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→Key Idea #2 Income and Development
==Key Idea #2 Income and Development==
==Key Idea #2 Income and Development==
National Income is an important indicator for development - greater the national income, more the development (ceteris paribus). Faster the growth of income, more the development (ceteris paribus).
Hence growth in national income (or growth in gross national product, GNP) is seen as an important variable.
However growth in income does not imply equitable or equal distribution. Where income is equitably distributed, the increase in human welfare tends to be higher.Where it is distributed unequally, human welfare, overall may not rise in proportion. The
The [http://en.wikipedia.org/wiki/Gini_coefficient Gini coefficient] (also known as the Gini index or Gini ratio) measures the statistical dispersion of the income distribution of a nation's residents. It was developed by the Italian statistician and sociologist [http://en.wikipedia.org/wiki/Corrado_Gini Corrado Gini]. India has relatively a low gini co-efficient, suggesting more equitable spread of income distribution, though it has increased in last two decades of economic liberalisation. All over the world, the [http://en.wikipedia.org/wiki/Gini_coefficient Gini coefficient] is increasing, including in the USA, where it is seen as an [http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States important challenge for capitalist democracy].
===Learning objectives===
===Learning objectives===
#Role of Income in development
#Role of rate of growth of income in development
#Link between growth in income and other development parameters
===Notes for teachers===
===Notes for teachers===
Growth in national income usually leads to increase in taxes collected which enables government to fund developmental activities. The allocations at national and state levels for education has been consistently rising in the last two decades due to higher growth rates in national income (Gross National Product or GNP)
===Activity ===
===Activity ===
#[[Development_income and development activity1]]
#[[Development_income and development activity1]]