UPSC Prelims 2018 · Question 48 of 99
UPSC Prelims 2018 question on Economic Development vs Growth
- ExamUPSC CSE
- Year2018
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicEconomic Growth
- DifficultyMedium
- TypeDirect
Increase in absolute and per capita real GNP do not connote a higher level of economic development, if
Show answer
Answer: C. poverty and unemployment increase.
Analysis
An essential aspect of development is enabling the maximum number of people to experience its fruits. Per capita income measures cannot capture this, because a rise in absolute and per capita GNP may simply reflect growing income for a small section while the majority remains poverty stricken and unemployed. Multi-dimensional non-monetary social indicators reflect overall development far better.
The other options describe sectoral imbalance or a trade deficit. These are real economic problems, but neither directly contradicts the claim that development has occurred, because an economy can develop with a changing sectoral balance or a trade gap. Only worsening poverty and unemployment strikes at the meaning of development itself.
Statement by statement
Option (c) is correct, so the answer is (c).
Source
NCERT, Introductory Macroeconomics, Chapter 2, National Income Accounting.
How to crack it
The reasoning chain runs from the growth and development distinction, which is the single most examined idea in this part of the syllabus. Growth is about the size of the aggregate, development about its distribution and its effect on human lives. When a stem asks what would undermine a claim of development, choose the option about distribution or deprivation rather than the one about sectoral composition.