Module 3: Development

CONTENTS

• DEVELOPMENT: MEANING, DEFINITION, TYPES, APPROACHES

• INDIAN EXPERIMENTS WITH DEVELOPMENT
• ROLE OF PLANNING IN DEVELOPMENT
• GROWTH VS DEVELOPMENT DEBATE
• SOCIAL DIMENSION OF ECONOMIC DEVELOPMENT
• ROLE OF CIVIL SOCIETY AND NGO IN DEVELOPMENT
What is Development?

 A quantitative and qualitative changes in the factors that affect the

human life.

 Development is an upward ascending movement featuring greater

levels of energy, efficiency, quality, productivity, complexity,
comprehension, creativity, mastery, enjoyment and accomplishment.

 Development is process of social change.

Types of Development

 Social Development

 Economic Development

 Human Development
Social Development
 Qualitative changes in the structure and framework of society.

 Society passes through series of stages in the course of its

development.

 Society evolved from hunting and gathering, pastoral, agrarian,

industrial, and post-industrial societies.
Economic Development
 Economic Development is programs, policies or activities that seek to improve
the economic well-being and quality of life for a community.

 Historically, economic development policies focused on industrialization

and infrastructure; since the 1960s, it has increasingly focused on poverty
reduction.
Human Development

 A process of improving people’s freedoms and opportunities and improving their

well-being.
 The human development concept was developed by economist Mahbub ul
Haq.
 Central to the human development approach is the concept of capabilities.
 The work of Sen is focused on capabilities: what people can do and be.
 It is these capabilities, rather than the income or goods that they receive that
determine their well being.
Human Development Index

 The HDI was created to emphasize that people and their capabilities should
be the ultimate criteria for assessing the development of a country, not
economic growth alone.

 It is a summary measure of average achievement in key dimensions of human

development: a long and healthy life, being knowledgeable and have a
decent standard of living.

 The HDI is the geometric mean of normalized indices for each of the three
dimensions.
India and its neighbours

 India ranks 131st out of 189 countries with a score of 0.645.

 Pakistan ranks 154th with 0.557 score
 Srilanka ranks 72nd with score of 0.782
Approaches to Human Development

 Income Approach
 Welfare Approach
 Basic Needs Approach
 Capability Approach
Sustainable development

 Sustainable development is development that meets the needs of the present

without compromising the ability of future generations to meet their own needs.
 Core Elements of Sustainable Development

 Three core elements of sustainable development are environmental sustainability,

social sustainability, and economic sustainability.

Environmental Sustainability:
 It prevents nature from being used as an inexhaustible source of resources and
ensures its protection and rational use.
 Aspects such as environmental conservation, investment in renewable energy,
saving water, supporting sustainable mobility, and innovation in sustainable
construction and architecture, contribute to achieving environmental sustainability
on several fronts.
Social Sustainability:
 It can foster gender equality, development of people, communities and cultures
to help achieve a reasonable and fairly-distributed quality of life, healthcare and
education across the Globe.

Economic Sustainability:
 Focuses on equal economic growth that generates wealth for all, without
harming the environment.
 Investment and equal distribution of economic resources.
 Eradicating poverty in all its forms and dimensions.
Planning Commission of India

The Planning Commission was set up:

 To promote a rapid rise in the standard of living of the people by efficient
exploitation of the resources of the country,
 Increasing production
 Offering opportunities to all for employment in the service of the community.
The Planning Commission was charged with the responsibility of
 Making assessment of all resources of the country,

 Augmenting deficient resources,

 Formulating plans for the most effective and balanced utilisation of resources

 Determining the priorities.

First FYP (1951-1956)

 First FYP mainly addressed the agrarian sector, including investment in dams and
irrigation.

 Ex- Huge allocations were made for Bhakhra Nangal Dam.

 It was based on the Harrod-Domar Model and emphasised increasing savings.

 The target growth rate was 2.1% and the achieved growth rate was 3.6%.
Second FYP (1956-1961)

 The Second Five year Plan stressed rapid industrialisation and the public sector.

 It was drafted and planned under the leadership of P.C Mahalanobis.

 It emphasised quick structural transformation.

 The government imposed tariffs on imports to protect domestic industries under this
plan.

 The target growth rate was 4.5% and the actual growth rate was slightly less than
expected, 4.27%.
Third FYP (1961- 1966)
 The focus was on agriculture and improvement in the production of wheat.

 Panchayat elections were introduced to bring democracy to the grassroots level.

 The target growth rate was 5.6% and the actual growth rate only achieved 2.4%

 This indicated a miserable failure of the Third Plan, and the government had to
declare "Plan Holidays" (1966-67, 1967-68, and 1968-69).

 The Sino-Indian War and the Indo-Pak War, which caused the Third Five Year Plan
to fail, were the primary causes of the plan holidays.
Fourth FYP (1969-1974)
 It was introduced under the Prime Ministership of Indira Gandhi and attempted to
correct the previous failures.

 The Green Revolution boosted agriculture.

 The government nationalised 14 major Indian Banks.

 The Drought Prone Area Programme was also launched.

 The target growth rate was 5.6%, but the actual growth rate was 3.3%.
Fifth FYP (1974-1978)
 It laid stress on increasing employment and poverty alleviation (garibi hatao).

 The focus was on state-owned industrialisation and infrastructure development.

 The Minimum Needs Programme introduced in the first year of this plan, aimed to
provide basic minimum needs. MNP was prepared by D.P. Dhar.

 The target growth rate was 4.4% and the actual growth rate turned out to be 4.8%

 In 1978, the newly elected Morarji Desai government rejected this plan.
Sixth FYP (1980-85)

 It underlined the beginning of economic liberation by eliminating price controls.

 It was seen as the end of Nehruvian Socialism.

 To prevent overpopulation, family planning was introduced.

 The target growth rate was 5.2% and the actual growth rate was 5.7%, implying
that it was a success.
Seventh FYP (1985-1990)
 This plan was led by the Prime Ministership of Rajiv Gandhi.

 The outcome of the Sixth Five-Year Plan provided a robust base for the success of the
seventh five-year plan.

 It laid stress on improving Industrial productivity levels through the use of technology.

 It emphasised anti-poverty programmes, the use of modern technology, and the

need to make India an independent economy.

 The target growth rate was 5.0%. However, the actual growth rate grew to reach
6.01%
Eighth FYP (1992-1997)

 The Eighth Plan promoted the modernisation of Industries.

 India became a member of the World Trade Organisation on 1 January 1995.

 The goals were to control population growth, reduce poverty, generate

employment, strengthen the development of infrastructure, manage tourism,
focus on human resource development etc.

 The target growth rate was 5.6% but the actual growth rate was an incredible
6.8%.
Ninth FYP (1997-2002)
 It marked India's fifty years since Independence and Atal Bihari Vajpayee led the
prime ministership.

 The focus was to balance the relationship between rapid growth and the quality
of life for the people.

 The objectives were developing self-reliance and primary education for all
children in the country.

 The target growth rate was estimated at 7.1% but its actual growth rate fell shorter
to 6.8%
Tenth FYP (2002-2007)
 The features of this plan were to promote inclusive growth and equitable
development.

 It intended for an 8% GDP growth per year.

 It aimed at reducing the poverty by half and creating employment for 80million
people. Further, it aimed to reduce regional inequalities.

 It also emphasised reducing the gender gaps in the field of education and wage
rates by 2007.

 The target growth rate was 8.1% while the actual growth was 7.6%.
Eleventh FYP (2007-2012)

 The Eleventh Plan was significant in its aim to increase enrolment in higher education
and focused on distant education as well as IT institutes.

 Its main theme was rapid and more inclusive growth.

 It is aimed at environmental sustainability and reduction in gender inequality.

 The focus was also laid on providing clean drinking water for all by 2009.

 The target rate was 9% and the actual growth rate was 8%.
Twelfth FYP (2012-2017)
 The last Five Year Plan had "Faster, More Inclusive and Sustainable Growth" as its
theme.
 The plan aimed at strengthening infrastructure projects, and providing electricity
supply in all villages.
 It also aimed at removing the gender and social gap in admissions at school and
improved access to higher education.
 Further, it aspired to enhance the green cover by 1 million hectares each year and to
create new opportunities in the non-farming sector.
 The target growth rate was 9% but in 2012, National Development Council approved
a growth rate of 8% for this twelfth plan.
NITI Aayog (National Institution for Transforming India)

Background
 Planning has been in Indian psyche as our leaders came under influence of the
socialist clime of erstwhile USSR.

 Planning commission served as the planning vehicle for close to six decades with a
focus on control and command approach.

 Planning Commission was replaced by a new institution – NITI Aayog on January 1,

2015.

 The emphasis on ‘Bottom –Up’ approach to envisage the vision of Maximum

Governance, Minimum Government, echoing the spirit of ‘Cooperative Federalism’.
What is the Importance of NITI Aayog ?

 The 65 year-old Planning Commission had become a redundant organization.

 It was relevant in a command economy structure, but not any longer.

 India is a diversified country and its states are in various phases of economic
development along with their own strengths and weaknesses.

 In this context, a ‘one size fits all’ approach to economic planning is obsolete.

 It cannot make India competitive in today’s global economy.

Key Objectives
 To foster cooperative federalism
 To develop mechanisms to formulate credible plans at the village level and
aggregate these progressively at higher levels of government.
 To ensure that the interests of national security are incorporated in economic
strategy and policy.
 To pay special attention to the sections of our society that may be at risk of not
benefitting adequately from economic progress.
 To create a knowledge, innovation and entrepreneurial support system.
 To maintain a state-of-the-art Resource Centre, be a repository of research on good
governance and best practices in sustainable and equitable development
Structure of NITI Aayog

 Team India Hub acts as interface between States and Centre.

 Knowledge and Innovation Hub builds the think-tank acumen of NITI Aayog.
How NITI AYOG has changed the fundamental nature of planning in India.

 Change in policy making: While designing strategic and long term policies and
programs for the Government of India, NITI Aayog also provides relevant
technical advice to the Centre and States.
 Bottom- up approach
 Strong focus on research, innovations, technology, collaboration and
development
 Digitization: It focuses on technology upgradation and capacity building for
implementation of programmes and initiatives. Example: Digital India
 Indices Measuring States’ Performance in Health, Education and Water
Management: ‘Name and shame’ has helped improve states’ business rankings
Various Initiatives by NITI Aayog

 Ease of Doing Business Index,

 Sustainable Development Goals India Index,
 Composite Water Management Index,
 School Education Quality Index
 District Hospital Index
 Health Index
 Agriculture Marketing and Farmer Friendly Reform Index
 India Innovation
 ATAL Innovation Mission
 Aspirational District Program
 Methanol Economy Program
Three plans spread over three different time periods

 First is a 15 year “Vision” that encompasses overall goals and objectives of the
country for next 15 years.

 Second is a 7 year “Strategy” which lays the roadmap of development for next
seven years dividing those goals and objectives into two parts.

 Third and Final is a “Three Year Action Agenda” which states the tasks and targets
to be accomplished in next three years time frame, further dividing the strategy
into two parts.
Success of NITI AYOG so far

 It has increased the involvement of the states in the planning process.

Ex: Hosted three sub-group of chief ministers on revamping centrally sponsored
schemes, Swachh Bharat and Skill Development.

 NITI AYOG has been at the forefront in conceptualizing initiatives to contribute to

the growth of the country.
Ex: Roadmap for digital payment, Aspirational district programme, monitoring
implementation of sustainable development goals (SDG) etc.

 It is fostering a sense of cooperative as well as competitive federalism amongst the

states. Ex: Releasing ranking on various development parameters.

 The Atal Innovation Mission, which is established under NITI Aayog, has done
admirable work in improving the innovation ecosystem in India.
Issues associated with NITI AYOG

 NITI Aayog has no role in influencing private or public investment.

 Inadequate resources to the new planning body.

 Inequality has continued to grow in the Indian society and the effect of NITI AYOG
in combating this has been subpar.

 Solutions to solve structural issues in the country are still not forthcoming.
Way forward

 Equipping the planning body with requisite powers so that it can effect change.

 Allocation of adequate resources.

 NITI AYOG could be made legally accountable to the legislature for its inability
to meet the targets. This would bring in more accountability.

 Ensure the planning body remains a non-partisan institution.

Economic Growth & Economic Development
 Economic growth is an increase in the production of economic goods and services,
compared from one period of time to another.
 Economic development is defined as a sustained improvement in material wellbeing of
society.
 Economic development is a wider concept than economic growth.
 Apart from growth of national income, it includes changes – social, cultural, political as
well as economic which contribute to material progress.
 It contains changes in resource supplies, in the rate of capital formation, in size and
composition of population, in technology, skills and efficiency, in institutional and
organizational set-up.
 These changes fulfil the wider objectives of ensuring more equitable income distribution,
greater employment and poverty alleviation.
 Economic development is a ‘Multidimensional’ concept as it focuses on income,
social welfare and other dimensions.
 On the whole, the economic growth is a narrow term.
 It involves increase in output in quantitative terms but economic development
includes changes in qualitative terms such as social attitudes and customs along
with quantitative growth of output or national income.

Economic Growth without economic development is possible. But Economic

development without economic growth is almost inconceivable.
Growth is only a necessary condition and not a sufficient condition for promotion of
well-being and raising the standard of living of the people.
Social Dimensions of Economic Development
 Poverty
 Education
 Health
 Life Expectancy
 Employment
 Modernization
 Social System/Structure
 Human evelopment
 Consumerism culture dominating social behaviour
Civil Society

 Civil Society: The wide array of non-governmental and not-for-profit

organizations that have a presence in public life, expressing the interests and
values of their members or others, based on ethical, cultural, political,
scientific, religious or philanthropic considerations.

 According to the World Bank: “Civil society ... refers to a wide array of
organizations: community groups, non-governmental organizations [NGOs],
labour unions, indigenous groups, charitable organizations, faith-based
organizations, professional associations, and foundations.”

 Civil societies are considered as fifth pillar of democracy.

NGOs

 NGO: NGOs are legally constituted organizations, operate independently from

the government and are generally considered to be “non-state, non-profit
oriented groups who pursue purposes of public interest”.
 The primary objective of NGOs is to provide social justice, development and
human rights.
 NGOs are generally funded totally or partly by governments and they maintain
their non-governmental status by excluding government representatives from
membership in the organization.
 Non-governmental organizations (NGOs) are operational arm of the civil society
therefore have an important role in the development processes.
Role of Civil Societies & NGOs in
Development
 Social development
 Education
 Women empowerment
 Environmental awareness
 Rehabilitation
 Protecting dignity
 Human rights protection