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Q48 (IAS/2018) Economy ā€ŗ Growth, Development, Poverty & Employment ā€ŗ Income and development levels Official Key

Increase in absolute and per capita real GNP do not connote a higher level of economic development, if

Result
Your answer: ā€”  Ā·  Correct: C
Explanation

The correct answer is option C because economic growth takes into account only quantitative changes (like increase in per capita income), while economic development takes into account both quantitative and qualitative aspects of improvement in well-being[1]. Economic development is a broader concept where Development = Growth + improvements in different socio-economic parameters[1]. If GNP increases but poverty and unemployment also increase, it indicates that the benefits of growth are not translating into broader well-being improvements. Even countries having high economic growth experienced speedy rise in poverty because of its unequal distribution[2]. This scenario represents "growth without development" where quantitative gains fail to reflect qualitative improvements in people's lives. The other optionsā€”relating to sectoral output imbalances or trade patternsā€”do not directly negate development in the same fundamental way that rising poverty and unemployment do, as these latter conditions directly contradict the core objective of improving human welfare.

Sources
  1. [1] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 2: Economic Growth versus Economic Development > ECONOMIC GROWTH AND ECONOMIC DEVELOPMENT > p. 22
  2. [2] INDIA PEOPLE AND ECONOMY, TEXTBOOK IN GEOGRAPHY FOR CLASS XII (NCERT 2025 ed.) > Chapter 6: Planning and Sustainable Development in Indian Context > Sustainable Development > p. 70
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Q. Increase in absolute and per capita real GNP do not connote a higher level of economic development, if [A] industrial output fails to keā€¦
At a glance
Origin: From standard books Fairness: High fairness Books / CA: 10/10 Ā· 0/10
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This is a classic 'Concept 101' question found in the first chapter of any standard Economy book (NCERT or Singhania). It tests the fundamental philosophical difference between 'Growth' (numbers) and 'Development' (people). If you missed this, you are skipping the definitions to memorize data, which is a fatal error.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Does an increase in absolute and per capita real GNP fail to connote a higher level of economic development if industrial output fails to keep pace with agricultural output?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 2: Economic Growth versus Economic Development > ECONOMIC GROWTH AND ECONOMIC DEVELOPMENT > p. 22
Presence: 5/5
ā€œIt is not possible to quantify economic development. ā€¢ Economic Growth: It takes into account quantitative changes only (say, increase in per capita income). Economic Development: It takes into account both quantitative and qualitative aspects of improvement in well-being. ā€¢ Economic Growth: The scope of economic growth is narrow. Economic Development: Economic Development is a broader concept. Development = Growth + improvements in different socio-economic parameters. ā€¢ Economic Growth: To measure the economic growth, GDP, GNP, etc.ā€
Why this source?
  • Explicitly distinguishes economic growth (quantitative increase such as per capita income/GNP) from economic development (requires qualitative improvements in well-being).
  • Implied conclusion: higher GNP alone may not indicate development because development includes broader socio-economic parameters beyond income.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 20: Investment Models > Lewis Model of Economic Development > p. 593
Presence: 4/5
ā€œAgricultural sector of India has huge amount of surplus labourers, and if these surplus labourers are taken away, then the net output of agricultural sector will not be affected. These surplus labourers are attracted at a bit higher wages for industrial development and growth of the country.ā€
Why this source?
  • Lewis model emphasizes shifting surplus labour from agriculture to industry as key to development; industrial expansion is thus necessary for structural transformation.
  • If industrial output fails to expand, the necessary labour absorption and productivity gains tied to development do not occur.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 2: Economic Growth versus Economic Development > UNDERDEVELOPMENT > p. 23
Presence: 4/5
ā€œUnderdevelopment or low-level development is characterised by the low level of per capita income of a country. In underdeveloped countries, the primary sector provides employment to a large extent. There are several common features of underdeveloped countries, like low GNP per capita, relatively low capital formation, high levels of unemployment and underemployment, low levels of productivity of labor, high level of poverty and income inequality, low human capital, etc. Composite Development Index - The Raghuram Rajan Committee submitted its report on a new underdevelopment index called Composite Development Index, in 2013. The Committee suggested this index to determine (under)development of States.ā€
Why this source?
  • Defines underdevelopment features: large primary-sector employment and low per capita income, linking an agriculture-dominated structure to low development.
  • Suggests that without a relative rise in industrial activity, high GNP figures may coexist with underdevelopment characteristics.
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SIMILAR QUESTIONS

IAS Ā· 2000 Ā· Q49 Relevance score: -2.90

The growth rate of per capita income at current prices is higher than that of per capita income at constant prices, because the latter takes into account the rate of

CDS-I Ā· 2007 Ā· Q2 Relevance score: -3.21

Assertion (A) : Per capita income of India does not give a complete picture of the economic growth of the country. Reason (R) : Per capita income of a country is not independent of the size of its population.

CDS-I Ā· 2021 Ā· Q68 Relevance score: -4.14

Which one of the following statements is not correct ?

IAS Ā· 1996 Ā· Q70 Relevance score: -4.42

Assertion (A) : Though Indiaā€™s national income has gone up several fold since 1947, there has been no marked improvement in the per capita income level. Reason (R) : Sizeable proportion of the population of India is still living below the poverty line. In the context of the above two statements which one of the following is correct ?