DALY can
be thought of as one lost year of 'healthy' life. The sum of these
DALYs across the population, or the burden of disease, can be
thought of as a measurement of the gap between the current health
status and an ideal health situation where the entire population
lives to an advanced age, free of disease and disability."

 i.e. one DALY is equivalent to the loss of a healthy life year.

5.4.2 Rationale:
Mortality does not give a complete picture of the burden of disease
borne by individuals in different populations. The overall burden of
disease is assessed using the disability-adjusted life year (DALY), a
time-based measure that combines years of life lost due to premature
mortality (YLLs) and years of life lost due to time lived in states of
less than full health, or years of healthy life lost due to disability
(YLDs). Using DALYs, the burden of diseases that cause premature
death but little disability (eg drowning or measles) can be compared to
that of diseases that do not cause death but do cause disability
eg stroke, eating disorders.

49
Economics of Human 5.4.3 Calculation of DALY :
Development
This measurement is a combination of two measurements (shown
below):
DALY = YLL + YLD
i.e. Disability Adjusted Life Year [DALY] is equal to the sum of the
Years of Life Lost [YLL] due to premature mortality in the population
and the Years Lost due to Disability [YLD} for people living with the
health condition.

Years of Life Lost (YLL) :

This consists of the number of deaths multiplied by the standard life
expectancy at the age at which death occurs.
 The formula for this is: YLL = N x L
 N = number of deaths and L = standard life expectancy at age of
death (in years)

Years Living with a Disability (YLD) :

There are two methods of calculating the YLD.
1. The number of cases, in a particular time period, multiplied by the
average duration of the disease combined with a weight factor which
represents the severity of the disease on a scale from 0 (perfect health)
to 1 (dead).
The formula is: YLD = I x DW x L
 I = number of incident cases
 DW = disability weight
 L - average duration of he case until remission or death (in years)
2. Known as the Prevalence YLD :
The formula is: YLD = P = DW
 P = number of prevalent cases
 DW = disability weight

5.4.4 Function and Uses of DALYs :

DALYs are used to indicate the impact of disease on a population.
They measure the difference between the current situation and an ideal
situation where everyone lives to the standard life expectancy and is in
perfect health. For this calculation, the standard life expectancy is set
at 80 years for men and 82.5 years for women.

50
 DALYs for a number of diseases can be added together to indicate Measurement of Human
the total burden of disease in a country. Development – I

 DALYs are a summary metric of population health. DALYs

represent a health gap; they measure the state of a population's
health compared to a normative goal. The goal is for individuals to
live the standard life expectancy in full health.

5.4.5 Advantages of DALYs :

1. The biggest advantage is that morbidity (YLD) and mortality
(YLL) effects are combined in one measure.
2. DALY allow the comparison between different health hazards.
3. The DALY measure offers the ability to assess the impact of
prevention strategies

5.4.6 Limitations of DALYs:

DALYs are based on baseline measurements from the wealthy
countries so it is likely that the differential found between developing
and developed population means that DALYs may not reflect the
differences in resources.
The disability weights used for YLD are based on subjective measures,
whereby the applied technique and the used panel (e.g. experts,
patients or lay-people) have a strong influence on the obtained
disability weights. There is an on-going debate over their validity. The
DALY measure is not widely recognized outside the health sector.

5.4.7 The biggest challenges of the DALY measure consist in:

1. Getting estimates of the total number of infections in the
population due to a particular pathogen.
2. When using the incidence and pathogen-based approach, defining
the outcome tree with all relevant health outcomes for a particular
pathogen.
3. Getting appropriated transmission probabilities for the different
health outcomes represented in the outcome tree.

5.5 SOCIAL CAPABILITY INDEX

The social capabilities of nations formed slowly in response to their forms
of economic and social organization. Social capabilities have been
persistent over long periods. Social capabilities in 1500 C.E. are good
predictors of income differences today, once colonial and postcolonial
migrations are accounted for. Social capabilities in 1500 C.E. are largely
explicable by differences in history of agrarian civilization. Since 1960,
less developed countries populated by descendants of earlier developed
societies have seen more rapid growth than others.

51
Economics of Human Some argue that capabilities are attributes of the individuals, not
Development collectives (firms, organizations or countries). Thus, individual
capabilities have been associated with the opportunities, or substantive
freedom, people have access to, which may be limited by the lack of
personal resources or the context in which people operate (Sen, 1993).
Thus, the individual inequalities in outcomes that we see every day are
associated with differences in substantive freedom, or the ability to do or
be in their lives, and therefore the presence or lack of these capabilities
may explain why inequalities arise. A similar logic may apply to
collectives, in particular countries. Countries aggregate individual
capabilities and resources, and therefore the social good, or positive
externalities arising from their interaction, are more than the sum of
individual units for our understanding of why modern growth happens and
persists. Here we seek to document a set of national characteristics in
developing countries that we can label as “social capabilities” and attempt
to relate them to actual economic outcomes. Adelman and Morrison
(1967) pioneered the effort of defining social capabilities as “the processes
of changes in attitudes and institutions associated with the breakdown of
traditional social organization” and quantifying them through factor
analysis. They summarized the many relationships among 41 social,
economic and political variables, such as urbanization, educational
attainment, mass communications, fertility rate, competitiveness of
political parties, rate of growth, technological adoption and social
mobility, among others. The main critique to the Adelman and Morrison
Index is that, although well-grounded in theory and multidimensional, it
was not easy to trace changes over time given the number of variables
involved.

5.8 QUESTIONS
Q1. Explain the Physical Quality of Life Index (PQLI).
Q2. Discuss the Disability Adjusted Life Years (DALY).
Q3. Write a note social capability.



52
 6
MEASUREMENT OF HUMAN
DEVELOPMENT – II
Unit Structure :
6.0 Objectives
6.1 Introduction
6.2 Human Development Index (HDI)
6.3 Human Poverty Index (HPI)
6.4 Gender Related Development Index (GDI)
6.5 Gender Empowerment Measure (GEM)
6.6 Summary
6.7 Questions

6.0 OBJECTIVES
 To study about the human development index.
 To study the human poverty index.
 To study the gender related development index.
 To study the gender empowerment measure.

6.1 INTRODUCTION
The UNDP Human Development Report 1997 describes human
development as “the process of widening people’s choices and the level of
well-being they achieve are at the core of the notion of human
development. Such theories are neither finite nor static. But regardless of
the level of development, the three essential choices for people are to lead
a long and healthy life, to acquire knowledge and to have access to the
resources needed for a decent standard of living. Human development
does not end there, however. Other choices highly valued by many people,
range from political, economic and social freedom to opportunities for
being creative and productive and enjoying self respect and guaranteed
human rights”. The HDR 1997 further stated that, “Income clearly is only
one option that people would like to have though an important one. But it
is not the sum total of their lives. Income is only a means with human
development the end”.
What we understand from the description of human development found in
HDR 1997 is that human development is a continuous process. The
53
Economics of Human process becomes developmental only if it increases choices and improves
Development human well-being. Amongst other choices, the three most important
choices are that of long and healthy life which is determined by life
expectancy at birth, to acquire knowledge which is determined by
education and a decent standard of living which is determined by GDP per
capita. These three choices are also the components of human
development index. While these three choices are basic to human
development, the choices go beyond these three to include the ever
expanding social, political and economic freedoms that make human life
worth living. Thus guaranteed human rights become an important aspect
of human development. According to Paul Streeton, human development
is necessary due to the following reasons:
1. Economic growth is only a means to the end of achieving human
development.
2. Investments in education, health and training will increase longevity
and productivity of the labor force and thereby improve human
development.
3. Female education and development widens choices for women’s
development. Reduced infant mortality rate reduces fertility rate and
also reduces the size of the family. It further improves female health
and helps to reduce the rate of growth of population.
4. Encroachment upon the natural environment is the result of growing
size of impoverished populations. Problems of desertification,
deforestation, and soil erosion, erosion of natural beauty, unpleasant
habitats and surroundings will reduce with human development.
5. Poverty reduction will encourage people to satisfy higher order needs
like esteem needs and the need for self- actualization. Thus human
development can contribute to a better civil society, a credible
democracy and social stability and political stability.

6.2 HUMAN DEVELOPMENT INDEX (HDI)

The HDI – human development index – is a summary composite index
that measures a country's average achievements in three basic aspects of
human development: health, knowledge, and a decent standard of living.
Health is measured by life expectancy at birth; knowledge is measured by
a combination of the adult literacy rate and the combined primary,
secondary, and tertiary gross enrolment ratio; and standard of living by
GDP per capita (PPP US$).
The Human Development Index (HDI) is a composite statistic used to
rank countries by level of "human development" and separate developed
(high development), developing (middle development), and under
developed (low development) countries. The statistic is composed from
data on life expectancy, education and per-capita GDP (as an indicator of
standard of living) collected at the national level using the formula given
in the Methodology section below.
54
The origins of the HDI are to be found in the United Nations Development Measurement of Human
Programme's (UNDP) Human Development Reports (HDRs). These were Development – II
devised and launched by Pakistani Economist Mahbub ulHaq in 1990 and
had the explicit purpose: ‗‗to shift the focus of development economics
from national income accounting to people centered policies‘‘. To produce
the HDRs, Mahbub ulHaq brought together a group of well known
development economists including: Paul Streeten, Frances Stewart,
Gustav Ranis, Keith Griffin, Sudhir Anand and Meghnad Desai. But it was
Amartya Sen‘s work on capabilities and functionings that provided the
underlying conceptual framework. Haq was sure that a simple composite
measure of human development was needed in order to convince the
public, academics, and policy-makers that they can and should evaluate
development not only by economic advances but also improvements in
human well-being. Sen initially opposed this idea, but he went on to help
Haq develop the Human Development Index (HDI). Sen was worried that
it was difficult to capture the full complexity of human capabilities in a
single index but Haq persuaded him that only a single number would shift
the attention of policy-makers from concentration on economic to human
well-being.
The HDI has been used since 1990 by the United Nations Development
Programme for its annual Human Development Reports.
Human Development Index measures achievements on average on the
basis of three following criteria. Areas which are of significance to human
development:

 Life expectancy at birth which measures the longevity of life.

 Knowledge which is based on the following two factors.
 Adult literacy rate
 Gross enrolment ratio at primary, secondary and tertiary level.
 Per capitaGDP measures the standard of living of the people.
On the basis of above criteria an index is created for each of the above
dimensions. This is done on the basis of maximum and minimum values
for each of the above three indicators.

Table 6.1: Maximum and Minimum Values for Calculating HDI

Indicator Maximum Value Minimum

Value
Life expectancy at birth 85 25
Adult literacy rate 100 0
Gross enrolment ratio 100 0
GDP per capita (PPP US$) 40,000 100

The actual values for each country are compared with the maximum and
minimum value and for each country the values of all the indicators would
range between 0 and 1.The following formula is used:
55
Economics of Human
Development

Table 6.2: Human Development Indicators, 2003

Human Development Index Norway India Burundi

HDI HDI HDI
1 127 171
Life expectancy at birth 78.7 63.3 40.4
(years), 2001
Adult literacy rate (% age - 15 and - 58.0 49.2
above), 2001
Combined primary, 98 56 31
secondary and tertiary grcfcs
enrolment ratio (%), 2000-01
GDP per capita (PPP US$), 29,620 2,840 690
2001
Life expectancy index, 2001 0.90 0.64 0.26
Education index, 2001 0.99 0.57 0.43
GDP index, 2001 0.95 0.56 0.32
Human Development Index 0.944 0.590 0.337
(HDI) value, 2001
GDP per capita (PPP US$) rank 4 -12 0
minus HDI rank

Table 6.2 gives the Human Development index of selected countries as

given by the UN Human Development Report, 2003. According to this
report, India is ranked 127 among a total of 175 countries. India is
classified on the basis of HDI as a country of medium human
development.

Three dimensions in the HDI: The HDI combines three dimensions:

• Life expectancy at birth, as an index of population health and
longevity
• Knowledge and education, as measured by the adult literacy rate
(with two-thirds weighting) and the combined primary, secondary,
and tertiary gross enrolment ratio (with one-third weighting).
• Standard of living, as indicated by the natural logarithm of gross
domestic product per capita at purchasing power parity.
The formula defining the HDI is promulgated by the United Nations
Development Programme (UNDP) In general, to transform a raw variable,

56
say x, into a unit-free index between 0 and 1 (which allows different Measurement of Human
indices to be added together). Development – II

where min xand maxx are the lowest and highest valuesthe variable x can
attain, respectively.
The Human Development Index (HDI) then represents the uniformly
weighted sum with 1/3 contributed by each of the following factor indices:

Methods of HDI measures:

A) Life Expectancy Index:
Life expectancy is the expected (in the statistical sense) number of years
of life remaining at a given age. It is denoted by ex, which means the
average number of subsequent years of life for someone now aged x,
according to a particular mortality experience. (In technical literature, this
symbol means the average number of complete years of life remaining,
excluding fractions of a year. The corresponding statistic including
fractions of a year, the normal meaning of life expectancy, has a symbol
with a small circle over the e.) The life expectancy of a group of
individuals is heavily dependent on the criteria used to select the group.
Life expectancy is usually calculated separately for males and females.
Females live longer than males in countries with modern obstetric care.
In countries with high infant mortality rates, the life expectancy at birth is
highly sensitive to the rate of death in the first few years of life. Because
of this sensitivity to infant mortality, simple life expectancy at age zero
can be subject to gross misinterpretation, leading one to believe that a
population with a low overall life expectancy will necessarily have a small
proportion of older people. For example, in a hypothetical stationary
population in which half the population dies before the age of five, but
everybody else dies exactly at 70 years old, the life expectancy at age zero
will be about 35 years, while about 25% of the population will be between
the ages of 50 and 70. Another measure such as life expectancy at age 5
(e5) can be used to exclude the effect of infant mortality to provide a
simple measure of overall mortality rates other than in early childhood—in
the hypothetical population above, life expectancy at age 5 would be 70
years. Aggregate population measures such as the proportion of the
population in various age classes should also be used alongside individual-
based measures like formal life expectancy when analyzing population
structure and dynamics.

B) Education Index:
The Education Index is measured by the adult literacy rate (with two-
thirds weighting) and the combined primary, secondary, and tertiary
57
Economics of Human gross enrolment ratio (with one-third weighting). The adult literacy rate
Development gives an indication of the ability to read and write, while the GER gives an
indication of the level of education from kindergarten to postgraduate
education.
Education is a major component of well-being and is used in the measure
of economic development and quality of life, which is a key factor
determining whether a country is a developed, developing, or
underdeveloped country.

c) Adult literacy index:

The Adult literacy index (ALI) is a statistical measure used to determine
how many adults can read and write in a certain area or nation. Adult
literacy is one of the factors in measuring the Human Development Index
(HDI) of each nation, along with life expectancy, education, and standard
of living.
The equation for calculating the Adult Literacy Index is:

The gross enrolment ratio (GER) or gross enrolment index (GEI) is a

statistical measure used in the education sector and by the UN in its
Education Index. The GER gives a rough indication of the level of
education from kindergarten to postgraduate education – known in the UK
and some other countries (mostly in the Commonwealth of Nations) as
primary,secondary, and/or tertiary–among stresidents in a given
jurisdiction.
In the UN, the GER is calculated by expressing the number of students
enrolled in primary, secondary and tertiary levels of education, regardless
of age, as a percentage of the population of official school age for the
three levels.

D) Gross domestic product:

The gross domestic product (GDP) or gross domestic income (GDI) is a
measure of a country's overall economic output. It is the market value of
all final goods and services made within the borders of a country in a year.
It is often positively correlated with the standard of living, alternative
measures to GDP for that purpose.
Gross domestic product comes under the heading of national accounts,
which is a subject in macroeconomics.
GDP can be determined in three ways, all of which should in principle
give the same result. They are the product (or output) approach, the
income approach, and the expenditure approach.
58
 Measurement of Human
Development – II

6.3 HUMAN POVERTY INDEX (HPI)

6.3.1 Introduction:

The Human Poverty Index (HPI) was introduced in 1997, and is a

composite index which assesses three elements of deprivation in a country
– longevity, knowledge and a decent standard of living.

There are two indices; the HPI – 1, which measures poverty in developing
countries, and the HPI-2, which measures poverty in OCED developed
economies.

6.3.2 HPI-1 (for developing countries):

The HPI for developing countries has three components:

1. The first element is longevity, which is defined as the probability of

not surviving to the age of 40.
2. The second element is knowledge, which is assessed by looking at the
adult literacy rate.
3. The third element is to have a ‘decent’ standard of living. Failure to
achieve this is identified by the percentage of the population not using
an improved water source and the percentage of children under-weight
for their age.

As a region of the world, Sub-Saharan Africa has the highest level of

poverty as a proportion of total population, at over 60%. The second
poorest region is Latin America, with 35% of its population living in
poverty.

6.3.3 HPI-2 (for developed – OECD countries):

The indicators of deprivation are adjusted for advanced economies in the

following ways:

1. Longevity, which for developed countries is considered as the

probability at birth of not surviving to the age of 60.
2. Knowledge is assessed in terms of the percentage of adults lacking
functional literacy skills, and;
3. A decent standard of living is measured by the percentage of the
population living below the poverty line, which is defined as those

59
Economics of Human below 50% of median household disposable income, and social
Development exclusion, which is indicated by the long-term unemployment rate.

6.3.4 Disadvantage of HPI:

Limited utility, because it combined average deprivation levels for each

dimension and thus could not be linked to any specific group of people.

6.3.5 Current Status:

The HPI was replaced in 2010 by the Multidimensional Poverty Index or

MPI – which directly measures the combination of deprivations that each
household experiences. It complements traditional monetary-based
poverty measures by capturing the acute deprivations that each person
faces at the same time with respect to education, health and living
standards.
6.4 GENDER RELATED DEVELOPMENT INDEX (GDI)
6.4.1 Introduction:
The Human Development Index is a three-indicator index that assesses
progress in human development but ignores gender inequalities.
Therefore, the GDI index is used to investigate gender differences in
achievement. The GDI, like the HDI, assesses men and women's
achievements in the same three dimensions and variables. In this article
we will discuss the Gender Development Index, its definition and its major
objectives.

6.4.2 Gender Development Index (GDI):

The Gender Development Index (GDI) is a method for examining gender
equality. The Gender Development Index (GDI) and the Gender
Empowerment Measure (GEM) were first introduced in the United
Nations Development Program’s Human Development Report in 1995.
The goal of these assessments was to give the Human Development Index
a gender-sensitive dimension (HDI). The GDI was the first measurement
they devised as a result.

6.4.3 Gender Development Index: Definition :

The GDI is a “distribution-sensitive metric that takes into account the
impact of existing gender gaps on human development in the three
components of the HDI.” The GDI is distribution sensitive, which means
it considers not just the averaged or overall level of well-being and
prosperity in a given country, but also how this wealth and well-being is
distributed among different social groups. The HDI and GDI (together
with the GEM) were established to compete with the more traditional
general income-based metrics of development, such as GDP and GDP per
capita (GNP).
60
6.4.4 The Gender-Related Development Index : Measurement of Human
Development – II
The Gender-Related Development Index is commonly referred to as a
“gender-sensitive HDI extension.” It addresses disparities in life
expectancy, education, and wealth between men and women. It employs
an “inequality aversion” penalty, which penalises gender inequalities in
any of the Human Development Index (HDI) categories, such as life
expectancy, adult literacy, school enrollment, and logarithmic
transformations of per-capita GDP.
The GDI predicts that women will live five years longer than males in
terms of life expectancy. In addition, the GDI takes into account income
inequalities in terms of actual earned income. The GDI can’t be utilised
without the HDI score, hence it can’t be used as a standalone indication of
gender disparities. Only the difference between the HDI and the GDI can
be examined appropriately; the GDI is not an independent measure of
gender gaps on its own.
The GDI accounts for differences between men and women in three basic
dimensions of human development—health, knowledge, and living
standards—using the same component indicators as the HDI to quantify
gender gaps in human development achievements. The GDI is the ratio of
female and male HDIs calculated independently using the same methods
as the HDI.
It’s a direct measure of the gender divide, with the female HDI expressed
as a percentage of the male HDI. Women Development Index is also the
inaugural measure of women’s development and empowerment in terms
of education, health and living standards. Major concerns have arisen
which give rise to the introduction of the Women Development Index.
For 167 nations, the GDI is calculated. Based on the absolute divergence
from gender parity in HDI values, countries are divided into five groups.
This means that both gender disparities favouring males and those
favouring females are taken into account when categorising.
The GDI indicates how much women lag behind their male counterparts in
each dimension of human development and how far they need to catch up.
It is helpful in determining the true gender gap in human development
accomplishments and in developing policy measures to close the gap.
6.4.5 Conclusion :
The Gender Development Index (GDI) is a tool that measures the level
of gender development in a country. It looks at factors such as health,
education, and economic status to determine how well women are doing
compared to men. This index is important because it can help
policymakers identify areas where more work needs to be done in order to
improve the lives of women and girls. Countries that rank high on the GDI
tend to have less gender inequality, while countries that rank low often
have high levels of gender inequality. The United States ranks 24th out of
189 countries on the 2017 GDI. While this ranking is not perfect, it shows
that there is still room for improvement when it comes to gender equality
in our country.

61
Economics of Human 6.5 GENDER EMPOWERMENT MEASURE (GEM)
Development
Measurement of GEM was introduced by UNDP in 1995 . The GEM was
designed to measure “whether women and men are able to actively
participate in economic and political activities and take part in the
decision-making process.” It tells about opportunities available to women
in the society is expressed in terms of the indicators given below:-
1.Political Participation & Decision-Making Power :
Measured by the number of seats in Parliament
2.Economic Participation &Decision making power :
Measured by the number of women occupying high posts of
administrators, managers, technical and professional positions, etc
3.Command Over Resources :
Expressed by share of earned income of women in relation to that of men
Gender equality is a distant dream in India . About 50 % total of the
population as women are not enjoying equality with men in any of these
fields. Indian women mostly remain as housewives. Even an educationally
forward state Kerala,so far there is no woman Chief Minister or even 30 %
strength in the legislative assembly
6.6 SUMMARY
The HDI is used to capture the attention of policy-makers, the media and
nongovernmental organizations, and to change the focus from the usual
economic statistics to human outcomes. It was created to re-emphasize
that people and their capabilities should be the ultimate criteria for
assessing the development of a country, not economic growth.
The HDI is also used to question national policy choices and to determine
how two countries with the same level of income per person can have
widely different human development outcomes. For example, two
countries may have similar incomes per person, but have drastically
differing life expectancy and literacy levels, such that one of the countries
has a much higher HDI than the other. These contrasts stimulate debate on
government policies concerning health and education to determine why
what can be achieved in one country is beyond the reach of the other.
The HDI is also used to highlight differences within countries, between
provinces or states, and across genders, ethnicities and other
socioeconomic groupings. Highlighting internal disparities along these
lines has raised the national debate in many countries.
6.7 QUESTIONS
Q1.Explain the Human Development Index(HDI).
Q2. Discuss the Human Poverty Index (HPI)
Q3. Write a note Gender Empowerment Index(GEI).

62
 MODULE IV

7
ASPECTS OF HUMAN DEVELOPMENT – I

Unit Structure :
7.0 Objectives
7.1 Introduction
7.2 Livelihood
7.3 Inequalities
7.4 Gender
7.5 Child Labour
7.6 Aging Population
7.7 Poverty Alleviation
7.8 Food Security
7.9 Questions

7.0 OBJECTIVES
The main objective of this module is to study and analyse the various
aspects of human development. Human development plays a very
important role in the overall economic development of the country. This
module aims at highlighting various aspects of human development like
livelihood, inequality, child labour and even the problems related to
ageing population. It highlights on issues of security also.

7.1 INTRODUCTION
Human development plays an important role in overall economic
development. Human development is a multidimensional concept as it
takes note of economic, social, political, cultural aspects. Human
development has several aspects as it deals with the concepts and issues
which affect human efficiency.

7.2 LIVELIHOOD
A person's livelihood (derived from life-lode, "way of life") refers to their
"means of securing the basic necessities (food, water, shelter and clothing)
of life". Livelihood is defined as a set of activities essential to everyday

63
Economics of Human life that are conducted over one's life span. Such activities could include
Development securing water, food, fodder, medicine, shelter, clothing.
An individual's livelihood involves the capacity to acquire aforementioned
necessities in order to satisfy the basic needs of themselves and their
household. The activities are usually carried out repeatedly and in a
manner that is sustainable and providing of dignity. For instance, a
fisherman's livelihood depends on the availability and accessibility of fish.
Livelihood is also understood as “Making a living”, “supporting a family”,
or “my job”. The term is well recognized as humans inherently develop
and implement strategies to ensure their survival. The hidden complexity
behind the term comes to light when governments, civil society, and
external organizations attempt to assist people whose means of making a
living is threatened, damaged, or destroyed.
According to Chambers and Conroy,A livelihood is a means of making a
living.A livelihood comprises the capabilities, assets (including both
material and social resources) and activities required for a means of living
or to secure the necessities of life. A livelihood is sustainable when it can
cope with and recover from stress and shocks and maintain or enhance its
capabilities and assets both now and in the future, while not undermining
the natural resource base.
In social sciences, the concept of livelihood extends to include social and
cultural means, i.e. "the command an individual, family, or other social
group has over an income and/or bundles of resources that can be used or
exchanged to satisfy its needs. This may involve information, cultural
knowledge, social networks and legal rights as well as tools, land and
other physical resources."
The concept of livelihood is used in the fields such as political ecology in
research that focuses on sustainability and human rights.
In order to better understand how people develop and maintain
livelihoods,we can give the following framework. It provides us the way
to understand
1. the assets people draw upon
2. the strategies they develop to make a living
3. the context within which a livelihood is developed and
4. those factors that make a livelihood more or less vulnerable to shocks
and stresses.

Livelihood Assets :
Assets may be tangible, such as food stores and cash savings, as well as
trees, land, livestock, tools, and other resources. Assets may also be
intangible such as claims one can make for food, work, and assistance as

64
well as access to materials, information, education, health services and Aspects of Human
employment opportunities. Development - I

Another way of understanding the assets, or capitals, that people draw

upon to make a living is to categorize them into the following five groups:
a. Human capital: Skills, knowledge, health and ability to work
b. Social capital: Social resources, including informal networks,
membership of formalized groups and relationships of trust that
facilitate cooperation and economic opportunities.
c. Natural capital: Natural resources such as land, soil, water, forests and
fisheries.
d. Physical capital: Basic infrastructure, such as roads, water &
sanitation, schools, ICT; and producer goods, including tools, livestock
and equipment
e. Financial capital: Financial resources including savings, credit, and
income from employment, trade and remittances
Livelihood Context :
Livelihoods are formed within social, economic and political contexts.
Institutions, processes and policies, such as markets, social norms, and
land ownership policies affect our ability to access and use assets for a
favorable outcome. As these contexts change they create new livelihood
obstacles or opportunities. They are
a. Livelihood Contexts Social relations: The way in which gender,
ethnicity, culture, history, religion and kinship affect the livelihoods of
different groups within a community.

b. Social and political organization: Decision-making processes, civic

bodies, social rules and norms, democracy, leadership, power and
authority, rent-seeking behavior.

c. Governance: The form and quality of government systems including

structure, power, efficiency and effectiveness, rights and
representation.

d. Service delivery: The effectiveness and responsiveness of state and

private sector agencies engaged in delivery of services such as
education, health, water and sanitation.

e. Resource access institutions: The social norms, customs and behaviors

(or ‘rules of the game’) that define people’s access to resources

f. Policy and policy processes: The processes by which policy and

legislation is determined and implemented and their effects on
people’s livelihoods
Livelihoods are also shaped by the changing natural environment. The
quality of soil, air and water; the climatic and geographic conditions; the

65
Economics of Human availability of fauna and flora; and the frequency and intensity of natural
Development hazards all influence livelihood decisions.

Livelihood Strategies :
How people access and use these assets, within the aforementioned social,
economic, political and environmental contexts, form a livelihood
strategy. The range and diversity of livelihood strategies are enormous. An
individual may take on several activities to meet his/her needs. One or
many individuals may engage in activities that contribute to a collective
livelihood strategy. Within households, individuals often take on different
responsibilities to enable the sustenance and growth of the family. In some
cultures, this grouping may expand to a small community, in which
individuals work together to meet the needs of the entire group.

Livelihood Vulnerability :
The strength of a given livelihood is not only measured by its productive
outcomes, but equally by its resilience to shocks, seasonal changes and
trends. Shocks might include natural disasters, wars, and economic
downturns. Availability of resources, income-generating opportunities,
and demand for certain products and services may fluctuate seasonally.
More gradual and often predictable, trends in politics and governance,
technology use, economics, and availability of natural resources, can pose
serious obstacles to the future of many livelihoods. These changes impact
the availability of assets and the opportunities to transform those assets
into a “living”. Under such conditions, people must adapt existing
strategies or develop new strategies in order to survive.

Livelihood Interdependence :
One final important characteristic of livelihoods is their interdependence.
Very few livelihoods exist in isolation. A given livelihood may rely on
other livelihoods to access and exchange assets. Traders rely on farmers to
produce goods, processors to prepare them, and consumers to buy them.
Livelihoods also compete with each other for access to assets and markets.
Thus, positive and negative impacts on any given livelihood will, in turn,
impact others. This is a particularly important consideration when
planning livelihood assistance.

7.3 INEQUALITIES
Inequality is a fundamental issue for human development. Extreme
inequalities in opportunity and life chance have a direct bearing on human
capabilities. Deep human development disparities persist between rich
people and poor people, men and women, rural and urban areas and
different regions and groups. These inequalities create mutually
reinforcing structures of disadvantage that follow people through life
cycles and are transmitted across generations. This is wrong for both
intrinsic and instrumental reasons. Inequality violates basic precepts of
social justice, but it is also bad for growth, bad for democracy and bad for
social cohesion.
66
Inequalities, the evidence is everywhere. And although they may be hard Aspects of Human
to measure and summarize, there is a sense in many countries that many Development - I
are approaching a precipice beyond which it will be difficult to recover.
Not all inequalities are harmful, but those that are perceived as being
unfair tend to be. Under the shadow of sweeping technological change and
the climate crisis, these inequalities hurt almost everyone. They weaken
social cohesion and people’s trust in government, institutions, and each
other. They are wasteful, preventing people from reaching their full
potential at work and in civic life, hurting economies and societies. And
when taken to the extreme, people can take to the streets.
The United Nations Development Programme’s (UNDP) 2019 Human
Development Report, opens a new window to understand and address
inequalities in human development.
“Beyond income, beyond averages,beyond today: Inequalities in human
development in the 21st Century” asks what forms of inequality matter
and what causes them. It recognizes that pernicious (Wicked, malicious,
Evil) inequalities are generally better thought of as a symptom of broader
problems in a society and economy. It also asks what policies can tackle
the underlying drivers—policies that can simultaneously help nations to
grow their economies sustainably and equitably expand human
development.
2019 Human Development Report says business as usual will not solve
new generation of inequalities. The incidences sweeping across the world
today signal that, despite unprecedented progress against poverty, hunger
and disease, many societies are not working as they should. The
connecting thread, argues a new report from the United Nations
Development Programme (UNDP), is inequality.
“Different triggers are bringing people onto the streets -- the cost of a train
ticket, the price of petrol, demands for political freedoms, the pursuit of
fairness and justice. This is the new face of inequality, and as this Human
Development Report sets out, inequality is not beyond solutions,” says
UNDP Administrator, Achim Steiner.
A NEW GENERATION OF INEQUALITIES IS EMERGING,
EVEN IF MANY 20TH CENTURY INEQUALITIES ARE
DECLINING
It is common knowledge that some basic inequalities are slowly narrowing
in many countries, even if much remains to be done. Though the
inequalities narrowing between countries in different human development
groups are narrowing down, yet the gaps are still wide. In life expectancy
at birth, in access to primary education, and in access to mobile phones,
countries with lower human development are catching up with more
developed countries.
In contrast, and much less well known, inequalities in more advanced
areas are widening. Countries with higher human development have

67
Economics of Human longer life expectancy at older ages, higher tertiary education enrollment
Development and more access to broadband—and they are increasing their lead.

Slow convergence in basic, rapid divergence in enhanced capabilities

These new inequalities may be one reason behind an apparent increase in
concern about inequality: These are the inequalities that will shape
people’s ability to seize the opportunities of the 21st century and function
in a knowledge economy, and to meet challenges, including the ability to
cope with climate change.

INEQUALITIES IN HUMAN DEVELOPMENT CAN

ACCUMULATE THROUGH LIFE, FREQUENTLY HEIGHTENED
BY POWER IMBALANCES
Understanding inequality—even income inequality—means looking well
beyond income. Different inequalities interact, while their size and impact
shifts over a person’s lifetime.Inequalities start before birth, and the gaps
can increase over a person’s life if they are not counteracted, creating self-
perpetuating engines of privilege and disadvantage. This can happen in
many ways, one set of linkages: the nexus between health, education, and
parental income.
Parental incomes and circumstances affect the health, education, and
incomes of children. Health gradients—disparities in health across
socioeconomic groups—can start before birth and may accumulate. When
that happens, inequalities compound and spiral: Children born to low-
income families are more prone to poor health and lower education. Those
with lower education are less likely to earn as much as others, while
children in poorer health are more likely to miss school. And when
children grow up, they typically partner with someone having similar
socioeconomic status, reinforcing the inequalities across generations. It is
a cycle that is often difficult to break, not least because of the way
inequalities in income and political power co-evolve. When the wealthy
shape policies that favor themselves and their children—as they often
do—that drives further accumulation of income and opportunity at the top.
Unsurprising, then, that mobility tends to be lower in more unequal
societies.
A new generation of inequalities is opening up, around education, and
around technology and climate change -- two seismic shifts that,
unchecked, could trigger a ‘new great divergence’ in society of the kind
not seen since the Industrial Revolution, according to the report.
In countries with very high human development, for example,
subscriptions to fixed broadband are growing 15 times faster and the
proportion of adults with tertiary education is growing more than six times
faster than in countries with lo The report analyzes inequality in three
steps: beyond income, beyond averages, and beyond today. But the
problem of inequality is not beyond solutions, it says, proposing a battery
of policy options to tackle it.

68
Thinking beyond income Aspects of Human
Development - I
The 2019 Human Development Index (HDI) and its sister index, the 2019
Inequality-Adjusted Human Development Index, set out that the unequal
distribution of education, health and living standards stymied countries’
progress. By these measures, 20 per cent of human development progress
was lost through inequalities in 2018. The report, therefore, recommends
policies that look at but also go beyond income, including:
• Early childhood and lifelong investment : Inequality begins even
before birth and can accumulate, amplified by differences in health and
education, into adulthood. For example, children in professional families
in the United States are exposed to three times as many words as children
in families receiving welfare benefits, with a knock-on effect on test
scores later in life. Policies to address it, therefore, must also start at or
before birth, including investing in young children’s learning, health and
nutrition.
• Productivity : Such investments must continue through a person’s life,
when they are earning in the labour market and after. Countries with a
more productive workforce tend to have a lower concentration of wealth at
the top, for example, enabled by policies that support stronger unions, set
the right minimum wage, create a path from the informal to the formal
economy, invest in social protection, and attract women to the workplace.
Policies to enhance productivity alone are not enough, however. The
growing market power of employers is linked to a declining income share
for workers. Antitrust and other policies are key to address the
imbalances of market power.
• Public spending and fair taxation : the report argues that taxation
cannot be looked at on its own, but it should be part of a system of
policies, including public spending on health, education, and alternatives
to a carbon-intensive lifestyle. More and more, domestic policies are
framed by global corporate tax discussions, highlighting the importance
of new principles for international taxation, to help ensure fair play,
avoid a race to the bottom in corporate tax rates, especially as
digitalization brings new forms of value to the economy, and to detect and
deter tax evasion.

Looking beyond averages :

Averages often hide what is really going on in society, says the HDR, and
while they can be helpful in telling a larger story, much more detailed
information is needed to create policies to tackle inequality effectively.
This is true in tackling the multiple dimensions of poverty, in meeting
the needs of those being left furthest behind such as people with
disabilities, and in promoting gender equality and empowerment. For
example:
• Gender equality : Based on current trends, it will take 202 years to
close the gender gap in economic opportunity alone, cites the report.
While the silence on abuse is breaking, the glass ceiling for women to
69
Economics of Human progress is not. Instead, it is a story of bias and backlash. For example, at
Development the very time when progress is meant to be accelerating to reach the
Sustainable Development Goals (SDGs) by 2030, the report’s 2019
Gender Inequality Index says progress actually is slowing.
A new “social norms index” in the Report says that in half of the countries
assessed, gender bias has grown in recent years. About fifty per cent of
people across 77 countries, said they thought men make better political
leaders than women, while more than 40 per cent felt that men made better
business executives. Therefore, policies that address underlying biases,
social norms and power structures are key.

Planning beyond today :

Looking beyond today, the report asks how inequality may change in
future, looking particularly at two seismic shifts that will shape life up to
the 22nd century:
• The climate crisis : As a range of global protests demonstrate, policies
crucial to tackling the climate crisis like putting a price on carbon can be
mis-managed, increasing perceived and actual inequalities for the less
well-off, who spend more of their income on energy-intensive goods and
services than their richer neighbours. If revenues from carbon pricing
are ‘recycled’ to benefit taxpayers as part of a broader social policy
package, the authors argue, then such policies could reduce rather than
increase inequality.
• Technological transformation : Technology, including in the form of
renewables and energy efficiency, digital finance and digital health
solutions, offers a glimpse of how the future of inequality may break
from the past, if opportunities can be seized quickly and shared broadly.
There is historical precedent for technological revolutions to carve deep,
persistent inequalities – the Industrial Revolution not only opened up the
great divergence between industrialized countries and those who depended
on primary commodities; it also launched production pathways that
culminated in the climate crisis.
“This Human Development Report sets out how systemic inequalities are
deeply damaging our society and why,” said Steiner. “Inequality is not just
about how much someone earns compared to their neighbour. It is about
the unequal distribution of wealth and power: the entrenched social and
political norms that are bringing people onto the streets today, and the
triggers that will do so in the future unless something changes.
Recognizing the real face of inequality is a first step; what happens next is
a choice that each leader must make.”

Measurement :
Economic inequality is the fundamental disparity that permits certain
material choices to one individual, while denying those choices to another
individual. Following measures are used to get an estimation of the extent
of inequality in an economy:
70
 I. The Personal or Size Distribution of Income Aspects of Human
Development - I
II. The Functional or Factor Share of Distribution of Income
I. The Personal or Size Distribution of Income : Most commonly used
measure of inequality. It is also called as Size Distribution and deals with
individual person and the total income they receive.It does not consider
the way in which income is received. The methods are,

a. Kuznet’s Ratio :
 Used by noble laureate Simon Kuznet.
 Used as a measure of the degree of inequality between the two
extremes of very poor and very rich in a country.
 All individuals are arranged by ascending personal incomes and then
divide the total population into different groups or sizes.
 A common method is to divide the population into successive quintiles
(fifths) or deciles (tenths)according to ascending income levels and
then determine what proportion of the total NI is received by each
income group
 A common measure of income inequality is the ratio of income
received by the top 20% and bottom 40% of the population (Kuznet
Ratio).
b. Lorenz Curve : Lorenz curve is a graphical representation of
the distribution of income or of wealth. It was developed by Max O.
Lorenz in 1905 for representing inequality of the wealth distribution.
Let us assume that we have a group of 100 income earning households are
plotted on the x axis in cumulative percentage. The cumulative percentage
of income is plotted on the y axis. At point 20 we have the lowest
(poorest) 20% of the population, at point 60 we have bottom 60% and at
the end of the axis all 100% of population is accounted for. The total
income received by each percentage of population(Y-axis) is also
cumulative up to 100%. Thus both axis are equally long.

71
Economics of Human The following two diagrams explain the relative degree of inequality
Development

In diagram ‘a’ we get relatively equal distribution of income and in

diagram ‘b’we get relatively unequal distribution. In diagram “a” the
Lorenz curve is near the equity line and in diagram “b” the Lorenz curve is
away from equity line.
C. Gini Coefficient : Another convenient method-formulated after the
Italian statistician who formulated it in 1912.The relative degree of
income inequality in a country can be obtained by calculating the ratio of
area between the diagonal and Lorenz curve divided by the total area
of the half square in which the curve lies. It is called as ‘Gini
Concentration Ratio’ or as ‘Gini Coefficient’. It can vary between zero
(case of perfect equity) to one (case of perfect inequality). Larger the Gini
Coefficient greater would the extent of economic inequality and vice
versa.

III. Functional Distribution: Also called as factor share distribution

of income – explains the share of total national income that each of
72
 the factors of production (land, labour, capital etc.). SS is the Aspects of Human
supply curve of labour and DD is the demand curve for labour. Development - I

S of La=f(W) -----direct relation.

D for La=f(W)-----inverse relation
Wage Bill =Wage rate x Level of employment.
Wage Bill= Area OWEL. Profit = DWE

7.4 GENDER
Concept of Human Development indicates that the real aim of
development is to improve the quality of human life. It is a process that
enables human beings to realize their potential, build self-confidence and
lead lives of dignity and fulfilment. Economic growth is an important
component of development, but it cannot be a goal in itself, nor can it go
on indefinitely. Although people differ in the goals that they would set for
development, some are virtually universal. These include a long and
healthy life, education access to the resources needed for a decent standard
of living, political freedom, guaranteed human rights, and freedom from
violence. Development is real only if it makes our lives better in all these
respects.
Like race and ethnicity, gender is a social construct. It defines and
differentiates the roles, rights, responsibilities and obligations of women
and men. The innate biological differences between females and males are
interpreted by society to create a set of social expectations that define the
behavior that are appropriate for women and men and that determine
women’s and men’s differential access to rights, resources, and power in
society. Although the specific nature and degree of these differences vary
from one society to the next, they typically favour men, creating a
imbalance in power and a gender inequality that exists in most societies
worldwide.

73
Economics of Human Gender is defined by FAO as ‘the relations between men and women,
Development both perceptual and material. Gender is not determined biologically, as a
result of sexual characteristics of either women or men but is constructed
socially. It is a central organizing principle of societies, and often governs
the processes of production and reproduction, consumption and
distribution’ (FAO, 1997). Despite this definition, gender is often
misunderstood as being the promotion of women only. However, as we
see from the FAO definition, gender issues focus on women and on the
relationship between men and women, their roles, access to and control
over resources, division of labor, interests and needs. Gender relations
affect household security, family well-being, planning, production and
many other aspects of life (Bravo-Baumann, 2000).
Gender is an integral component of every aspect of the economic, social,
daily and private lives of individuals and societies, and of the different
roles ascribed by society to men and women.
Gender is a socially constructed set of roles and responsibilities associated
with being girl and boy or women and men, and in some cultures a third or
other gender. Gender issues include all aspects and concerns related to
women’s and men’s lives and situation in society, to the way they
interrelate, their differences in access to and use of resources, their
activities, and how they react to changes, interventions and policies.
In general, gender refers to the roles, behaviors, activities, attributes and
opportunities that any society considers appropriate for girls and boys, and
women and men. Gender interacts with, but is different from, the binary
categories of biological sex.
Gender equality means that the different behaviors, aspirations and needs
of women and men are considered, valued and favored equally. It does not
mean that women and men have to become the same, but that their rights,
responsibilities and opportunities must not depend on whether they are
born male or female.
Gender equality leads to better human development outcomes. This key
finding of the World Development Report 2012: Gender Equality and
Development (WDR 2012) underscores the World Bank Group’s
commitment to support gender equality in health, education, and social
protection and labor. The Bank’s global strategies and country programs
in these sectors aim to reduce disparities between men and women and
across population groups. To achieve this, the Bank’s assistance in these
sectors includes expanding access to family planning and reproductive
health services, promoting gender parity in education, providing social
safety nets and insurance, and helping people acquire needed resources
and skills.
The WDR 2012 demonstrates that gender equality shapes investments and
outcomes in health, education, social protection, and labor. Prevailing
gender roles, social norms, and social networks influence control over
resources and access to services, and rules and norms imposed by a range
of institutions shape the status of women and men. However, too often
74
these services may not be equally accessible or affordable to men and Aspects of Human
woman, with impacts muted by gender norms, discrimination, and market Development - I
failures.
In education, the persistence of gender gaps among girls or boys depends
increasingly on whether schooling actually produces knowledge and skills,
and the failure is most severe for those facing multiple sources of
disadvantage often based on gender, location, disability, and income. In
poorer households, for instance, lower quantity and quality of education
are often greater obstacles for girls than boys.
Women face a number of disadvantages in the labour market. As well as
coping with sexist prejudices, they must reconcile the twin roles of
homemaker and money-maker. This often affects their work status, the
length and structure of their workday and their salary level. In addition,
the employment sector offers less scope and potential for women than for
men, as well as lower pay for the same work.

Poverty
Poverty can be defined as the combination of uncertain or non-existent
income and a lack of access to the resources needed to ensure sustainable
living conditions. It often goes hand-in-hand with hunger,
malnourishment, poor health, high mortality and morbidity rates,
insufficient education and precarious and unhealthy housing.Studies have
revealed an increasing feminization of poverty.In rural areas, where
services and job opportunities are even fewer than in urban areas, poverty
is also more acute. The situation is worse for women, who are less likely
to have access to production factors, services and resources such as credit,
land, inheritance, education, information, extension services, technology
and farm inputs, as well as a say in decision-making.Another reason for
the persistence of female poverty is gender vulnerability within the home.
When poor families cannot afford to send all of their children to school,
parents favour investing in the boy-children, keeping the girls at home to
help with domestic work or some income-generating activity.

Family life
In all societies women are the prime carers of children, the elderly and the
ill, and do most of the domestic tasks.Women's lives are greatly affected
by reproduction, which has an incisive and direct impact on their health
and on their educational, employment and earning opportunities.Women
in developing countries are estimated to do between two-thirds and three-
quarters of the domestic work.The differences between female- and male-
headed households usually have a bearing on all aspects of family life: the
size and composition of the family and how it is run; nutrition; raising
children; and available income.
Biologically, men and women have different health needs, but lifestyles
and socially ascribed roles arising from prevailing social and cultural
patterns also play a part in the health picture. Men are more likely to be
the victims of occupational diseases, accidents at work, smoking, alcohol
75
Economics of Human and other forms of substance abuse. Men have a higher incidence of cancer
Development and of cardiovascular lesions and diseases (the principal cause of male
mortality). Women's health risks, which are mainly linked to reproduction,
make them more vulnerable during pregnancy to anemia, malnutrition,
hepatitis, malaria, diabetes and other illnesses.

Education
"Education" here is taken to mean "schooling", as the word has
connotations far beyond mere formal instruction.
The increasingly competitive labour market demands ever-higher levels of
education. People without it are at a growing disadvantage.More women
than men are illiterate; and the lower a country's literacy rate, the wider
the gap between the two sexes.

The environment
The impact of environmental degradation is gender-differentiated in terms
of workloads and the quality of life; women are the first to be affected by
the depletion of natural resources. In rural areas in most developing
countries, women are responsible for the daily management and use of
natural resources, as well as providing for the family by raising food
crops, gathering forest products and fetching wood and water. Widespread
and growing deforestation and the drying-up of water sources force
women to range ever further afield, spending more time and energy in
producing and finding essential commodities and making it even harder
for them to engage in more productive, more lucrative activities.

The public and policy-making spheres

Gender inequality is a persistent feature of the public and policy-making
spheres. Women continue to be under-represented in governments,
legislative bodies and many other crucial sectors affecting public opinion,
such as the mass media, the arts, religion and culture.
Promoting Gender Equality :
i. Creation of competitive markets : These would improve gender
equality, that is, through access to services, employment & skills, and
finance. This can make labor markets more competitive, often
inequality in employment has a larger effect on growth than it does
inequality in education. Increasing entrepreneurial opportunities for
women, this increases the competitiveness of product markets.
ii. Promotion of Physical capital/financial development : By
increasing women’s employment and entrepreneurship, higher
household savings rates can be made possible, and through more equal
distribution of income greater investment will be achieved.
iii. Strengthening the Rule of Law : Strengthened rule of law correlates
with greater security for women; when women participate more fully
in society, countries are safer and more prosperous for all citizens.
76
 There is a small but statistically significant relationship between rising Aspects of Human
female political and workforce participation and lower levels of Development - I
corruption.
iv. Facilitating Openness to Trade : Discrimination Prevents Women
from Engaging in Trade and Entrepreneurship. Therefore, it is
essential to facilitate openness to trade by developing various policies
that aid gender equality in trade.
v. Promoting the increase in Human Capital : Greater control for
women in the domestic sphere (household resources and family size) is
the human capital of the next generation. Women are more likely to
spend income on children. Because of discrimination in the household,
women suffering violence are less able to participate in the labor force.
Therefore, it is essential to give emphasis on promoting the increase of
human capital a family base.
vi. Equal access to Employment & Skills : Itwould emphasize Women’s
access to employment, including ability to enter and remain in the paid
workforce. Creation of policies to allow women’s the flexibility to
participate in the labor force is essential.
vii. General Access to and usage of infrastructure and utilities : Access
to infrastructure and utilities is an important determinant of productive
economic opportunities, both by directly facilitating access to income-
earning activities (e.g., through transportation and ICT) and by
reducing the burden of unpaid work.
viii. Decision-making & access to information : Women’s perspectives
are not always adequately represented in decision-making processes at
the household, local or national level, resulting in decisions which do
not equally benefit men and women. Women face difficulties in
accessing information important to economic opportunity, such as on
legal rights (employment, inheritance, etc.), value chain opportunities,
and local infrastructure planning & delivery because their behavior
patterns/ information preferences are not taken into account.
Therefore, it is essential to create an atmosphere that creates equal
gender participation and consideration in decision making.
Learning for All, the education strategy, articulates how the Bank
supports countries to address gender equality and advance gender parity in
education through a combination of effective policies and sustained
national investments in education; improving countries’ education system
capacity to raise not only school attendance but also learning outcomes. In
order to improve learning outcomes for all, the education sector
recognizes the importance of addressing multiple or overlapping sources
of disadvantage. Being born a poor girl in a rural community or to an
ethno-linguistic minority group compoundseducation and life
disadvantages and increases vulnerability. At the same time the Bank
stresses how and why educating girls and women is smart economics.
Evidence shows that one additional year of schooling for girls and women
increases their wages by at least 10 percent; reduces infant mortality rates
77
Economics of Human by at least 5 percent; and enables per capita income growth of at least 0.3
Development percent on average. The Bank plays a key role in advancing girls’
education through its research, funding, policy advocacy, and strategic
partnerships including the United Nations Girls’ Education Initiative.
Healthy Development : The World Bank Strategy for Health, Nutrition,
and Population Results and Reproductive Health Action Plan focus on
reducing high fertility, improving pregnancy outcomes, and reducing
sexually-transmitted infections, including HIV. Specific interventions
include strengthening health systems to achieve better reproductive health
outcomes by improving access to and knowledge of family planning
among households, increasing antenatal visits and skilled birth attendance,
training health workers, and promoting youth-friendly services and young
women’s life skills, and promoting multi-sector investments to improve
reproductive health outcomes.
Human development is defined as the process of enlarging the choices for
all people, not just one part of the society. Such a process becomes unjust
and discriminatory if most women are excluded from its benefits. Gender
equality is therefore a core principle of human development.To quote the
eloquent words of Mahbub ul Haq, “Development, if not engendered, is
endangered.”

CONSTITUTIONAL GUARANTEES

 Equality before the law. Article 14

 No discrimination by the State on the grounds only of religion, race,

caste, sex, place of birth or any of these. Article 15(1)

 Special provisions to be made by the State in favour of women and

children. Article 15(3)

 Equality of opportunity for all citizens in matters relating to

employment or appointment toany office under the State. Article 16,
15

 State policy to be directed to securing for men and women equally, the
right to an adequatemeans of livelihood. Article 39(a)

 Equal pay for equal work for both men and women. Article 39(d)

 Provisions to be made by the State for securing just and humane

conditions of work and formaternity relief. Article 42

 To promote harmony and to renounce practices derogatory to the

dignity of women. Article51(A)(e)
Planners and policy-makers must be mindful of the major aspects of
socially ascribed gender functions and the specific needs of men and
women. If development policies are to be sustainable, they must consider
existing gender disparities in employment, poverty, family life, health,
education, the environment, public life and decision-making bodies.
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7.5 CHILD LABOUR Aspects of Human
Development - I
7.5.1 Introduction :
A child should not be subjected to work at the expense of his or her
education and dreams. Child labour reduces the opportunity in minors to
enjoy their childhood, go to school and have a decent attempt to success. It
condemns them to a life of limited opportunities. It is, therefore, necessary
to ensure that every child is protected and not exploited for cheap labour.
It is not just the responsibility of the parents to eliminate child labour but
also that of the government and the society.

7.4.2 Meaning :
Child labour refers to the use of children as a source of labour while
depriving them of their fundamental rights in the process of growth and
development. Such rights include the opportunity to enjoy their childhood,
attend school regularly, have peace of mind, and live a dignified
life.Childlabour can also refer to the practice of exploiting children for
financial gain. Some industries employ children in order to cut down on
labour costs since their wage demand is low.
Work that places child in a situation that is socially, mentally, physically,
or morally harmful and dangerous is also defined as child labour because
it ignores the well-being of such children. When children are made to
perform work that is legally prohibited to be performed by children of a
certain age group, such type of work is also referred to as child labour.
Child labour refers to the employment of children in any work that
deprives children of their childhood, interferes with their ability to attend
regular school, and that is mentally, physically, socially or morally
dangerous and harmful. This practice is considered exploitative by many
international organisations. Legislations across the world prohibit child
labour. These laws do not consider all work by children as child labour;
exceptions include work by child artist, supervised training, certain
categories of work such as those by Amishchildren, and others.

7.4.3 Definition :
The term child labour has many definitions by different scholars.
According to Suda(2011) the term child labour refers to when children is
working in any type of work that is dangerous and harmful to children’s
health or the work hinders their education. For Moyi (2011) child labour
refers to low wages, long hours, physical and sexual abuse. According to
Edmonds and Pavcnik (2005) child labour is viewed as a form of child
labour abuse, when children work in bad conditions and hazardous
occupations.
According to International Labour Organization (ILO), the term “child
labour” is often defined as work that deprives children of their childhood,

79
Economics of Human their potential and their dignity, and that is harmful to physical and mental
Development development.
According to wikipedia, Child Labour is the practice of having children
engage in economic activity, on a part- or full-time basis. The practice
deprives children of their childhood, and is harmful to their physical and
mental development.

7.4.4 Causes :
Child labour is caused by several factors. Following are some factors
which are responsible the problem of child labour:
1. Poverty : This is the single biggest factor contributing to the children
working hard in factories or shops or construction sites rather than playing
and getting an education. Families do not have enough resources and
children often become the means for more income, even if it means having
to forego the privileges of childhood. Children who come from poor
families may be forced to work to support their siblings and parents or
supplement the household income when expenses are more than the
parents’ earnings. It is a huge problem especially in developing countries
where parents are unable to generate income due to the lack of
employment opportunities or education. Children can be found employed
in mines or hawking in the streets to earn money that is used to provide
basic necessities such as food and clothing for the family. Children may
also be employed in factories to generate income for the family instead of
attending school. Some children have left orphans or abandoned due to
poverty. Such children do not have anyone to take care of them and end up
working to feed themselves unless taken up by orphanages. Such a
practice is a common phenomenon in poverty-stricken regions with large
factories set up by international companies.
2. Low Aspiration : It is important for parents and children to understand
that they can work hard and make something great of themselves. Low
aspirations by parents and children is a major cause of child labour
because in such a situation, being employed in a local factory, or selling
grocery in the streets is the normal way of life. To these types of children
and parents, success only belongs to a certain region or group of people.
They do not aspire to become professionals in the society or great
entrepreneurs. It is a mindset that forms the very foundation of child
labour.
3. Huge demand for unskilled labourers : The demand for unskilled
labourers is another cause of child labour. Children are mostly unskilled
and provide a cheap source of labour, making them an attractive option for
many greedy employers. Child labour, by virtue of being cheap, increases
the margin of profits for such entrepreneurs whose only objective is profit
maximization even if it comes at the expense of ethics and good business
practices. These types of employers can also force children to work under
unfavorable conditions through manipulation or blatant threats.

80
4. Illiteracy : A society with many educated people understands the Aspects of Human
importance of going to school and pursuing dreams. Children have the Development - I
ability and time to become whatever they aspire to be. Illiteracy, on the
other hand, makes it difficult for many people to understand the
importance of education. Illiterate people view education as a preserve of
the privileged in the society. They will therefore not provide support to
children so that they can go to school and build solid foundations for
future success. The same view of life is seen among illiterate parents who
prioritize children contributing to the upkeep of the family over going to
school.
5. Early Marriages : Marrying at an early age is a major contributing
factor to overpopulation. Having many children with little or no resources
to support them leads to child labour. Older children are forced to work in
order to help their parents support the family.
6. High cost of education : Quality education is expensive. To many
parents who live in abject poverty, priority is given to providing food for
the family because education is too expensive to afford especially when
there are many children to pay school fees for. Instead of letting children
stay at home because there is lack of money to send them to school,
parents opt to have them working as unskilled labourers to help support
the family. Some parents can also only afford basic education which
means that children will be forced to look for work since they cannot
pursue their education further.
7. Gender discrimination : Often girls are required to quit school and
take up work to supplement family income until they are suitably married
off. This too is an observation in typically vulnerable classes.
8. Family tradition : Many families with businesses or traditional
occupations like arts, etc. expect the children to work to be able to pass on
the traditional arts or business only by experience.

7.4.5 Consequences / Effects:

Child labour has several negative impacts. Some of them include:
1. Loss of Quality childhood : It is important for human beings to enjoy
every stage of their development. A child should play with friends and
make memories for a lifetime. Youths should explore life and form strong
foundations that would define their adult lives. Child labour, therefore,
leads to loss of quality childhood as children will be deprived of the
opportunity to enjoy the amazing experiences that come with being young.
Children are often encouraged to play because it helps in their growth and
development. A child forced to work will miss many of the good things
associated with childhood.
2. Health issues : Child labour can also lead to health complications due
to undernourishment and poor working conditions. It is highly unlikely
that people who employ children also have the moral capacity to ensure
that they have good working conditions. Working in places such as mines
81
Economics of Human and badly conditioned factories may result in lifetime health issues for
Development children employed to work in these places. A child assigned physically
demanding duties may suffer physical trauma that may scar him or her for
life.
3. Mental trauma : It is not a pleasant experience to be kept working as a
child while your age-mates are out playing and going to school. Children
also lack the ability to shield themselves from most of the challenges that
occur in the workplace. Issues such as bullying, sexual exploitation, and
unfavorable working hours may result in mental trauma in these children.
They will find it hard to forget the past and may become societal misfits
because of bad childhood experiences. Child labour may also result in the
lack of emotional growth and thus insensitivity.
4. Illiteracy : Children that are employed do not have the time to go to
school. They spend a lot of time in their workstations as the days and
years go by. The lack of education and illiteracy makes them individuals
with limited opportunities as far as employment is concerned. Education
also prepares a person for several challenges in the society and without it,
one may turn out to lack the basic skills required to overcome many of
life’s problems. An individual who has gone to school may be aware of
how to approach certain situations in life without resorting to brute force.
An illiterate person, on the other hand, considers force to be the only
answer to nearly all of the challenges experienced.

7.4.6 Solutions:
How can child labour be reduced or completely eradicated? Every
child born has the right to have dreams and pursue those dreams. Even
though the realization of some of these aspirations may be limited by
several challenges, it is still possible to overcome them and achieve the
highest levels of success.
There is need to involve various stakeholders to realize this objective.
These are some of the ways in which the problem of child labour can be
addressed:
1. Free education : Free education holds the key to eliminating child
labour. Parents that do not have money for school fees can use this as an
opportunity to provide their children with education. It has already proved
to be a success in many places around the globe and with more effort, the
cases of child labour will greatly reduce. Mid-day meals schemes can also
be used as a motivating factor for children whose parents can barely afford
a meal to learn. Even if they will be attending school because of the free
meals, they will still be able to learn and create a good education
foundation for themselves.
2. Moral Polishing : Child labour should not be entertained at all. It is
legally and morally wrong. Children should not be allowed to provide
labour at the expense of getting an education and enjoying their childhood.
Factory owners, shopkeepers, and industries among others should not
employ children. The society should be educated on the negative impacts
82
of child labour so that it becomes an issue that is frowned upon whenever Aspects of Human
it occurs. This type of moral polishing would act as a deterrent to people Development - I
who intend to employ children and use them as a source of cheap labour.
Many of the ills that go on in the society do so because people turn a blind
eye or fail to consider their moral impacts. With this kind of approach,
cases of child labour will greatly fall among our communities.
3. Create demand for skilled and trained workers : By creating the
demand for skilled and trained workers, child labour cases will reduce
since almost all child labourers fall under the unskilled worker category. It
will lead to adult employment as the demand for skilled labour rises.
Establishing skill-based learning centers, vocational training centers, and
technical training institutions improves literacy and contributes to the
availability of skilled and trained workers in the job market. Creation of
job opportunities by the government is also another way that cases of
unemployment can be reduced and household income for the population
increased. Such government policies improve living standards and
eliminate the need for children to seek work in order to support their
families.
4. Awareness : Creating awareness about the illegality of child labour can
also help in stemming the practice. Parents should be made aware that
sending their children to work has legal ramifications and the law would
take its course if they are found to be aiding and abetting this vice. It is the
ignorance among many parents and members of the society that makes
them participate in child labour practices. Conducting a campaign to
create awareness about its harmful effects would eliminate the practice.
The government, together with non-governmental organizations and the
civil society, can create a strategy to make such an initiative a success.
5. Empowerment of poor people: Poor people are the most affected by
child labour. The poor living standards and financial constraints
sometimes make them unwilling participants in this vice. Empowering
poor people through knowledge and income generating projects would go
a long way in reducing cases of child labour. Parental literacy also plays
an important role in ensuring that the rights of children are upheld, and
minors are not used as a source of labour. Empowering parents with this
kind of knowledge can create a positive change in the society and
encourage the shunning of child labour practices in communities.

7.4.7 Indian Laws relating to Child Labour :

1. As per the Child Labour (Prohibition and Regulation) Act,
1986, amended in 2016 (“CLPR Act”), a “Child” is defined as any
person below the age of 14, and the CLPR Act prohibits employment
of a Child in any employment including as a domestic help. It is a
cognizable criminal offence to employ a Child for any work.
2. In addition, various laws in India, such as the Juvenile Justice (care
and protection) of Children Act-2000, and the Child Labour
(Prohibition and Abolition) Act-1986 provide a basis in law to
identify, prosecute and stop child labour in India.
83
Economics of Human 3. The Factories Act of 1948 prohibits the employment of children
Development below the age of 14 years in any factory. The law also placed rules on
who, when and how long can pre-adults aged 15–18 years be
employed in any factory.
4. The The Mines Act of 1952 prohibits the employment of children
below 18 years of age in a mine.

7.4.8 Conclusion:
Child labour should never exist. However, it is still noticeable that people
around the country hire children so that they will have the benefit of
paying low wages to them. One should do not encourage child labour, and
neither one should let any other to hire a child to any job.

7.6 AGING POPULATION

7.6.1 Introduction:
Population aging is the 21st century's dominant demographic
phenomenon. Declining fertility, increasing longevity, and the progression
of large-sized cohorts to the older ages are causing elder shares to rise
throughout the world. The phenomenon of population aging, which is
unprecedented in human history, brings with it sweeping changes in
population needs and capacities, with potentially significant implications
for employment, savings, consumption, economic growth, asset values,
and fiscal balance.
Our world is faced today with a major dilemma. On one hand life
expectancy has improved globally but on the other hand fertility rates are
declining in every country. At a first glance living longer and having
fewer children seems to be overall beneficial as you can experience more
in your lifetime and avoid additional household budget pressure through
more children care as well. Unfortunately, the stark reality is that when
combining both trends our population is aging. By population aging it
meant that the median age of the population is rising. In short, the age
demographic is shifting worldwide since there are fewer children born and
adults are expected to live longer.
The aged population is currently at its highest level in human history. The
UN predicts the rate of population ageing in the twenty-first century will
exceed that of the previous century. The number of people aged 60 years
and over has tripled since 1950, reaching 600 million in 2000 and
surpassing 700 million in 2006. It is projected that the combined senior
and geriatric population will reach 2.1 billion by 2050.

7.6.2 Definition :
Population aging refers to changes in the age composition of a population
such that there is an increase in the proportion of older persons.
Demographers use age/sex pyramids to illustrate the distribution of
populations across all age groups.
84
An ageing population is one where the proportion of older people is Aspects of Human
increasing. This is also known as ‘demographic ageing’ and ‘population Development - I
ageing’.
Population ageing is an increasing median age in a population due to
declining fertility rates and rising life expectancy. Most countries have
rising life expectancy and an ageing population (trends that emerged first
in developed countries, but which are now seen in virtually all developing
countries).
Population ageing is a shift in the distribution of a country's population
towards older ages. This is usually reflected in an increase in the
population's mean and median ages, a decline in the proportion of the
population composed of children, and a rise in the proportion of the
population composed of elderly. Population ageing is widespread across
the world. It is most advanced in the most highly developed countries, but
it is growing faster in less developed regions, which means that older
persons will be increasingly concentrated in the less developed regions of
the world.

7.6.3 Why do populations age?

Population ageing arises from two (possibly related) demographic effects
which are increasing longevity and declining fertility. An increase in
longevity raises the average age of the population by increasing the
numbers of surviving older people. A decline in fertility reduces the
number of babies, and as the effect continues, the numbers of younger
people in general also reduce. Of these two forces, it is declining fertility
that is the largest contributor to population ageing in the world today.
More specifically, it is the large decline in the overall fertility rate over the
last half century that is primarily responsible for the population ageing in
the world's most developed countries. Because many developing countries
are going through faster fertility transitions, they will experience even
faster population ageing than the currently developed countries in the
future.
Factors that can impact population age distribution include :
 Life expectancy increases due to improved lifestyle (diet, exercise,
not-smoking) and importantly, access to quality health care — drugs,
treatments, expertise, surgical procedures, technology.
 Birth rate decline itself is driven by a number of factors:
 Improved availability, education and effectiveness of contraceptive
measures
 The rising costs of living influencing people’s decisions whether to
have children and how many
 Increasing number of women working

85
Economics of Human  Changing social attitudes (for example acceptance of alternative
Development lifestyles, including choosing not to have children)
 The rise of individualism
 Lack of inward migration (fewer younger people and families moving
to a given country, thereby reducing the average age)
 Most of the developed countries now have sub-replacement fertility
levels, and population growth now depends largely on immigration
together with population momentum, which also arises from previous
large generations now enjoying longer life expectancy.
WHO is working on three areas with a direct impact on ageing:
 prevention of chronic disease;
 access to age-friendly primary health care;
 creation of age-friendly environments

7.6.4 What roles do older people take on in society?

Advantages of an Older Population :
1. There are some economic advantages to having an older population.
For example, since older people have higher accumulated savings per
head than younger individuals do, a large aged population can result in
lower interest rates as well as a lower rate of inflation. Older people
spend less on consumer goods. An ageing population may thus result
in lower interest rates and the economic benefits of lower inflation.
Elderly people are more inflation averse, countries with more elderly
tend to exhibit lower inflation rates.

2. More precise analysis and research show that having an ageing

population is often advantageous in terms of lower health care costs in
later years of life and other beneficial contributions to the community.

3. Some studies show that it is more likely that health care expenditure
on the last year of life decreases with age, as the elderly cannot
physically endure extensive medical procedures. Nevertheless, the
shift of dependent elderly people from hospitals to residential and
nursing homes will minimize health care costs as it transfers the
expenditure from health care to social care funds.

4. An ageing population may provide incentive for technological

progress, as some hypothesise the effect of a shrinking workforce may
be offset by technological unemployment or productivity gains. Some
economists (Japan) see advantages in such changes, notably the
opportunity to progress automation and technological development
without causing unemployment. They emphasise a shift from GDP to
personal well-being.

86
5. The ageing population also makes positive contributions to the Aspects of Human
community through their services. Some studies have shown that ,as Development - I
the life expectancy has drastically increased, most of the baby boomers
will retire while they are still physically and mentally healthier than
preceding generations, and given appropriate incentives will be willing
to work and contribute to tax revenue . In the past women provided
much of the volunteer work in the community, compared to today
where woman are in the work force in increasing numbers. At this
time when the contribution of volunteer workers is becoming
increasingly applicable to our community, many health and welfare
agencies are seeking to hire from the growing number of retirees.
6. Voluntary services are a measure of social capital and an indication of
a healthy civil society. It has been commonly observed that majority of
volunteers tend to be elderly. Therefore, through volunteer services,
the elderly substantially minimizes government expenditure on
welfare, aid their families with childcare and find satisfaction in
providing various other charitable services. Volunteering is regarded
as one measure of social capital and thus an indicator to a healthy civil
society.

7. The older generation are actively involved in the community as being

members of clubs, recreation centres etc. They also attend musical
concerts, theatres and art galleries more frequently than younger
people, read more and visit libraries more often. Thus, it is probable
that the arts and culture will benefit from an older people.

8. As a general rule, it is likely that older communities will become more

law abiding, since older people are less inclined to commit crimes.This
indicates that there will be less likely to be crime altogether, resulting
in money being saved in prisons and policing costs in the future. This
is because most of the baby bombers will be well over 65 and an older
community is less likely to commits crimes against property and
people.

9. Older people tend to play a role in supporting and maintaining

informal social networks, which in turn bind communities and families
together. Older people are said to be net providers (up to the age of 75
years old). This is due to the fact that they provide childcare, financial,
practical and emotional assistance to family members including
helping people outside the household with the tasks of daily living.

10. Grandparents now play an important social role in a time where people
tend to have more living parents than children. This benefits
grandparents directly whom find that this is an important aspect of
their lives and makes them feel fulfilled. Not only does it benefit the
grandparents, but also their grandchildren considerably.

11. In addition, the ageing population gives opportunities for the economy
to respond to the needs of the older generation, by creating more jobs.
A study on consumerism indicates that the consumer will spend
87
Economics of Human considerably less on non-essential items and substitute to more
Development essential items like spending money on grandchildren, leisure and
recreation

7.6.5 Disadvantages of an Older Population :

The ageing population will have various impacts and in particular the
effect it has on economics is something that is being considered very
closely by the government, so that they can develop schemes and policies
in order to solve imbalances in the economy.The elderly proportion of the
population is growing around the world, but it is greater in developed
countries.

7.6.6 Main impact of an ageing population :

1. Increase in the dependency ratio. If the retirement age remains fixed,
and the life expectancy increases, there will be relatively more people
claiming pension benefits and fewer people working and paying
income taxes. The fear is that it will require high tax rates on the
current, shrinking workforce.
2. Increased government spending on health care and pensions. Also,
those in retirement tend to pay lower income taxes because they are
not working. This combination of higher spending commitments and
lower tax revenue is a source of concern for many governments –
especially those with existing debt issues and unfunded pension
schemes. The fiscal gap represents an imbalance in revenue and
expenditure of the government. It would require the government to
increase spending on health care and pensions, whilst older people pay
lower income taxes as they are not working. A combination of these
factors will have a negative impact on the economy, as it will find
itself further in debt.
3. Those in work may have to pay higher taxes. This could create
disincentives to work and disincentives for firms to invest. Therefore,
there could be a fall in productivity and growth.
4. Shortage of workers. An ageing population could lead to a shortage of
workers and hence push up wages causing wage inflation.
Alternatively, firms may have to respond by encouraging more people
to enter the workforce, through offering flexible working practices.
5. Changing sectors within the economy. An increase in the numbers of
retired people will create a bigger market for goods and services linked
to older people (e.g. retirement homes)
6. Higher savings for pensions may reduce capital investment. If society
is putting a higher % of income into pension funds, it could reduce the
amount of savings available for more productive investment, leading
to lower rates of economic growth.
7. There are many social issues associated with the ageing population,
including the decline in workforce participation and the increasing
burden of disability and ill health in the elderly. These issues need to
88
 be addressed immediately by the government as they are going to Aspects of Human
placing a greater burden on the future economic and health systems of Development - I
a country.
8. A substantial aged population leads to a lot of financial pressure on
both the public and private sectors.
9. Social security systems have also begun to experience problems.
Earlier defined benefit pension systems are experiencing sustainability
problems due to the increased longevity. The extension of the pension
period was not paired with an extension of the active labour period or
a rise in pension contributions, resulting in a decline of replacement
ratios.
7.6.7 Evaluation of an ageing population :
 A declining birth rate also means a smaller number of young people.
This will save the government money because young people require
education and pay little, if any, taxes. Though the net cost of retired
people is greater than the net cost of young people under 18.
 It depends on the health and mobility of an ageing population. If
medical science helps people live longer, but with poor mobility, there
will be less chance to work. If people live longer and can remain
physically active for longer, the adverse impact will be less.
 Immigration could be a potential way to defuse the impact of an
ageing population because immigration is primarily from people of
working age. However, immigration brings its own political challenges
and has become increasingly unpopular, despite net migration creating
a positive net fiscal effect.
 Increasing the retirement age is one solution to an ageing population.
But, the effect of a higher retirement age will not be felt equally.
Those with private savings may be able to still retire early, those with
low income paid jobs are more likely to have to keep working. Also,
the impact of longer working life will be felt more by manual workers
who will find it harder to keep working.
 Population demographics have been shifting for the past few centuries.
This is not the first time we have had shifts in the age profile of the
population.
 Incentives to keep working? Part of the problem is that there is
currently a strong incentive for people to retire early. The effective
marginal tax rate imposed on earnings resulting from delayed
retirement has in many systems been in excess of 60 percent (link)
These incentives have encouraged many to take early retirement. Also,
there is often a rule prohibiting people working longer – even if they
wanted to. If these incentives can be changed, we could increase the
number of people working for longer and reduce the dependency
burden.

89
Economics of Human  Economic growth. A big factor in determining the impact of an ageing
Development population is future rates of economic growth. There is a concern, as
some economies have entered a period of secular stagnation – falling
growth rates. This decline in economic growth will increase the
pressure on public finances from an ageing population. Strong
economic growth, increases tax revenues and makes it easier to fund
pension commitments.

 Inequality. Another problem with an ageing population is that it could

exacerbate inequality. With increased reliance on private sector
savings, there could be a division between those with a good private
sector pension, and those who rely on a diminishing state pension.
Also, inequality could be exacerbated by the state of the housing
market, with homeowners in a much better position than those who
have to continue to rent into their retirement.

7.6.8 Government responses to an ageing population:

1. Increase the labour market participation rate. Make it easier for people
past 65 to keep working.
2. Raise the retirement age. The government have already proposed an
increase to 67. The retirement age could automatically be linked to life
expectancy.
3. Increase the importance of the private sector in providing pensions and
health care. However, this may cause increased inequality if people
can’t afford private pensions.
4. Increase tax to pay for pension costs. But, many governments already
have limited budgets.
5. Immigration. The easiest solution to an ageing population is to
encourage young migrants of working age. For example, the UK has
attracted many young workers from Eastern Europe. But, net
migration and free movement of labour is unpopular for fears it drives
down wages and places stress on infrastructure and housing demand.

7.6.9 Conclusion:
The elderly are a crucial part of the community and they contribute both
knowledge and experience beyond their years. An aged population puts
endless economic stress on the nation, as health care funding and
superannuation requires exponential funding, as general living cost
continue to rise. With such a large proportion of the population as
classified as elderly, it is hard to overlook the long list of disadvantages.
The expectation of continuing population ageing prompts questions about
welfare states’ capacity to meet the needs of their population. In the early
2000s, the World Health Organization set up guidelines to encourage
“active ageing” and to help local governments address the challenges of an
ageing population with regard to urbanization, housing, transportation,
social participation, health services, etc. Local governments are well
90
positioned to meet the needs of local, smaller populations, but as their Aspects of Human
resources vary from one to another (e.g. property taxes, the existence of Development - I
community organizations), the greater responsibility on local governments
is likely to increase inequalities. Also, the environmental gerontology
indicates the importance of the environment in active ageing. In fact,
promoting good environments (natural, built, social) in ageing can
improve health and quality of life, as well as reduce the problems of
disability and dependence, and, in general, social spending and health
spending.

7.7 POVERTY ALLEVIATION

Poverty Alleviation is the set of steps taken in an economic and
humanitarian way for eradicating poverty from a country. According to
the World Bank, if a person is living on $1.90 a day or less, then he/she is
living in extreme poverty, and currently, 767 million people of the world
fall under that category. According to the last released official data, in
2011, 268 million people in India were surviving on less than $1.90 a day.
Various Programmes and Schemes under the Government of India were
launched to eradicate poverty and for providing basic amenities to the
poor households.
Schemes like Pradhan Mantri Awas Yojana and Housing for All by 2022
were developed to provide housing to the rural and urban poor. The latest
government schemes like Start-Up India and Stand Up India focuses on
empowering people to earn their livelihood.
The major Poverty Alleviation Programmes that were developed with an
initiative to eradicate poverty are mentioned in the table below:

Name of the Year of Government Objectives

Scheme/ Formation Ministry
Programme

Integrated 1978 Ministry of  To raise the families

Rural Rural of identified target
Development Development groups living below
Programme the poverty line
(IRDP) through the
development of
sustainable
opportunities for self-
employment in the
rural sector.

Pradhan 1985 Ministry of  To create housing

Mantri Rural units for everyone
GraminAwaa along with providing

91
Economics of Human 13 lakhs housing units
s Yojana Development
Development
to the rural areas.
 To provide loans at
subsidized rates to the
people.
 To augment wage
employment
opportunities to the
households by
providing
employment on-
demand and through
specific guaranteed
wage employment
every year.

Indira Gandhi 15th Ministry of  To provide pension to

National Old August Rural the senior citizens of
Age Pension 1995 Development India of 65 years or
Scheme higher and living
(NOAPS) below the poverty
line.
 It provides a monthly
pension of Rs.200 for
those aged between
60-79 years and
Rs.500 for the people
aged above 80 years.

National August Ministry of  To provide a sum of

Family 1995 Rural Rs.20,000 to the
Benefit Development beneficiary who will
Scheme be the next head of
(NFBS) the family after the
death of its primary
breadwinner.

Jawahar 1st April Implemented  Developing the

Gram 1999 by the infrastructure of the
Samridhi Village rural areas which
Yojana Panchayats. included connecting
(JGSY) roads, schools, and
hospitals.

92
  To provide sustained Aspects of Human
Development - I
wage employment to
the families belonging
to the below poverty
line.

Annapurna 1999-2000 Ministry of  To provide 10 kg of

Rural free food grains to the
Development eligible senior citizens
who are not registered
under the National
Old Age Pension
Scheme.

Food for 2000s Ministry of  It aims at enhancing

Work Rural food security through
Programme Development wage employment.
Food grains are
supplied to states free
of cost, however, the
supply of food grains
from the Food
Corporation of India
(FCI) godowns has
been slow

SampoornaGr – –  The main objective of

aminRozgar the scheme continues
Yojana to be the generation of
(SGRY) wage employment,
creation of durable
economic
infrastructure in rural
areas and provision of
food and nutrition
security for the poor.

Mahatma 2005 Ministry of  The Act provides 100

Gandhi Rural days assured
National Development employment every
Rural year to every rural
Employment household. One-third
Guarantee of the proposed jobs
Act would be reserved for
(MGNREGA) women. The central
government will also
93
Economics of Human establish National
Development
Employment
Guarantee Funds.
 Similarly, state
governments will
establish State
Employment
Guarantee Funds for
implementation of the
scheme. Under the
programme, if an
applicant is not
provided employment
within 15 days s/he
will be entitled to a
daily unemployment
allowance.

National Food 2007 Ministry of  To increase

Security Agriculture production of rice,
Mission wheat, pulses and
coarse cereals through
area expansion and
productivity
enhancement in a
sustainable manner in
the identified districts
of the country

National 2011 Ministry of  It evolves out the need

Rural Rural to diversify the needs
Livelihood Development of the rural poor and
Mission provide them jobs
with regular income
on a monthly basis.
Self Help groups are
formed at the village
level to help the needy

National 2013 Ministry of  It focuses on

Urban Housing and organizing urban poor
Livelihood Urban in Self Help Groups,
Mission Affairs creating opportunities
for skill development
leading to market-
based employment
94
 and helping them to Aspects of Human
Development - I
set up self-
employment ventures
by ensuring easy
access to credit

Pradhan 2014 Ministry of  It aimed at direct

Mantri Jan Finance benefit transfer of
Dhan Yojana subsidy, pension,
insurance etc. and
attained the target of
opening 1.5 crore
bank accounts. The
scheme particularly
targets the unbanked
poor

Pradhan 2015 Ministry of  It will focus on fresh

Mantri Skill entrant to the labour
Kaushal Development market, especially
Vikas Yojana and labour market and
Entrepreneur class X and XII
ship dropouts

SaansadAadar 2014 Ministry of  To develop the

sh Gram Rural institutional and
Yojana development physical infrastructure
(SAGY) in three villages by
2019. The scheme
aims to develop five
‘Adarsh Villages’ or
‘Model Villages’ by
2024.

Pradhan 2015 Ministry of  The scheme provides

Mantri Jeevan Finance life coverage to the
Jyoti Bima poor and low-income
Yojana section of the society.
The scheme offers a
maximum assured
amount of Rs.2 lakhs

95
Economics of Human
Development
Pradhan 2015 Ministry of  The scheme is an
Mantri Finance insurance policy to
Suraksha the people belonging
Bima Yojana to the underprivileged
sections of the society

National 2016 Ministry of  To provide a sum of

Maternity Health & Rs.6000 to a pregnant
Benefit Family mother who is aged
Scheme Welfare above 19 years.
(MoHFW)
 The sum is provided
normally 12–8 weeks
before the birth in
three instalments and
can also be availed
even after the death of
the child.

Pradhan 2016 Ministry of  It envisages the

Mantri Petroleum distribution of 50
Ujjwala and Natural million LPG
Yojana Gas connections to women
(PMUY) below the poverty line

Pradhan 2016 Ministry of  the scheme provides

Mantri Garib Finance an opportunity to
Kalyan declare unaccounted
Yojana wealth and black
(PMGKY) money in a
confidential manner
and avoid prosecution
after paying a fine of
50% on the
undisclosed income.
An additional 25% of
the undisclosed
income is invested in
the scheme which can
be refunded after four
years, without any
interest.

96
 Aspects of Human
Development - I
Solar Charkha 2018 Ministry of  It aims at
Mission Micro, Small Employment
and Medium generation for nearly
Enterprises one lakh people
(MSME) through solar charkha
clusters in rural areas

National 2018 Ministry of  to reduce the level of

Nutrition Women and under-nutrition and
Mission Child also enhance the
(NNM), Development nutritional status of
Poshan children in the
Abhiyan country. Also, to
improve the
nutritional outcomes
of adolescents,
children, pregnant
women and lactating
mothers

Pradhan 2019 Ministry of  It is a central

Mantri Shram Labour and government scheme
Yogi Maan- Employment that is introduced for
Dhan (PM- old age protection and
SYM) social security of
Unorganised Workers
(UW)

Prime 2020 Ministry of  It aims to provide

Minister Housing and micro-credit facilities
Street Urban to street vendors
Vendor’s Affairs affected due to
AtmaNirbhar (MoHUA) COVID-19 pandemic
Nidhi – PM
SVanidhi

7.8 FOOD SECURITY

7.8.1 Introduction:
There is evidence of food security being a concern many thousands of
years ago, with central authorities in ancient China and ancient
Egypt being known to release food from storage in times of famine. At the
1974 World Food Conference the term "food security" was defined with
97
Economics of Human an emphasis on supply; food security is defined as the "availability at all
Development times of adequate, nourishing, diverse, balanced and moderate world food
supplies of basic foodstuffs to sustain a steady expansion of food
consumption and to offset fluctuations in production and prices".

7.8.2 Definition :
Food security is a measure of the availability of food and
individuals' ability to access it. According the United Nations’ Committee
on World Food Security, food security is defined as the means that all
people, at all times, have physical, social, and economic access to
sufficient, safe, and nutritious food that meets their food preferences and
dietary needs for an active and healthy life. The availability of food
irrespective of class, gender or region is another one.
Later definitions added demand and access issues to the definition. The
final report of the 1996 World Food Summit states that food security
"exists when all people, at all times, have physical and economic access to
sufficient, safe and nutritious food to meet their dietary needs and food
preferences for an active and healthy life. It declared that "food should not
be used as an instrument for political and economic pressure". Different
international agreements and mechanisms have been developed to address
food security. The main global policy to reduce hunger and poverty is in
the Sustainable Development Goals. In particular Goal 2: Zero
Hunger sets globally agreed on targets to end hunger, achieve food
security and improved nutrition, and promote sustainable agriculture by
2030.
Commonly, the concept of food security is defined as including both
physical and economic access to food that meets people's dietary needs as
well as their food preferences. Household food security exists when all
members, at all times, have access to enough food for an active, healthy
life.
Food security incorporates a measure of resilience to future disruption or
unavailability of critical food supply due to various risk factors including
droughts, shipping disruptions, fuel shortages, economic instability, and
wars.
 Food stability: Refers to the ability to obtain food over time.
 Food access: Refers to the affordability and allocation of food, as well
as the preferences of individuals and households.
 Food availability: Relates to the supply of food through production,
distribution, and exchange.
Household food security exists when all members, at all times, have
access to enough food for an active, healthy life. Individuals who are food
secure do not live in hunger or fear of starvation. Food insecurity, on the
other hand, is defined by the United States Department of
Agriculture (USDA) as a situation of "limited or uncertain availability of

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 nutritionally adequate and safe foods or limited or uncertain ability to Aspects of Human
acquire acceptable foods in socially acceptable ways". The Food and Development - I
Agriculture Organization of the United Nations, or FAO, identified the
four pillars of food security as availability, access, utilization, and
stability.
Dr. M.S. Swaminathan defined food security as,” Livelihood Security for
the households and all members within, which ensures both physical and
economic access to balanced diet, safe drinking water, environmental
sanitation, primary education and basic health care.” Dr. Swaminathan
gives broader definition of food security which goes beyond the physical
availability and economic areas of food.
From the above definitions we can analyze important aspects involved in
food security as
I. Physical availability of food to all the people
II. Economic access to basic food, that is people must have the
purchasing power to obtain required quantity of food
III. Basic food involves those food items providing nutritional food
requirements.
IV. All time availability implies physical and economics availability not
at one particular period but both in short and long run. Non-availability
must be an exception due to uncertainty beyond human management.
For this it is necessary that supply of food must be enough to take care
of growth in population.
V. Enough food for an active healthy life involves a qualitative change
over a period of time. As income rises, the purchasing power in the
hands of the people also rises. Thus, the basket of food they would like
to purchase also undergoes a change in its composition.

7.8.3 Measurement :
Food security can be measured by calories to digest out to intake per
person per day, available on a household budget. In general, the objective
of food security indicators and measurements is to capture some or all of
the main components of food security in terms of food availability,
accessibility, and utilization/adequacy. While availability (production and
supply) and utilization/adequacy (nutritional status/anthropometric
measurement) are easier to estimate and, therefore, more popular,
accessibility (the ability to acquire the sufficient quantity and quality of
food) remains largely elusive. The factors influencing household food
accessibility are often context-specific.
Several measurements have been developed to capture the access
component of food security, with some notable examples developed by the
USAID-funded Food and Nutrition Technical Assistance (FANTA)
project, collaborating with Cornell and Tufts University and Africare and
World Vision. These include:

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Economics of Human  Household Food Insecurity Access Scale (HFIAS) – continuously
Development measures the degree of food insecurity (inaccessibility) in the
household in the previous month
 Household Dietary Diversity Scale (HDDS) – measures the number of
different food groups consumed over a specific reference period
(24hrs/48hrs/7days).
 Household Hunger Scale (HHS)- measures the experience of
household food deprivation based on a set of predictable reactions,
captured through a survey and summarized in a scale.
 Coping Strategies Index (CSI) – assesses household behaviors and
rates them based on a set of varied established behaviors on how
households cope with food shortages. The methodology for this
research is based on collecting data on a single question: "What do you
do when you do not have enough food, and do not have enough money
to buy food?"

7.8.4 Things affecting food security today include :

 Global Water Crisis - Water table reserves are falling in many
countries (including Northern China, the US, and India) due to
widespread over-pumping and irrigation.
 Climate Change - Rising global temperatures are beginning to have a
ripple effect on crop yields, forest resources, water supplies and
altering the balance of nature.
 Land Degradation - Intensive farming leads to a vicious cycle of
exhaustion of soil fertility and decline of agricultural yields.
 Greedy Land Deals - Corporations and Governments buying rights to
millions of acres of agricultural land in developing countries to secure
their own long-term food supplies.
 New shocks related to climate change, conflict, pests (such as locusts
and Fall Army Worm) and infectious diseases (such as COVID-19 and
African Swine Fever) are hurting food production, disrupting supply
chains and stressing people’s ability to access nutritious and affordable
food, raising fresh concerns for food security in 2020
 Food insecurity can worsen diet quality and increase the risk of
various forms of malnutrition, potentially leading to undernutrition as
well as overweight and obesity. The cost of healthy diets is
unaffordable for more than 3 billion people in the world.
 One third of food produced globally is either lost or wasted.
Addressing food loss and waste is critical to improving food and
nutrition security, as well as helping to meet climate goals and reduce
stress on the environment.
 The widespread incidence of microbiological, chemical or other
hazards in food also continues to be a serious issue for the food
system.Unsafe food not only represents a serious public health
concern, but also negatively impacts the incomes of farmers, the
livelihoods of food vendors, and the continuity of business and trade.
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 Poor nutrition, food loss and waste, and food-borne illness all impose Aspects of Human
Development - I
large current and future human, economic, social, and fiscal costs on
countries. Reducing these costs requires multi-pronged approaches:
There is great potential for effective interventions throughout the food
system.
 With the right investments and resources, agriculture and food systems
can provide adequate, affordable, safe and nutritious food to everyone,
everywhere, every day – even in times of crisis.

7.8.5 Strategy :
The World Bank Group works with partners to build food systems that can
feed everyone, everywhere, every day by improving food security,
promoting ‘nutrition-sensitive agriculture’ and improving food safety. The
Bank is a leading financier of food systems. In 2020, there was US$5.8
billion in new IBRD/IDA commitments to agriculture and related sectors.

Activities include :

 Strengthening safety nets to ensure that vulnerable families have

access to food and water–and money in their pockets to make vital
purchases

 Delivering expedited emergency support by fast-tracking financing

through existing projects to respond to crisis situations
 Engaging with countries and development partners to address food
security challenges. Instruments include rapid country diagnostics and
data-based monitoring instruments and partnerships such as the
Famine Action Mechanism and the Agriculture Observatory

 Promoting farming systems that use climate-smart techniques, and

produce a more diverse mix of foods, to improve food systems’
resilience, increase farm incomes and enable greater availability and
affordability of nutrient-dense foods

 Improving supply chains to reduce post-harvest food losses, improve

hygiene in food distribution channels, and better link production and
consumption centers

 Applying an integrated “One Health” approach to managing risks

associated with animal, human and environmental health
 Supporting investments in research and development that enable
increasing the micronutrient content of foods and raw materials
 Advocating for policy and regulatory reforms to improve the
efficiency and integration of domestic food markets and reduce
barriers to food trade

 Working with the private sector, government, scientists, and others to

strengthen capacities to assess and manage food safety risks in low and
middle-income countries
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Economics of Human
Development
 Supporting long-term global food security programs: The Bank houses
the Global Agriculture and Food Security Program (GAFSP), a global
financing instrument that pools donor funds and targets additional,
complementary financing to agricultural development across the entire
value chain. Most recently, in response to the ongoing COVID-19
pandemic, GAFSP allocated over $55 million of additional grant
funding to on-going public sector and producer organization-led
projects to support COVID-19 response and recovery.

 The Bank also supports the CGIAR which advances agriculture

science and innovation to boost food and nutrition security globally.

7.8.6 Results :
In Bangladesh, a World Bank project increased the agricultural
productivity of selected crops (rice, wheat, lentil, mung, and mustard),
livestock (dairy cows, chicken, and ducks), and fisheries (tilapia, koi, and
pangus) in economically depressed areas that are vulnerable to impacts of
climate change.
In India, women's self-help groups, supported under the National Rural
Livelihood Mission co-financed by the World Bank, have mobilized to
meet shortages in masks and sanitizers, run community kitchens and
restore fresh food supplies, provide food and support to vulnerable and
high-risk families, provide financial services in rural areas, and
disseminate COVID-19 advisories among rural communities. These self-
help groups, built over a period of 15 years, tap the skills of about 62
million women across India and have proven the worth of a community-
based institutions in a time of need.
In Rwanda, a program on land husbandry, water harvesting, and hillside
irrigation aimed to better manage rainfall to prevent hillside erosion.
In Samoa, which has some of the world’s highest rates of diabetes and
heart disease, a Bank-supported project is working to improve agriculture
and health outcomes. The program has increased fruit and vegetable yields
and strengthened the connections between local farmers to markets.
In Uganda, GAFSP funding is increasing the production and consumption
of micronutrient-rich foods, including African indigenous vegetables,
high-iron beans, and orange-flesh sweet potatoes.
Indian Scenario: In India, the Central government and the State
governments have introduced several programmes to supply food to poor
people. The programmes are,

 Public Distribution System as an important constituent of food

management. It seeks to improve food security specially for
economically weaker sections of the society.
 Targetaed Public Distribution System was introduced

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7.9 QUESTIONS Aspects of Human
Development - I
1. Write an explanatory note on livelihood.
2. Define term inequalities. Explain different types of inequalities.
3. State different methods of measuring inequalities.
4. Define child labour. What are the causes of emerging problem of child
labour? State the measures to overcome the problem of child labour.
5. What are the problems faced by ageing population? Suggest the
measures to overcome the problems of ageing of population.
6. Write an explanatory note on Poverty Alleviation Programme.
7. What is food security? Explain various aspects related to food security.





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 8
ASPECTS OF HUMAN DEVELOPMENT– II

Unit Structure :
8.0 Objectives
8.1 Displacement
8.2 Indigenous Group
8.3 Migration
8.4 Education And Health
8.5 Workers And Informal Sector
8.6 Social Security
8.7 Human Security
8.8 Questions

8.0 OBJECTIVES
The main objective of this module is to study and analyse the various
aspects of human development. Human development plays a very
important role in the overall economic development of the country. This
module aims at highlighting various aspects of human development like
Displacement, Indigenous Group, MigrationEducation And Health,
Workers And Informal Sector, Social Security and Human Security etc.

8.1 DISPLACEMENT
Development refers to the social, economic, political, and cultural changes
in the human societies. The governments of the nation accelerate the
process of development by undertaking development projects to improve
the quality of life of its people. Development has become the founding
belief of the modern world. Development has become the life line of every
economy. Development in actual sense should mean, using the productive
resources of the society to improve the living conditions of the poor. On
other hand it means economic growth, through the establishment of
industries, dams, irrigation projects, highways, hospitals, educational
institutions, etc. But the development never goes single handed. For
undertaking development projects, it is necessary to acquire land from the
individuals in the locality where the project is being established. In the
process of land acquisition, a sizeable number of affected people lose their

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homes and hearts and get physically displaced. Thus, development is Human Development – II
always accompanied by forced displacement.
Displacement is caused as a result of the development paradigm, causing
cultural, identarian crisis for a large number of social categories, in which
tribal, backward castes etc. have become the major victims. It is often
argued that the establishment of such projects is necessary for the
development of our nation. This is true. But the social cost due to
displacement needs serious attention.
Every human development dimension can be affected by internal
displacement. Displacement can reduce access to employment,
healthcare and education, with long-term consequences on the well-being
and economic potential of all affected.
Development-induced displacement occurs when populations are evicted
from their homes either to enable the construction of large-scale
development projects such as dams, roads, power plants, mines, or
irrigation schemes; or as part of government policies related to urban
development and population redistribution (Robinson,2003).
Development- induced displacement has come to stay with the LPG model
(Liberalization, Privatization and Globalization). Development in actual
sense should mean, using the productive resources of the society to
improve the living conditions of the poor.
Human development requires expanding people s capabilities for living
decent lives and enhancing their opportunities for economic, social and
political empowerment. Human Development is about people, about
expanding their choices to live full, creative lives with freedom and
dignity. Economic growth, increased trade and investment and
technological advance are all very important. The most basic capabilities
for human development are living along and healthy life, being educated,
having a decent standard of living and enjoying political and civil
freedoms to participate in the life of one s community.
So now the question arises can the development projects and human
development go hand in hand? In many cases it is seen a region with
higher development projects is facing a retarded human development.
Dislocation breaks up living patterns and social continuity. It dismantles
existing modes of production, disrupts social networks, causes deprivation
along with impoverishment of many of those uprooted, threatens their
cultural identity, and increases the risks of epidemics and health problems.
Forced displacement includes the dismantling of traditional production
systems, desecration of ancestral sacred zones, graves and places of
worship, scattering of kinship groups, disruption of family systems
and informal social network (Kothari, 1995). The development
projects give priority to economic efficiency rather than to the wellbeing
of the people affected or displaced by them. Forced resettlement carries

105
Economics of Human severe risks of impoverishing the uprooted people, many of whom are
Development very poor even before displacement.
In the name of development, basically the poor and the tribes are
displaced from their traditional habitats and livelihoods with little or no
rehabilitation, and are rendered destitute, bewildered and pauperized
by the development process. They are pushed into vortex of increasing
asset lessness, unemployment debt bondage and hungry due to loss of
access to traditional sources of livelihood viz., land, forest, rivers,
pastures, cattle etc.
Apart from the loss of land, living and lifestyle, displacement causes
other traumatic, psychological and socio-cultural consequences,
making their life more miserable and impoverished, surrounded by all
round deprivation.
The major among the negative outcomes is the industry- induced
displacement. If we consider displacement as the factor responsible for
causing impoverishment and deprivation, then the maximum of the
impoverishment is caused due to industrialization-induced displacement.
Since it create a vicious circle of displacement, beginning with acquisition
of land for the establishment of industry and culminating in mass
slums, the existence of slum in every industrial city is a sufficient
testimony to this fact. Unplanned resettlement programmes lead to the
creation of slum with insufficient water, electricity and sanitation systems.
Due to packed living and congestion in slums the diseases are easily
transmitted. Along with this, poor sanitation and lack of availability of
drinking water causes various vector borne diseases like dengue, malaria,
chikungunia and wate borne diseases like dysentery, cholera, jaundice,
typhoid, etc. These diseases affect the industrial cities with increasing
ferocity, largely because of the water storage methods that create an
environment for the dengue mosquito to proliferate. Large ash ponds of
various power plants and their peripheral wetlands also provide a heaven
like place for this dreaded mosquito. Solid waste, which is frequently,
dumped in urban and industrial areas, present an ideal mosquito
breeding sources after accumulation of rain water in these containers. The
industrialization-induced displacement has caused exploitation of mineral
resources and industrial activities have resulted in high level of air
pollution, soil pollution, and surface water contamination, and
accumulation of industrial wastes. Highest air and soil pollution
correspond with the highest infant mortality rates and incidence of
respiratory system diseases. Acute respiratory infection is one of the three
major causes of infant mortality (the other two being diarrhoea and
malnutrition).
There is occurrence of elevated blood lead levels, with the place of
industrial residence and the intensity of vehicular traffic, caused due to
non-stop transportation.

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i) Deprivation of land : Human Development – II
Land is the main foundation on which many people build productive
systems, commercial activities, and livelihoods. Expropriation of land
causes loss of both the natural and man-made capital. The Land
Acquisition Act of 1894, allows displacement for undefined public
purposes without the consent of the people affected. However, in
reality, people are cultivating most of the government land for
generations, for which they have no written evidences (patta) for that,
which makes an accelerated displacement work without any thorns
leading to deprivation of land. In other words the displacees
experience a downward mobility in their cultivator status. Most big
farmers become medium, the medium farmers become small and small
and marginal farmers become landlessness, thereby affecting the human
development.
ii) Deprivation of home :
Many of the displaced persons or the project affected people, own
only homestead land. Thus, displacement leads to deprivation of
home. Often, the incidence of the deprivation increases if the
compensation for demolished dwellings is paid at assessed market value
than replacement value.
iii) Deprivation of job :
Work is an important feature of human existence; it is the means of
sustaining life and of providing means for the attainment of human
capabilities. Work is regarded as the productive toil in which rights
are respected, security and protection are provided. But, displacement
causes deprivation of job through lack of access to work and the
downward occupational mobility. People deprived of jobs may be
landless agricultural labourers, service workers, or artisans.
iv) Deprivation of food :
Displacement diminishes self- sufficiency, dismantles local
arrangements for food, and thus deprives people of food. After
rehabilitation and resettlement also, the quality of land given is so poor
that the displacees could not grow enough food.
v) Social deprivation :
Displacement leads to social deprivation by uprooting theircommunities,
social organization, local associations and entire villages and thereby
destroying long established social networks. The displaced persons who
lived in an Informal society are forced to interact with another culture and
society to which they cannot always adapt themselves. The deprivation is
multiplied when, in the newly located area they are regarded as strangers
and are denied of opportunities and entitlement. They are forced to
maintain a materialistic life, and lose their social contact, traditional life
style and try to imitate the urban ways of living. Such insecurity results in
marginalization or what Cernea calls social disarticulation which acts as
thorn in the path of human development, through disempowerment.

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Economics of Human vi) Economic deprivation :
Development A major component of human development is economic security and
development-induced displacement denies it to the displaced persons
by curtailing their access to natural resources on which their communities
depend. The displaced persons due to lack of land, job, food, home
aremarginalised and fall below poverty thresholds.
vii) Deprivation of common property :
The displaced persons are basically dependent on the common
property resources for their livelihoods. Through displacement they are
deprived of forest land, grazing land, burial ground, waste land, socio-
cultural places, common public services, approach roads, drinking
water sources, and village deity/religious places. Forests, acts as a natural
insurance which protects basically the tribal s against crop failure
due to natural hazards (Mahapatra 1999). This deprivation represents a
form of income loss and livelihood deterioration that is typically
overlooked by planners and therefore uncompensated.
viii) Destruction in self-dependence :
Deprivation of land causes destruction in self dependence as Land is the
main foundation on which many people build productive systems,
commercial activities, and livelihoods.
ix) Low access to education :
Education is the base to every development; be it human development or
social or economic development. But, landlessness, joblessness,
homelessness, marginalization and social disarticulation cause a low
access to education among the displaced persons. Besides this, before
displacement the schools were close to the village, so most children
were at school. Under rehabilitationprogramme, land and houses were
given but no schools. By the time schools were built, the children had lost
the habit of going to school and were engaged in household activities.
x) Creation of urban poverty :
Basically, the urban poverty is created by the rural poors or the
displaced persons who are forced to migrate to urban areas without any
livelihood at their own land to access. And adding to the woes, the urban
areas don t have the accommodating designs for these displaced
persons. Once upon a time those who were land owners are now
landless poors of cities due to their deprivation of land and job.
xi) Impoverishment of the existing poverty :
By impoverishment we mean not the relative economic deprivation or
poverty in which many of them lived prior to their displacement, but
“new poverty” caused by the alienation of their sustenance. As stated
above, it begins with landlessness and slowly turns into joblessness, loss
of income, lack of access to health care and to education and into other
forms of deprivation.

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xii) Negative impact on health : Human Development – II
Health security is another area of concern for human development.
Health depends to a great extent on nutrition, clean water and air.
Deprivation by development projects causes food insecurity and health
insecurity. Displacement threatens to cause serious decline in health
levels. Displacement- induced social and economic stress and
psychological trauma are sometimes accompanied by the outbreak of
relocation related illness.
xiii) Generation of child labour :
Deprivation of land and job causes economic deprivation. The
displaced persons loose access to their income. In the absence of other
sources they had to turn their children into child labourers in order
to earn an income. More than that children lose access to schools
and to supplement the household income go for doing odd jobs, either the
household jobs or the industrial labourers.
xiv) Downward economic and social mobility of women :
Many times it is seen that women work in their land. When women are
deprive of this land, their status declines. After displacement
joblessness is higher among women than among men. Forced
displacement is a traumatic experience. It reduces women to being
housewives alone depending on the man s single salary, the part of
which is spent on alcohol. Men increase drinking as a coping
mechanism, which is the reason for domestic violence and women fall
prey to it. And, basically the women are attached with the family and
community bonds. But, due to displacement, the well knit social fabric
completely shatters. There occurs serious disruption of family bonds.
This emotionally marginalizes the women. Other than that women face
serious crime against them like rape, polygamy, destitution by husbands,
increased dowry system etc.
xv) Insecurity of the future generation :
A minimal compensation and a job is assured to the present generation,
but what will happen to the future generation? They would be left with no
job and land as an asset. Their struggle to live will start with finding a job.
If a job not found, then they cannot go for farming also due to landlessness
as such they will be forced to go into the poverty cycle, by getting
themselves engaged as a daily labourer or a cultivator on others land. The
reason is that the development projects are not sustainable in nature.

Remedies to Reduce the Forced Displacement:

i) Comprehensive Compensation Package :
The compensation paid to the displaced persons is very minimal. It is a
mode of exploiting the poor by the elites. Thus, a comprehensive
compensation package must be followed. This implies that in case of
urban areas, the award amount would be not less than twice that of the
market value determined, whereas in rural areas it would be not less than
six times the original market value
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Economics of Human ii) A Genuine Land for Land Scheme :
Development In many compensation schemes, land is given for land. But this process is
also not fair. Rich cultivable land is taken and instead poor, non-
irrigational, infertile land is given. Basically, land is used by the poor for
the agricultural purposesonly. Land has always been a source of security
on which the poor subsist and meet their food deficits. If they are
compensated with such quality of land, then human degradation is
unavoidable. Instead of taking the land from the individual for the project
work and compensated once for all, the land should be taken on lease and
payment is made either on monthly basis or yearly or quarterly basis.
iii) A Major Role to be Undertaken by the Financial Institutions :
The compensated money should not be given all at a time. Because the
poor, illiterate, displaced population would misutilise the compensated
money.Ingeneral, the displaced population lacks the knowledge of
savings. They believe in today and don tthink of tomorrow. So, the
money is spent on alcoholism or any other unnecessary things. Otherwise,
the agricultural labourers are debt burden. In such cases, the financial
institution is to play a major role in motivating the compensated
population to go for saving and profi oriented investment, so that industry-
induced displacement would not generate aew poverty scenario, but
become the cause for human development.
iv) Education and Human Development :
Education is an essential requirement for a better and a brighter future and
also a key ingredient for human development. Education also acts as a
Human development index. In the rehabilitation and resettlement policy,
education should be emphasized. Schools should be built not so far from
the rehabilitation colony, so that it can be accessed by all. Building of
schools in the rehabilitation camp should not take so much time so that
children loosethe habit of going school.
v) Health and Human Development :
Health is an important pillar of human development. Due to their
deprivations and helplessness, they are for-bided from taking either any
preventive measures or any curative measures due to lack of access. Asthe
displaces are forced to resettle at the unhealthy rehabilitation camp, which
affects their health with a greater incidence, they are left with no option
either to move to other place as they are deprived of their homes and land
or to access medical facilities due to economic deprivation. Basically, the
resettlement plans are done in and around the industrial estates which in
the long run also affects the health of the displaced population. So,
whether it may be in the initial stage or in the long run the displaced
population sacrifices their health either due to social environment or due
to polluted natural environment. Ultimately all these will combine to
cause poor health, disease and lastly death. Socare should be taken that
proper health care facilities are provided at the rehabilitation centre. The
primary health centre should be at a reachable distance and the displaced
population should be provided with free initial treatment.

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vi) Tackling Poverty and Unemployment : Human Development – II

Poverty and unemployment is a twin problem. If there is unemployment

then the existence of poverty is unavoidable. Land is the main foundation
on which many people build productive systems, commercial activities,
and livelihoods. Expropriation of land causes loss of both the natural and
man-made capital. Forced displacement causes unemployment and
generation of new poverty (women poverty, child poverty, downward
mobility). So care should be taken by the project developers to reduce the
gender disparities, i.e., in the process of forced displacement the women
are affected the most and care should be taken to avoid child poverty.
Because due to landlessness, joblessness, the children are forced to do
work to make an additional income to the family.

CONCLUSION :
Economic development without human development is meaningless.
Development cannot be real till such failures are remedied and its benefits
reach those who pay its price. A true human development cannot be
achieved in an economy where despite the growth in the economy,
opportunities don texpand,where the benefits belong to the rich and
burden and cost falls on those at the periphery, where loss of cultural
identity as collateral damage is an issue. Development should be a holistic
concept that encompasses the progressive improvement in the quality of
human life in terms of food, clothing and shelte and conditions for healthy
living with increasing longevity oflife and happiness (RajkishorMeher,
(2009)). Basically, the development projects are focused on higher
productivity and profits and don t provide adequate employment for the
poor and marginalized displaced people. Our country is such that where
the people are poor half-starved, mal-nourished, lack skill based
education and adequate health care facilities. So,if the major challenges of
such development projects are not known, then the remedial actions
cannot be taken.

8.2 INDIGENOUS GROUP

“Indigenous and tribal peoples” is a common denominator for more than
370 million people, found in more than 70 countries worldwide. Practicing
unique traditions, they retain social, cultural, economic and political
characteristics that are distinct from those of the dominant societies in
which they live. Spread across the world from the Arctic to the South
Pacific, they are the descendants - according to a common definition - of
those who inhabited a country or a geographical region at the time when
people of different cultures or ethnic origins arrived. The new arrivals later
became dominant through conquest, occupation, settlement or other
means.
Among the indigenous peoples are those of the Americas (for example, the
Lakota in the USA, the Mayas in Guatemala or the Aymaras in Bolivia),
the Inuit and Aleutians of the circumpolar region, the Saami of northern
Europe, the Aborigines and Torres Strait Islanders of Australia and the
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Economics of Human Maori of New Zealand. These and most other indigenous peoples have
Development retained distinct characteristics which are clearly different from those of
other segments of the national populations.
Indigenous and tribal peoples have their own cultures, languages, customs
and institutions, which distinguish them from other parts of the societies in
which they find themselves.
Indigenous and tribal peoples are often known by national terms such as
native peoples, aboriginal peoples, first nations, adivasi, janajati, hunter-
gatherers, or hill tribes.
“Indigenous” describes any group of people native to a specific region. In
other words, it refers to people who lived there before colonists or settlers
arrived, defined new borders, and began to occupy the land.
Considering the diversity of indigenous peoples, an official definition of
“indigenous” has not been adopted by any UN-system body. Instead the
system has developed a modern understanding of this term based on the
following:

 Self- identification as indigenous peoples at the individual level and

accepted by the community as their member.

 Historical continuity with pre-colonial and/or pre-settler societies

 Strong link to territories and surrounding natural resources

 Distinct social, economic or political systems

 Distinct language, culture and beliefs

 Form non-dominant groups of society

 Resolve to maintain and reproduce their ancestral environments and

systems as distinctive peoples and communities.
Indigenous peoples are the holders of unique languages, knowledge
systems and beliefs and possess invaluable knowledge of practices for the
sustainable management of natural resources. They have a special relation
to and use of their traditional land. Their ancestral land has a fundamental
importance for their collective physical and cultural survival as peoples.
Indigenous peoples hold their own diverse concepts of development, based
on their traditional values, visions, needs and priorities.
Indigenous peoples often have much in common with other neglected
segments of societies, i.e. lack of political representation and participation,
economic marginalization and poverty, lack of access to social services
and discrimination. Despite their cultural differences, the diverse
indigenous peoples share common problems also related to the protection
of their rights. They strive for recognition of their identities, their ways of
life and their right to traditional lands, territories and natural resources.

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India is home to about 700 tribal groups with a population of 104 million, Human Development – II
as per 2011 census. These indigenous people constitute the second largest
tribal population in the world after Africa. As industries encroached upon
their lands, many communities were displaced and some continued to
wage a struggle to either protect their homes or demand a fair
compensation.
By taking away forest lands for industries and plantation forestry instead
of preserving natural species that provide livelihood to these people, the
government was depriving them of the basic means of livelihood.

Main Problems Faced by the Indian Tribes

 Loss of Control over Natural Resources: ...
 Lack of Education and problem of illiteracy: ...
 Displacement and Rehabilitation: ...
 Problems of Health and Nutrition: due to the lack of proper medical
and sanitary facilities and poverty.
 Gender Issues: ...
 Erosion of Identity:
 Poverty and exploitation.
 Economic and technological backwardness.
 Socio-cultural handicaps.
 Problems of assimilation with the non-tribal population.
 Indebtedness due to lack of adequate sources of income.
 Tribals who have been degraded to the status of untouchables.

8.3 MIGRATION
8.3.1 Introduction:
Migration is a long-term relocation of an individual, household or group to
a new location outside the community of origin. Migration is the
movement of people from one place to another. Migration can be within a
country or between countries, permanent, temporary or seasonal. Today
the movement of people from rural to urban areas is most significant.
Migration happens for a range of reasons. These can be economic, social,
political or environmental. Sometimes the push and pull factors drive
migration. Migration impacts both the place left behind and, on the place,
where migrants settle. These impacts can be both positive and negative.
Some people decide to migrate, e.g., someone who moves to another
country to improve their career opportunities. Some people are forced to
migrate, e.g., someone who moves due to famine or war.
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Economics of Human 8.3.2 Causes of Migration :
Development
1. Push and Pull Factors: Migration is explained in terms of
a. Push Factors-conditions in the of origin which are perceived by
migrants as detrimental to their well-being or economic security- for
e.g., high unemployment, greater willingness or desire to move etc.
b. Pull Factors: It includes the circumstances in new places that attract
individuals to move there- for e.g., better education, better life style,
job opportunities, higher wages/salaries, moving to a better climate
etc.

2. Economic Factors :
 Economic migration-due to permanent or seasonal factors
 people move from poorer developing areas into richer areas
where wages are higher and more jobs are available
 people from rural areas move to more competitive urban areas in order
to find more opportunities.

3. Environmental Factors :
Environmental factors cause displacement, or the forced movement of
people by social or environmental factors.
 Migration caused by environmental factors is increasingly involuntary.
 Crop failure often results in both food scarcity and a drop in
agricultural jobs, prompting people to move to a place with better job
opportunities and climate.
 Pollution of water, air and soil in both urban and rural settings can
also create a serious health risk to locals, forcing them to look for a
better life for themselves and their children.
 Devastating natural disasters such as tsunamis, hurricanes and
earthquakes
 Example-Syrian drought was catastrophic, causing many families to
lose their farms and move into big cities.

4. Social Factors:
Social factors motivating migration grow from the human needs and
desires to achieve a better quality of life.
 Migrants often move to ensure better opportunities for themselves or
their family, like sending their child to a better, safer school or finding
a job that would have not only a sufficient salary, but also important
benefits and career growth prospects.

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 In terms of education, the United States graduate programs have been Human Development – II
a particularly strong attraction for young, talented individuals around
the world.
 Individuals can also migrate in search of services, such as life-saving
surgery and medical treatment that are inaccessible in their home area.

5. Safety Factors :
 Safety factors can cause danger to individuals, prompting them to
migrate.
 Persecution and discrimination based on nationality, race, religion,
political beliefs, or membership status in a particular social group will
prompt people to move large distances in search of a safer living
location where they can have freedom over their lives.
 Danger can be imposed upon individuals by something formal,
like war, or informal, such as widespread gang activity. In 2016, the
Northern Triangle, composed of Guatemala, Honduras and El
Salvador, was named one of the most violent regions in the world. All
three Northern Triangle countries record thousands of crimes by local
and international gangs and armed criminal groups, and most crimes
are met with impunity. It is estimated that 10% of the Northern
Triangle’s population has already left, and it is likely that many more
will flee in part due to extreme violence.
6. Industrialization :
 New job opportunities- motivated surplus labour to move to cities
 Migrants provided cheap, plentiful labour to emerging industries
 Concentration of investment in urban areas was an attraction

8.3.3 Harris-Todaro Model of Migration :

Economic development of Western Europe and US is associated with
movement of labour from rural to urban areas.Rural areas dominated by
agriculture and Urban areas dominated by industrial activities.Economic
Development of these nations was characterized by gradual relocation of
labour out of agriculture (Rural Area) and into industry (urban areas)–
Lewis Model . But this migration was not validated by the experiences of
developing countries – thee countries witnessed massive migration of
people from rural to urban areas despite rising levels of unemployment
and underemployment
Todaro Migration Model and Harris –Todaro Model tries to explain the
paradoxical relationship of accelerated rural-urban migration in the
context of urban employment.

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Economics of Human Assumptions :
Development
1. Migration is primarily an economic phenomenon
2. Migration – a rational decision taken by the individual migrant despite
the existence of urban unemployment
3. No unemployment in rural sector and it is perfectly competitive- thus
Wage=MP
4. Migration proceeds in response to urban-rural differences in expected
income rather than actual earnings
5. Migrants consider the various labour market opportunities
6. The actual and potential members of labour force compare their
expected incomes for a given time horizon in the urban sector
(difference between returns and cost of migration) with prevailing
average rural incomes and migrate if the returns of migration are
greater than the cost of migration
The rural-urban migration in Todaro model acts as an equilibrating force
that equates rural and urban expected incomes.
Existing rural-urban real wage difference and the degree of probability of
finding a modern sector urban job are the two principal economic factors
involved in decision to migrate.

 AA is Demand for labour curve (MP of labour)-negative slope

 MM is labour demand in manufacturing sector
 The total labour force is OAOM
 In neoclassical flexible wage, full employment market economy
the equilibrium wage would be established at W*A,W*M with
OAL*A workers in agriculture and OML*M in urban
manufacturing-so FE

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  But if urban wages are institutionally determined (downward)as Human Development – II
assumed by Todaro at a which WM is higher than W*M

 If we assume that there is no unemployment workers would

get urban jobs and the rest, would have to settle for rural
unemployment at W**A wages(below free market level
)

 Now we have urban-rural wage gap of - A with of

institutionally fixed. If rural workers are free to migrate
then despite the availability of only jobs, they are willing to
take their chance in the urban job lottery. If their chance of
securing one of these favoured jobs is expressed by the ratio of
employment in manufacturing, ,to the total urban labour
pool, , then the expression; = ( ), shows the
probability of urban job success necessary to equate agricultural
income with urban expected income ( ) thus causing a
potential migrant to be indifferent between job locations.
 The locus of such points of indifference is given by the qq’ curve
in the diagram. The new unemployment equilibrium now occurs at
point Z, where urban-rural actual wage gap is -
workers are still in the agricultural sector, and of
these workers have modern (formal) -sector jobs paying
wages. The rest (i.e. ) are either unemployed
or engaged in low income informal sector activities.

8.3.4 Effects of Migration :

1. The internal migration process in which surplus labour gradually
withdrawn from the rural sector to provide needed manpowerfor urban
industrial growth has led to a situation wher rural-urban migration
exceeds rates of urban job creation and to surpass greatly the
absorption capacity of both industry and urban social services.
2. Migration is no longer viewed as a beneficial and useful to solve
problems of growing urban labour demand. On the contrary migration
particularly to the largest LDC cities is seen as a major factor
contributing to the ubiquitous phenomenon of urban surplus labour
that intensifies an already serious urban unemployment problem.
3. Migration worsens the rural-urban economic and structural imbalances
in different ways. On the supply side, the internal migration
disproportionately increases the growth rate of urban job seekers
relative to urban population growth, which itself is at historically
unprecedented levels because of the high proportion of well-educated
young people in the migrant system. Their presence tends to swell the
urban labour supply while depleting the rural country side of valuable
human capital. On the demand side, urban job creation is generally
more difficult and costly to accomplish than rural job creation because

117
Economics of Human of the need for substantial complementary resource inputs for most
Development jobs in the industrial sector. (LDCs are capital scarce)
4. The pressure of rising urban wages and compulsory employee fringe
benefits together with the unavailability of appropriate, more labour-
intensive production technologies implies the use of capital intensive
techniques in the modern sector which worsen the problem of urban
unemployment.
5. The rapid supply increase and lagging demand growth tend to convert
a short-run problem of resource imbalances into a long-run situation of
chronic and rising urban surplus labour.
6. The impact of migration on development process is much more
pervasive than its obvious aggravation of urban unemployment and
underemployment. Its significance lies in its implications for economic
growth in general and for the character of that growth, particularly its
distributional manifestation.

8.4 EDUCATION AND HEALTH

8.4.1 Education :
Development requires natural resources and physical capital which are
both gainfully used by labour. How and to what extent it could be used
and the level of economic development that can be achieved depends on
the quality of labour force (Human Capital). Economic growth does not
depend merely on the number of labourers employed but more on their
quality. Improvement in the quality of labour is a necessary instrument of
development. It is the cause as well as consequence of economic
development. To build up qualitative human capital, investment in
expanding education both horizontally as well as vertically, is very
essential. Thus, following stages of education require to be promoted
 Formally organised education at the elementary/primary, secondary
and tertiary levels.
 On the job training.
 Study Programmes for adults.
 Extension programmes particularly in agriculture.
 Research and development.

Education is essential for the overall development of human mind and

brain. Educating can truly make or break an individual because it builds
and develops a person’s belief, ideologies and values.
Education in general sense refers to literacy, that is, school education and
higher education leading to acquiring qualification, training and skill
development.

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In a broad sense, education includes personality traits, creativity, Human Development – II
intelligence, judgement and ability to innovate. Formal education –
primary, secondary and tertiary- helps to improve personal as well as
national economic progress.

Contribution of Education:
Education improves efficiency of labour and in turn brings positive
changes in economic development. Education is not a constant factor.
Depending on changes in science, technology, social and economic
development, the quality of education also changes. Education is a cause
as well as an effect of all the changes. It is so because labour is capable of
thinking. Effective use of physical capital depends on human capital.
Large scale investment in human capital is essential. Investment in
education is essentialEducation contributes to the economic development
in several ways such as,
 Investment in education promotes economic growth. To Todaro
education helps in economic development in several ways
o Helps in creating more productive labour force and improving the
labour force with increased knowledge and skill
o Helps in providing wide spread employment and income earning
opportunities for teachers, construction workers, text-book and paper
printers, school uniform manufacturers
o Helps in increasing a class of educated leaders
o Helps in providing basic skills and encourages modern attitude among
different people.
 Rural Development--It widens the horizons 0f the knowledge of the
people. It helps to overcome ignorance of superstitions- helps in
them to adopt the new methods of production, improve the quality of
life, setting up of new cottage industries, helps to overcome problem
of disguised unemployment, brings qualitative improvements, reduces
income inequalities, improves capabilities and standard of living.
 Reduction in Inequalities as education improves the capabilities and
efficiencies of people. Improvement in knowledge and skill efficiency-
so better opportunities, higher social status.
 Helps in Family Planning especially in LDC’s. Education brings
modernization and revolutionary ways of thinking of people and
improvement in their thought process. It explains the importance of
small families which brings higher standard of living, women
education, use of family planning methods etc.
 According to WHO, health means a state of physical, mental and
social well-being of people and absence of disease .Improved Fertility,
Improved Learning, Efficient Labour Force, Longer Life Expectancy,
Easy to Provide Training , Minimise the Loss of Working Hours ,Less

119
Economics of Human Expenditure on Illness, Reduction in Family Size, Health &
Development Investment.
 It improves efficiency. Educated labour is more efficient than an
uneducated labour. The extent and degree of efficiency increases along
with the level of education.

 Economic development is the function of innovation (Schumpeter).

They are introduced by innovative entrepreneurs who are the educated
ones perhaps with few exceptions. An educated labour force is better
in creating, implementing and adopting new technologies which leads
to further growth.
 Economies with sufficient number of appropriately educated labour
force find it easy to adopt technology from advanced countries and try
to close or bridge the technological gap faster.
 Educated labour force, particularly with higher education gives rise to
research and development. It also helps to attract FDI.
 Education increases an individual’s scope and ability to earn more.
 Education improves the quality of labour and also the quality of
physical capital through the application of knowledge.
 Education has spillover effects(externalities) on the other sections of
the society which offsets diminishing returns to capital.
 Education contributes to the development of human capital, physical
capital and in turn agriculture, industry and service sector of the
economy.
 Education through knowledge and skill brings down the poverty.
 Education enables the nations to bring in qualitative changes and
transform the society.
Education has cost and benefit for both individuals (private)and the
society as a whole. Private cost refers to the expenses incurred by the
students and also the opportunity cost. Their benefits include monetary
and social.
Public cost involves money spent by the public authorities in providing
education and also opportunity cost involved in its expenditure.
In the following diagram the part ‘a’ the dotted line shows that the
expected private returns on different levels of education. It grows at a
faster rate than private cost. For a student, his returns increase as the level
of education goes up. The cost benefit difference is the highest at the
tertiary level of education. As the level of education increases the cost too
increases but the increase in benefits or returns is much more than the
increase in cost.

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Part ‘b’ of the diagram brings out social returns and social cost of Human Development – II
education. The social returns which the entire society or economy benefits
from education increases but it almost stops in the tertiary level of
education. The social cost which is in the form of opportunity cost to
society as a whole, that is, the funds spent specially for higher education
could be spent more productively in other sectors of the economy. In this
diagram, at point B the net social return of education is maximised for the
corresponding social cost. Thereafter the cost increases more than
benefits. Brining out clearly the increasing social cost for the higher
education as against its social benefits.
Social expenditure in tertiary education is at a higher level and increases at
a faster pace, yet it is inevitable since tertiary level education includes
money spent on research and development and it results in benefits in the
form of inventions and innovations. They in turn lead to a qualitative
change in economic and social life.

It is also essential to give stress on women education to bring faster

economic development. Women education needs proper attention
especially in the Less Developed Countries in the world. It is essential to
promote women’s education because

 The rate of return on women’s education is higher than on men’s in

most developing counties.
 Increase in productivity as a labourer.

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Economics of Human  Lead to late marriage, lower fertility and greatly improved child health
Development and nutrition.
 Educated mothers improve the quality of a nation’s human resiurces
for many generations to come.
 Education impowers women who in turn enhance their social and
economic standing, which can have an important impact on breaking
the vicious circle of poverty.

8.4.2 Health :
According to World Health Organisation (WHO), health is “a state of
complete physical, mental, and social well-being and not merely the
absence of disease and infirmity.” Another method of the WHO is called
as DALY, which stands for ‘Disability Adjusted Life Year’.
Good health is an important development outcome in its own right. Illness
brings sufferings where as healthier lives are likely to be longer and more
fulfilling.
It is often said that economic development can contribute to better health.
Wealth brings better nutrition, more investment in medical care and public
health care. At the same time, health improvements can also contribute to
economic development. A good nutrition leads to good health, a healthy
mind and spirit which makes a person economically more productive. Its
contributions are,
1. Improved Productivity: Better health improves the productivity of a
person. Better health can make workers more productive, either
through fewer days off or through increased output while working.
Improved health of family members will have a similar impact through
reducing time lost to caring for dependants.
2. Improved Learning: Improved nutrition and reduced disease,
particularly in early childhood, leads to improved cognitive
development, enhancing the ability to learn. Healthy children can gain
more from school, having fewer days absentee due to ill health.
3. Efficient Labour Force: Good health makes people more efficient in
terms of work that they put in. Even in case of manual labour, a
healthier labour force can put in more work and produce more as
against the work force with poor health. Health increases physical
efficiency. Better health and nutrition and health enables people to
improve their physical health. They get better opportunities to work
and earn more.
4. Qualitative Labour Force: Health enables children to be more regular
at school and college. It helps them to concentrate and understand
better. They find it easier to pursue higher education and acquire
higher qualifications. An educated population is a social and economic
asset.

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5. Longer Life Expectancy: There is an increase in the life expectancy of Human Development – II
the people, especially in the Less Developed Countries of the world. It
provides higher working hours and thus more productive years. It
helps to increase production and income.
6. Easy to provide training: Health people are more open to and can
easily be trained in their work. Good health enables workers to be
absorbed effectively in service training. By and large they have a
positive attitude toward work as well as the problems they face.
Workers with positive attitude are a great asset for a production unit.
Such workers also provide a better work environment.
7. Minimises the Loss of Working Hours: Good health helps the workers
to be regular, punctual and more attentative to their work. This affects
the income level of the workers.
8. Reduces expenditure on treatment of illness: People who enjoy good
health spend less on medical treatment. This gives them more
disposable income which they can spend on improving quality of their
life.
9. Reduced family Size: Investments in sexual and reproductive health
can lad to reduced poverty by reducing the size of families. At a
societal level, similar investments may lead to demographic changes
conducive to economic development. There will be substantial
increase in savings. These savings will provide funds for investment
essential for development.
10. Health and Investment: Healthier individuals will often have the
ability and incentive to save more. This accumulation of capital may
help to enhance growth through investment. Companies are likely to
invest more when workforces are healthier and better educated.
Healthy and disease-free environment will support development of
several sectors including tourism.

Conclusion :
Thus, good health enables an economy to have active and efficient
workforce. The popular saying always says that ‘Health is Wealth’. In
reality, capital and natural resources are passive factors of production and
human beings are active agents who accumulate capital, exploit natural
resources, build social, economic and political institutions and accelerate
the pace of economic development.

8.5 WORKERS AND INFORMAL SECTOR

8.5.1 Introduction:
In the overall development process, the informal sector plays a very
important role due to its high labour absorbing potential, low wage cost,
and forward and backward linkages. The contribution of the informal
sector to the economy particularly in terms of employment generation is
very large. Due to lack of employment opportunities in the public sector
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Economics of Human and in the private formal sector, many people are forced to join the
Development informal sector to earn a living.
The informal sector can be seen on streets, sidewalks and back alleys of
cities and include petty traders, street vendors, coolies and porters, small-
scale artisans, barbers and shoeshine boys.
The term informal sector was first used in the 1970s by Keith Hart and the
International labourOrganisation (ILO). Different authors and scholars
have interpreted informal sector in different ways. The International
Conference of Labour Statisticians (ICLS) defined the informal sector as
all unregistered (or unincorporated) enterprises below a certain size,
including micro enterprises owned by informal employers, who hire one
or more employees on a continuing basis and Own-account operations
owned by individuals, who may employ contributing family workers and
employees on an occasional basis.
In non-statistical terms, informal sector includes employers in informal
enterprise, Own-account workers in informal enterprises, Unpaid family
workers and Members of informal producers’ cooperatives.

8.5.2 Characteristics :
1. Nature of Employment: For people engaged in informal sector there is
an absence of protection and recognition, non-coverage of minimum
wage legislation, absence of trade union organisation, low income and
wages, little job security, no fringe benefits,
2. Nature of Job: Informal sector jobs are characterised by low level of
technology and skill, unskilled workers etc.
3. Type of enterprise: Activities in informal sector are small scale in
nature, unregulated, easy entry, rely on locally available resources, use
of family labour, high level of working capital than fixed capital, low
productivity, labour intensive, activities are geared towards the needs
of the modern sector such as, vehicle repair,
radio/TV/refrigerator/watch repair, manufacture of bricks etc
4. Problem of Habitat: Land and Housing settlement-unauthorised use of
vacant public and private land, unauthorised construction of structures,
reliance on low cost and locally available waste material, low-cost
family labour, absence of restrictive standards, non-availability of
mortgage.
5. Market of Credit: Informal credit market is unregulated, easy
accessibility, small size and short duration/time, low administration
and information cost, little or no collateral, flexible interest rates,
highly flexible transactions and repayment tailored to individual needs

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8.5.3 Advantages : Human Development – II

 High Productivity and surpluses: Informal sector has higher

productivity than even the rural sector. It generates more surpluses.
This surplus can be utilised to promote formal sector.
 Low capital Intensity: This sector is more suitable to the factor
endowment of the developing countries. Informal sector makes use of
labour-intensive techniques than the capital intensive. Thus, they are
more suitable to the developing countries which are relatively capital
scarce and labour surplus. It can create employment opportunities
much faster.

 Learning Experience: Informal sector provides learning experience for

both wage workers and self employed people. Thus it enhances human
capital.

8.5.4 Problems of informal sector :

1. Labor Related Challenges : On dividing the large number of
workforce between the rural and the urban segment, although the large
number is employed in the rural sector, the bigger challenge is in the urban
workforce in the informal sector.
 Long working hours, low pay & difficult working conditions.
 Low job security, high turnover and low job satisfaction.
 Inadequate social security regulation.
 Difficulty in exercising rights.
 Child and forced labour and discrimination on basis of various factors.
 Vulnerable, low-paid and undervalued jobs.
2. Productivity : The informal sector basically comprises MSMEs and
household businesses which are not as big as firms like Reliance. They are
unable to take advantage of economies of scale.
3. Inability to Raise Tax Revenue : As the businesses of the informal
economy are not directly regulated, they usually avoid one or more taxes
by hiding incomes and expenses from the regulatory framework. This
poses a challenge for the government as a major chunk of the economy
remains out of the tax net.
4. Lack of Control and Surveillance : The informal sector remains
unmonitored by the government.
 Further, no official statistics are available representing the true state of
the economy, which makes it difficult for the government to make
policies regarding the informal sector in particular and the whole
economy in general.

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Economics of Human 5. Low-quality Products : Although the informal sector employs more
Development than 75% of the Indian population, the value-addition per employee is
very low. This means that a major portion of our human resource is under-
utilized.
6. Credit Crunch : Due to tiny structure and its single man operation, the
informal sector entrepreneurs are not capable enough to acquire adequate
credit facility from the financial institutions for the expansion of their
business. In the search for bank guarantee many of the entrepreneurs in the
informal sector resort to informal credit with high rate of interest. During
the situation of acute financial crisis, a few of them even close the
business. Therefore access to institutional credit is a perennial problem for
informal sector
7. Lack of education and skill training : One of the vital lacunae with
the informal sector is the absence of technical education and skill. As most
of the informal sector has very few employee so to say in single man
entrepreneurship there is no division of labour. Due to low skill, the wages
of workers working in the informal sector is abysmally low compared to
their counterpart in the formal sector. The lack of skill also affect the
quantity as well as quality of productivity of informal economy.
8. Woefully poor physical infrastructure : The informal sector lack
physical infrastructure because of low capital formation. The low capital
formation give rise to low investment in physical infrastructure. Modern
infrascture facilities are key to raise industrial productivity in this
technological advanced era. In the era of globalisation, where the
industries are becoming capital intensive so the predominantly labour
driven enterprises in the informal sector is obsolete
9. Lacking in Social protection : There are absolutely no social security
measures for informal workers. The paltry old age pension scheme which
government has introduced for the BPL families is too insufficient to
provide a sustainable livelihood to the informal workers during the
twilight days of their life. There are hardly any life insurance or health
insurance scheme for workers working in the informal sector. Although a
few states in India have passed social security measures for the informal
workers, yet they have not been honestly implemented.
10. Ineffectual linkages with the formal sector : There are fragile
interface between the formal and informal sector. The big-brotherly
attitude of the formal sector towards informal sector activities and
employees has created a chasm in performance between the informal and
formal sector. The formal sector is organised and structured, while
informal sector is mostly unorganised and unstructured. The workers
working in the formal sector are largely protected, while those working in
the informal sectors are unprotected. All the government policies and
programmes are directed towards the increasing efficiency of formal
sector, whereas, there are no policies and programmes for strengthening
informal sector. Even if it exists, they are in paper but usually not in
practice.
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8.5.5 Periodic Labour Force Survey: Human Development – II

According to the Periodic Labour Force Survey, over 90 per cent of

workers in India are informal workers. Out of these, those engaged in rural
areas workers are significantly more than urban areas workers.

 This is primarily because a large number of informal workers are

engaged in farm or agricultural activities.

 Those in urban areas are involved primarily in manufacturing, trade,

hotel and restaurant, construction; transport; storage and
communications; and finance, business and real estate.

8.5.6 Need to Protect Informal Workforce :

 Majority of WorkForce : India’s estimated 450 million informal
workers comprise 90% of its total workforce, with 5-10 million
workers added annually.
 Job Loss due to Pandemic : According to Oxfam’s latest global
report, out of the total 122 million who lost their jobs in 2020, 75%
were lost in the informal sector.
 The Covid-19 pandemic experience tells us that there is also a need to
provide social protection, as the vulnerabilities of the informal sector
became even more prominent as the entire country went into a state of
suspension due to the lockdown.
 Moreover, in the current financial year 2020-21, the economy is
expected to contract by 7.7%. So, there is an urgent need to revive the
economy by generating employment.

8.5.7 Security for Workers :

Every worker there should be three types of security:
 Wage Security : According to the new payment of the wages
(Amendment) act, 2017, every worker in India is to be paid certain
minimum wages.
 Job Security : in the globalized economy, the workers should be
provided with job security i.e. it should be easy for the employee to
hire and dehire.
 Social Security : In case of medical emergency, in case of death or in
the case of old age, people should be able to take care of themselves.

8.5.8 Challenges:
 Labour Related Challenges : On dividing the large number of
workforce between the rural and the urban segment, although the large
number is employed in the rural sector, the bigger challenge is in the
urban workforce in the informal sector.

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Economics of Human o Long working hours, low pay & difficult working conditions.
Development
o Low job security, high turnover and low job satisfaction.
o Inadequate social security regulation.
o Difficulty in exercising rights.
o Child and forced labour and discrimination on basis of various factors.
o Vulnerable, low-paid and undervalued jobs.
 Productivity : The informal sector basically comprises MSMEs and
household businesses which are not as big as firms like Reliance. They
are unable to take advantage of economies of scale.
 Inability to Raise Tax Revenue : As the businesses of the informal
economy are not directly regulated, they usually avoid one or more
taxes by hiding incomes and expenses from the regulatory framework.
This poses a challenge for the government as a major chunk of the
economy remains out of the tax net.
 Lack of Control and Surveillance : The informal sector remains
unmonitored by the government.
o Further, no official statistics are available representing the true state of
the economy, which makes it difficult for the government to make
policies regarding the informal sector in particular and the whole
economy in general.
 Low-quality Products : Although the informal sector employs more
than 75% of the Indian population, the value-addition per employee is
very low. This means that a major portion of our human resource is
under-utilized.

8.5.9 Recent Initiatives Taken by Government

1) AtmanirbharBharat Abhiyan :
‘Atmanirbhar Bharat Abhiyan (or Self-reliant India
Mission)’ with an economic stimulus package — worth Rs 20 lakh
crores aimed towards cutting down import dependence by focussing
on substitution while improving safety compliance and quality goods
to gain global market share.
2) Labour Codes :
The new labor codes that have been passed by parliament to take care
of the informal urban segment of the informal economy i.e. the gig
economy, workers now are the worst affected in a pandemic like
situation.

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3) E-Shram Portal : Human Development – II

The Ministry of Labour& Employment has developed eSHRAM

portal for creating a National Database of Unorganized Workers
(NDUW) for optimum realization of their employability and extend
the benefits of the social security schemes to them.
It is the first-ever national database of unorganised workers including
migrant workers, construction workers, gig and platform workers, etc.

4) Udyam Portal :
It is the only Government Portal for registration of MSME (Udyam).
The Ministry of Micro, Small Medium Enterprises maintains this
portal.
It gives the details and steps relating to registration and makes the
registration process easy for any person.
It provides free of cost and paperless registration.

5) Pradhan Mantri Shram Yogi Maan-dhan :

PM-SYM is a Central Sector Scheme administered by the Ministry
of Labour and Employment and implemented through Life
Insurance Corporation of India and Community Service Centers
(CSCs).
This scheme seeks to benefit around 42 crore workers from
the unorganized sector of the country.

6) Labour Reform :
The Parliament passed three labour codes — on industrial relations;
occupational safety, health and working conditions; and social
security — proposing to simplify the country’s archaic labour laws
and give impetus to economic activity without compromising with the
workers’ benefits.

7) PM SVANidhi :
The Ministry of Housing and Urban Affairs (MoHUA) has
launched Pradhan Mantri Street Vendor's AtmaNirbhar Nidhi
(PM SVANidhi), for providing affordable loans to street vendors.
The scheme would benefit vendors, hawkers, thelewale and people
involved in goods and services related to textiles, apparel, artisan
products, barbers shops, laundry services etc. in different areas.

8) DeendayalAntyodaya Yojana National Urban Livelihoods

Mission :
The mission was launched in 2014 and is being implemented by
the Urban Ministry of Housing & Poverty Alleviation.
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Economics of Human It aims to uplift urban poor by enhancing sustainable livelihood
Development opportunities through skill development.
9) One Nation One Ration Card :
The government of India introduced the One Nation One Ration
Card scheme (ONORC). ONORC allows a beneficiary to access his
food entitlements from anywhere in India irrespective of the place
where the ration card is registered.

10) MGNREGA :
MGNREGA is one of the largest work guarantee programmes in
the world.
The primary objective of the scheme is to guarantee 100 days of
employment in every financial year to adult members of any rural
household willing to do public work-related unskilled manual work.
Unlike earlier employment guarantee schemes, the act aims at
addressing the causes of chronic poverty through a rights-based
framework.

8.5.10 Way Forward

o Looking After Migrant Workforce : According to the Institute of
Human Development Report, the total number of vulnerable migrant
workers ranged from 115 million to 140 million.It is, therefore,
important for the draft rules to clearly state how their applicability will
unfold with respect to the migrant informal workforce.
 Strengthening MSME : Nearly 40% of the informal workforce is
employed with MSMEs. Therefore, it is natural that the strengthening
of MSME will lead to economic recovery, employment generation,
and formalization of the economy.
 Skilling Under CSR Expenditure : The large corporate houses
should also take the responsibility of skilling people in the
unorganized sectors under CSR (Corporate Social Responsibility)
expenditure.
o Unless the labour force is not skilled and educated, they will not be
accommodated in the formal sector and the efforts to formalization
will result in unemployment.
 Simpler regulatory framework : The transition of the informal sector
to the formal sector can only occur when the informal sector is given
relief from the burden of regulatory compliance and is given enough
time to adjust with the modern, digitized formal system.
 Recognizing Invisible Labour : A national policy for domestic
workers needs to be brought in at the earliest to recognize their rights
and promote better working conditions.

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 Social Security : Investing in social security schemes like Atal Human Development – II
Pension Yojna, PM Jeevan Jyoti Yojana, RashtriyaSwasthyaBima
Yojana, AamAadmiBima Yojana can help improve the condition of
workers.
o The mention of Universal Basic Income in Economic Survey 2016-17
is a positive step in this direction.
 Financial Support : Giving financial support to help small-scale
industries stand on their own is a crucial step in bringing them to the
organized sector.
o Schemes like MUDRA loans and Start-up India are helping the
youth carve a niche in the organized sector.

8.5.11 Conclusion
 The informal economy is a very pervasive phenomenon and a complex
concept. As many individuals of both the formal and informal sector
are dependent on it.
 In an informal economy the social security of the workers in an
economy should be the top-most priority of the government for
creating a social security network.
 The basic necessities of living a standardised life i.e. food, clothing,
shelter, hygiene & education is the criteria to arrive at the minimum
wage requirement.
 The focus has to be on three aspects of security i.e, job security, wage
security & social security.

8.6 SOCIAL SECURITY

8.6.1 Introduction:
The term social security has been defined differently by authorities and,
thus, there is no commonly accepted definition of the term. There are
mainly two streams of thought on this issue, one represented by the ILO
that limits the scope of social security to maintenance of one’s income
against loss or diminution.Another view perceives social security in a
broader sense; in this sense, it is a set of policies and institutions designed
to enable a person to attain and maintain a decent standard of life. This is
described as a preventive or promotional form of social security.The term
social security was coined for the first time when the United States Social
Security Act, 1935, came into existence.
Social security is defined as the security that the society furnishes through
appropriate organizations against certain risks to which its members are
exposed.
The ILO has defined social security as ‘the surety that society furnishes,
through appropriate organization, against certain risks to which the
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Economics of Human members are exposed. These risks are essentially contingencies against
Development which the individuals of small means and meagre resources cannot
effectively provide by their own ability or presight or even in private
combination with their fellow workers—these risks being sickness,
maternity, invalidity, old age, and death. It is the characteristics of these
contingencies that they imperil the ability of the working class to support
itself and its dependent in health and decency’.
According to Lexicon Universal Encyclopaedia, the term social security
has been defined as ‘consisting of public programmes intended to protect
workers and their families from income losses associated with the old age,
illness, unemployment, or death. The term sometimes is also used to
include a broad system of support for all those who, for whatever reasons,
are unable to maintain themselves’.The concept of social security is based
on ideas of human dignity and social justice
According to Lord Beveridge, social security, “is an attack on five giants
viz., want, disease, ignorance, squalor and idleness.” This concept is
related to social justice and equality. ILO defines social security as, “the
security that society furnishes, through appropriate organisation against
certain risks to which its members are exposed…. Social security is
designed to prevent and cure disease, to support when people are unable to
earn and restore to gainful employment.”
The National Commission on Labour (NCL) (1969) has defined the
Concept of Social Security as, Social Security envisages that the members
of a community shall be protected by collective action against social risk
causing undue hardship and deprivation to individuals whose private
resources can seldom be adequate to meet them.
The concept of Social Security is based on ideas of human dignity and
social justice. It further tries to protect the citizens to contribute towards
the countries total welfare.
8.6.2 Characteristics Of The Social Security

The main characteristics of the social security program are as follows:

(1) Social Security Schemes are providing social assistance and social
insurance to employees who have to face challenges of life without
regular earning due to some contingencies in their life.
(2) These Schemes are implemented by enactments of law of the country.
(3) They generally are relief providers to employees who are exposed to
the risks of economic and social security. This protection is provided
to them by members of the society of which he is a part.
(4) These Schemes have a broad perspective. They not only provide
immediate relief to the employees who have suffered on account of
contingencies, but also provide psychological security to others who
may face the same problems in times to come.

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Social security is basically related to the high ideals of human dignity and Human Development – II
social justice.
The importance of social security for the employee as well as the society
is incredibly high:
(a) Social Security is the main instrument of bringing about social and
economic justice and equality in the society.
(b) Social Security is aimed at protecting employees in the event of
contingencies. This support makes the employees feel psychologically
secured. This enhances their ability to work.
(c) Money spent on social security is the best investment which yields
good harvest. The workforce maintenance is very essential not only
for the organization but also for the country at large.
(d) In a welfare state, social security is an important part of public policy.
In countries where social security is not given adequate consideration
in public policy, the government remains unsuccessful in maintaining
equality and justice.

8.6.3 Objectives of Social Security :

The objectives of social security can be sub-summed under three,
categories :
1. Compensation : Compensation ensures security of income. It is based
on this consideration that during the period of contingency of risks, the
individual and his/her family should not be subjected to a double calamity,
i.e., destitution and loss of health, limb, life or work.
2. Restoration : It connotates cure of one’s sickness, reemployment so as
to restore him/her to earlier condition. In a sense, it is an extension of
compensation.
3. Prevention : These measures imply to avoid the loss of productive
capacity due to sickness, unemployment or invalidity to earn income. In
other words, these measures are designed with an objective to increase the
material, intellectual and moral well-being of the community by rendering
available resources which are used up by avoidable disease and idleness.
8.6.4 Social Security – Benefits in India: Social Insurance and Social
Assistance
India is a Welfare State as envisaged in her constitution. Article 41 of the
Indian Constitution lays down, “The State shall within the limits of its
economic capacity and development make effective provision securing the
right to work, to education and to public assistance in case of
unemployment, old age, sickness, and disablement and other cases of
unserved wants.”

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Economics of Human Thus, social security constitutes an important step towards the goal of
Development Welfare State, by improving living and working conditions and affording
people protection against the various kinds of hazards.
Social security benefits are provided in India through legislations.
Workmen’s Compensation Act, 1923 enforces the employer to provide
compensation to a workman for any personal injury caused by an accident,
for loss of earnings etc. The Employees’ State Insurance Act, 1948
enforces the employers to provide sickness benefits, maternity benefit to
women employees, disablement benefit, dependent’s benefit, funeral
benefit and medical benefits.
The Employees Provident Fund and Miscellaneous Provisions Act, 1952
enforces the employer to provide provident fund, deposit-linked insurance
etc. The Maternity Benefit Act, 1961 provides for medical benefits,
maternity leave etc. The Payment of Gratuity Act, 1952 provides for the
payment of gratuity at the time of retirement.
Social security legislations in India suffer from the defects like
duplication. For example. Employees’ State Insurance Act and Maternity
Benefit Act provide for maternity benefits. In addition, different
administrative authorities implement the law, resulting from overlapping.
Hence, the Study Group (1957-58) appointed by the Government of India
suggested an integrated social security scheme in India.This integrated
social security scheme should provide for medical care, insurance against
sickness, maternity benefits unemployment insurance, employment injury,
and old age pension. This scheme should be enforced by a single agency
in order to avoid overlapping and duplication.
India is a welfare state and social security is an essential component of
government policy.

Social security benefits in India are provided in two major way :

1. Social Insurance.
2. Social Assistance.

1. Social Insurance :
In this scheme, a common fund is established with periodical contributions
from workers, according to their nominal paying capacity. The employers
and state provide the portion of the finance. Provident fund and group
insurance are example of this type.

2. Social Assistance :
Under this, the cost of benefits provided is financed fully by the
government without any contributions from workers and employers.
However, benefits are paid after judging the financial position of the
beneficiary. Old age pension is an example.

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According to the Social Security (Minimum Standards) Convention (No. Human Development – II
102) adopted by the ILO in 1952, the following are the nine components
of social security that configure its scope:
(i) Medical care,
(ii) Sickness benefit,
(iii) Unemployment benefit.
(iv) Old age benefit,
(v) Employment injury benefit,
(vi) Family benefit,
(vii) Maternity benefit,
(viii) Invalidity benefit, and
(ix) Survivor’s benefit
Generally, India’s social security schemes cover the following types of
social insurances:
 Pension;
 Health Insurance and Medical Benefit;
 Disability Benefit;
 Maternity Benefit; and
 Gratuity.

8.7 HUMAN SECURITY

Human security represents an effort to re-conceptualize security in a
fundamental manner. It is primarily an analytical tool that focuses on
ensuring security for the individual, not the state. Exploring options aimed
at mitigating threats to the insecurity of individuals thus becomes a central
goal of policy recommendations and actions. In line with the expanded
definition of human security, the causes of insecurity are subsequently
broadened to include threats to socio-economic and political conditions,
food, health, and environmental, community and personal safety. Policy
initiatives generated through the application of the human security
framework have incorporated considerations far beyond the traditional
focus on military force, greatly reducing the emphasis on armies, if not
replacing them altogether. Human security is therefore: people-centred
multidimensional interconnected universal.
Human security is an emerging paradigm for understanding
global vulnerabilities whose proponents challenge the traditional notion
of national security through military security by arguing that the proper
referent for security should be at the human rather than national level.
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Economics of Human Human security reveals a people-centred and multi-disciplinary
Development understanding of security which involves a number of research fields,
including development studies, international relations, strategic studies,
and human rights. The United Nations Development Programme's
1994 Human Development Report is considered a milestone publication in
the field of human security, with its argument that ensuring "freedom from
want" and "freedom from fear" for all persons is the best path to tackle the
problem of global insecurity.
The 1994 Report introduces a new concept of human security, which
equates security with people rather than territories, with development
rather than arms. It examines both the national and the global concerns of
human security. The Report seeks to deal with these concerns through a
new paradigm of sustainable human development, capturing the potential
peace dividend, a new form of development co-operation and a
restructured system of global institutions.
It proposes that the World Summit for Social Development approve a
world social charter, endorse a sustainable human development paradigm,
create a global human security fund by capturing the future peace
dividend, approve a 20:20 compact for human priority concerns,
recommend global taxes for resource mobilization and establish an
Economic Security Council.
Increasing human security entails :
 Investing in human development, not in arms;
 Engaging policy makers to address the emerging peace dividend;
 Giving the United Nations a clear mandate to promote and sustain
development;
 Enlarging the concept of development cooperation so that it includes
all flows, not just aid;
 Agreeing that 20 percent of national budgets and 20 percent of foreign
aid be used for human development; and
 Establishing an Economic Security Council.
Mahbub ul Haq first drew global attention to the concept of human
security in the United Nations Development Programme's 1994 Human
Development Report and sought to influence the UN's 1995 World
Summit on Social Development in Copenhagen. The UNDP's 1994
Human Development Report's definition of human security argues that the
scope of global security should be expanded to include threats in seven
areas:
1. Economic security – Some of the criteria associated with economic
security include insured basic income and employment, and access to
such social safety net. Economic security requires an assured basic
income for individuals, usually from productive and remunerative
work or, as a last resort, from a publicly financed safety net. In this
sense, only about a quarter of the world's people are presently
economically secure. While the economic security problem may be
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 more serious in developing countries, concern also arises in developed Human Development – II
countries as well. Unemployment problems constitute an important
factor underlying political tensions and ethnic violence.

2. Food security – Food security requires that all people at all times have
both physical and economic access to basic food. Food security is
simply access to basic nutrition and food supply. According to
the United Nations, the overall availability of food is not a problem,
rather the problem often is the poor distribution of food and a lack
of purchasing power. In the past, food security problems have been
dealt with at both national and global levels. However, their impacts
are limited. According to UN, the key is to tackle the problems relating
to access to assets, work and assured income (related to economic
security).
3. Health security – Health security aims to guarantee a minimum
protection from diseases and unhealthy lifestyles.. Health security is
more complex, and covers many different issues such as access to safe
water, living in a safe environment, access to health services, access to
safe and affordable family planning and basic support during
pregnancy and delivery, prevention of HIV/AIDS and other diseases,
and to have basic knowledge to live a healthy life. In developing
countries, the major causes of death traditionally
were infectious and parasitic diseases, whereas in industrialized
countries, the major killers were diseases of the circulatory system.
Today, lifestyle-related chronic diseases are leading killers worldwide,
with 80 percent of deaths from chronic diseases occurring in low- and
middle-income countries. According to the United Nations, in both
developing and industrial countries, threats to health security are
usually greater for poor people in rural areas, particularly children.
This is due to malnutrition and insufficient access to health services,
clean water and other basic necessities.
4. Environmental security – Environmental security aims to protect
people from the short- and long-term ravages of nature, man-made
threats in nature, and deterioration of the natural environment.
Environmental security is straightforward and cover such issues as
prevention of water pollution, prevention of air pollution, prevention
from deforestation, irrigated land conservation, prevention of natural
hazards such as droughts, floods, cyclones, earthquakes etc. In
developing countries, lack of access to clean water resources is one of
the greatest environmental threats. In industrial countries, one of the
major threats is air pollution. Global warming, caused by the emission
of greenhouse gases, is another environmental security issue.
5. Personal security – Personal security aims to protect people from
physical violence, whether from the state or external states, from
violent individuals and sub-state actors, from domestic abuse, or from
predatory adults. For many people, the greatest source of anxiety
is crime, particularly violent crime.

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Economics of Human 6. Community security – Community security aims to protect people
Development from the loss of traditional relationships and values and from sectarian
and ethnic violence. Traditional communities, particularly
minority ethnic groups are often threatened. About half of the world's
states have experienced some inter-ethnic strife. It also covers
conservation of traditional and cultures, languages and commonly held
values. It also includes abolishment of ethnic discrimination,
prevention of ethnic conflicts, and protection of indigenous people.
The United Nations declared 1993 the Year of Indigenous People to
highlight the continuing vulnerability of the 300 million aboriginal
people in 70 countries as they face a widening spiral of violence.??
7. Political security – Finally political security is concerned with
protection of human rights and well-being of all people. It also
includes protection against people from state repression such as
freedom of press, freedom of speech, and freedom of voting.
Abolishment of political detention, imprisonment, systematic ill
treatment, and disappearance are also covered under political
security.Political security is concerned with whether people live in a
society that honors their basic human rights. According to a survey
conducted by Amnesty International, political repression, systematic
torture, ill treatment or disappearance was still practised in 110
countries. Human rights violations are most frequent during periods of
political unrest. Along with repressing individuals and groups,
governments may try to exercise control over ideas and information.
“Freedom from Fear" and "Freedom from Want" : While the
UNDP 1994 report originally argued that human security requires
attention to both freedom from fear and freedom from want, divisions
have gradually emerged over the proper scope of that protection (e.g.
over what threats individuals should be protected from) and over the
appropriate mechanisms for responding to these threats.
• Freedom from Fear – This school seeks to limit the practice of
Human Security to protecting individuals from violent conflicts while
recognizing that these violent threats are strongly associated with
poverty, lack of state capacity and other forms of inequities.This
approach argues that limiting the focus to violence is a realistic and
manageable approach towards Human Security. Emergency assistance,
conflict prevention and resolution, peace-building are the main
concerns of this approach. Canada, for example, was a critical player
in the efforts to ban landmines and has incorporated the "Freedom
from Fear" agenda as a primary component in its own foreign policy.
However, whether such “narrow” approach can truly serve its purpose
in guaranteeing more fruitful results remains to be an issue. For
instance, the conflicts in Darfur are often used in questioning the
effectiveness of the "Responsibility to Protect”, a key component of
the Freedom from Fear agenda.
• Freedom from Want – The school advocates a holistic approach in
achieving human security and argues that the threat agenda should be
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broadened to include hunger, disease and natural disasters because they Human Development – II
are inseparable concepts in addressing the root of human insecurity and
they kill far more people than war, genocide and terrorism combined.
Different from "Freedom from Fear", it expands the focus beyond
violence with emphasis on development and security goals.
Despite their differences, these two approaches to human security can be
considered complementary rather than contradictory
The human security approach, however, is more than an exercise in joint
programming. It has five fundamental principles that differentiate it from
simply working together. These are:
1. People-centred: First and foremost, the human security approach is
people-centred. It considers the broad range of conditions that threaten
the survival, livelihood and dignity of people and their communities,
particularly those who are most vulnerable.
2. Comprehensive: Second, the human security approach recognizes the
complexity and interconnected nature of the First Based on the 1994
UNDP Human Development Report, New Dimensions of Human
Security. Types of human insecurities and possible root causes first
type of insecurity root causes Economic insecurity Persistent poverty,
unemployment, lack of access to credit and other economic
opportunities Food insecurity Hunger, famine, sudden rise in food
prices Health insecurity Epidemics, malnutrition, poor sanitation, lack
of access to basic health care Environmental insecurity Environmental
degradation, resource depletion, natural disasters Personal insecurity
Physical violence in all its forms, human trafficking, child labour
Community insecurity Inter-ethnic, religious and other identity-based
tensions, crime, terrorism Political insecurity Political repression,
human rights violations, lack of rule of law and justice 8 challenges
that confront people and their aspirations to be free from want, fear
and indignity. By being comprehensive and by drawing together all the
actors necessary to respond to a challenge, the application of human
security ensures coherence, eliminates duplication and advances
integrated solutions that result in more effective and tangible
improvements in the day-to-day life of people and their communities.
3. Context-specific: There is no “one size fits all” in addressing today’s
challenges. Recognizing that risks to the human condition vary
considerably within and across countries, and at different points in
time, the human security approach recognizes context-specific
variances, including the differing capacities of people, civil society
and Governments, as well as the root causes behind ongoing and future
challenges.
4. Prevention-oriented: The human security approach goes beyond quick
responses and is prevention-oriented. By drilling down to ascertain the
real causes of challenges and by building solutions that are in
themselves sustainable and resilient, human security promotes the
development of early warning mechanisms that help to mitigate the
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Economics of Human impact of current threats and, where possible, prevent the occurrence
Development of future challenges.
5. Protection and Empowerment: Moreover, the human security approach
recognizes that there are inherent responsibilities within each and
every society. Empowering people and their communities to articulate
and respond to their needs and those of others is crucial. Likewise, top-
down norms, processes and institutions, including the establishment of
early warning mechanisms, good governance, rule of law and social
protection instruments are fundamental characteristics of the human
security approach. It brings measures into a framework that can better
address complex challenges to the human condition.
The five principles making up the human security approach are mutually
reinforcing and cannot be implemented as separate objectives. Human
security involves recognizing the strengths that accrue from true
partnerships where different entities combine their strengths to create
synergies that can achieve far greater impact in addressing today’s
complex and multidimensional challenges.

8.8 QUESTIONS
1. Write an explanatory note on displacement.
2. Explain in details the concept of indigenous group. What are the
problems faced by them.
3. Define term Migration. Explain Harris-Todaro model of migration.
4. Write an explanatory note on the role of education and health in
economic development.
5. What is informal sector? Write a note on workers and informal sector.
6. Write an explanatory note on social security.
7. Write an explanatory note on human security.



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