Tamilnadu Samacheer Kalvi 12th Economics Notes Chapter 3 Theories of Employment and Income Notes
→ The first part of this chapter deals with economic development which gained importance during the 20th Century.
→ The concept of development and growth are used inter-changeably.
→ However, there are mild differences between the two.
→ The pace of economic development depends on several factors which are classified under economic and non-economic factors.
→ Economic development is retarded by several obstacles of which the Vicious Circle of Poverty is the prime one.
→ The second part is concerned with economic planning.
→ The failure of market mechanism brought the birth of planning.
→ Planning started in USSR and spread to countries like India and most of the mixed economies.
→ There are strong arguments in favour of planning and some arguments against planning.
→ There are various types of planning under different economic systems depending upon the extent of Government control.
→ It is totalitarian and highly centralized in socialist countries, democratic and indicative in countries like France.
→ The NITI Aayog is the new planning body replacing Planning Commission in India.
→ Capital accumulation : The process of addition to the existing stock of capital.
→ Centralized Planning : Centralized planning means the power of planning and
decision making are exclusively in the hands of top management.
→ Development : The systematic use of scientific and technical knowledge
to meet specific objectives and requirements.
→ Financial Planning : Techniques of planning in which resources are allocated in terms of money.
→ Growth : Economic growth refers to an increase in real GDP, which means an increase in the value of national output/national expenditure.
→ Human Capital : Education and training that make human beings more productive.
→ Perspective Planning : Long term planning i.e. for a period of 15 or more.
→ Physical Planning : Techniques of planning in which resources are allocated in terms of men, materials and machinery.
→ Planning : It is the process of thinking about the activities required to achieve directed goals.
→ Social Indicators : The basic needs for development such as health, education, sanitation, water, food etc.
→ Underdevelopment : Underdevelopment is low level of development characterized by low real per capita income, widespread poverty, lower level of literacy, low life expectancy, underutilization of resources etc.
→ Vicious Circle of Poverty : Circular relationships that tend to perpetuate the low level of development in Less Developed Countries.