and hu1nanit hul it paNes throal on pc aue anl stabilily wold cco

1.2 CONCEPT OF DEVELOPING AND DEVELOPED

cOUNTRIES - WORLD BANK CLASSIFICATION

Almst all countnes ol the world ditler n economie status. The World Bank
has lassificd thcm on the bas1s ot certain common charactcristics. Accordng
tWorld Development Report 2012, all economiesare classilied on the basis
ot Gross National income and by region World Bank has analysed 208
economies which have population of more than 0,000 and have ranked them
by their level of Gross National Income (GND into three main categories:
I. Low Income Countries (LIC): This category includes those countries
whose GNI is below US $ 1005 or less. It consists of about 50
countrics, V73.. Cambodia. Democratic Republic of Korea, Mangolia.
Myanmar. Papua New Guinea. Thailand. Tajikistan. Uzhekistan. Haiti
Guyana,. ctc.
2. Middle Income Countries (MIC): This category includes those
countries whose GNI is hetween US $ 1006 to US $ 12275. For
convenience sake. this category is further divided into two headings:
(i)Lower Middle Income Countries: It consists of those countries
whose GNI is US $ 1006 to $ 3975. It consists of 51 countries
ofthe world. The main countries are: India. China, Fiji. Indonesia.
Philippines. Thailand. Albania, Bulgaria, Turkmenistan. El
Salvador. Panama. Arab Republic Egypt, Iraq. Morrocco,. West
Bank and Gaza. Maldives, Sri Lanka. Angola, ete.

includes those
(ii) Upper Middle Income Countries: This category
countries whose GNI lies bctween US $ 3976 to US $ 12275. In
There
these countries, the level of income distribution is high.
are 40 countries in this group. Some of them are: Malaysia,
Czech Republic Georgia, Lithuania. Poland, Romania, Turkey.
Lucia, Venczucla.
Argentina. Chile. Costa Rica. Mexico, St.
clc.
Lebanon. Libya. South Africa. Botswana, Gabon,
known as
3. High Income Countries (HIC): These countries arc

ceonomics and their GNI is more than US $ 12276.

developed
 2. ent and
and Underdevelopment
Uno
inderdeveelopment
Low Levels of
In Living 1.9
an
UDC, general
of level of
people. is clear
li living
from low ends to be low for the vast
poor education, income, poor
Very poor countries high infant
like mortality housing, poormajorily
rate
and low healih,
and hunger. Ethiopia, Malawi, etc., face
life
expectancy.
3. High starvation, misery
Inequality of Income
Inequalities in distribution of
privileged group is able to cornerincome refers toa situation when
a a small
very large group a
very large chunk of
gets a very small total income and
There exist wide
and income inequality proportion of income.
developing
within an UDC. countries but also
gaps not only
between advanced
These between the rich and poor
development
of a
country.
inequalities have grown with
people
4.
4. Widespread Poverty economic

Widespread poverty prevails in all

has been drawn al
UDCs. International
this basis, almost expenditure of US $ 1.25 per personpoverty
an line
one-fourth of
world's population is per day. On
poverty line. Fast growing living below the
both a cause and an population
effect of
in the
developing countries is
4. High Rate of
underdevelopment.
Population Growth
Generally, UDCs have high rate of
6. Low Level of population growth.
Productivity
According to Michael Todaro, "low level
tivity of living and low
produc-
world
are
self-reinforcing social and economic
phenomena in third
countries, and, as such, 1he
principle contributors to their
are

underdevelopment."
of
Productivity means
output produced per
work force. In all person
UDCs, productivity levels are very low
because of: mainly
(a) less use of capital in the form of modern
machines and
equipments,
(b) less efficiency in the work force due to
poor health and poverty,
and

(c) poor work culture due to lack of

incentives and discipline
Concept and Measures of Development and Underdevelopment
1.13

measuring muluple deprivations in the same hou schold in three basiIC

dimensions namely:
(a) a long and healthy lifc,
(b) access to knowledge, and
(c) a decent standard of living.
3. High Inequality of Income
(a) Extent of inequality of income can be known on the basis of the
available data relating to income distribution in the country. A
number of studies have been carried out from time-to-time to
the extent of
measure
overall inequalities in India. Table 1.4 gives
different estimates of income inequalities in India in a chrono-
logical order.

Table 1.4: Estimates of Income inequalities in India

Source Ojha- NCAER World World World World UNDP
Bhatt
Bank Bank BankBank
Period Covered 1961-62 1964 1975 1983 1989-90 1999 2004
to1963-64 -65 -76 2000 -05
Share of Top 10 35.0 33.5 33.6 26.7 27.1 27.4 31.1
per cent of
Population
Share of 7.5 7.5 7.0 8.1 8.8 8.9 8.1
Bottom 20 per cent
of Population
Source: 1. Pramit Chaudhri: The Indian Economy, Poverty and Development.

2. World Development Report, Various Issues.

3. UNDP Human Development Report, Various Issues.

Table 1.4 shows that
distribution. The share
(a) There exist largc inequalities in income
one-fourth
of top 10 per cent of the population has been between
toone-third of national income over 14 years between 1995 to
has
2009. The share of the bottom 20 per cent of the population
been between 7 to 9 per cent over the period of about 14 years
between 1995 to 2009 (Source: 2012 WDR).
income
(b) There has been marginal change in incqualities over

ime.
(c) There exist inequalities in the level of household consumption.
Income inequalities are also reflected in inequalities in the level
of household consumption. According to the NSS estimate for
the vear 2004-05. the share otf the bottom 30 per cent of