UGC NET Economy Q50

Question

Read the passage and answer the following question.

Few subjects have been more controversial in development thought than the relation between population and development. This has perhaps been inevitable, given the intellectual history of the subject. The influence of Malthus has not been helpful. Even though he revised his original harsh thesis so that in the later editions of the Essay he had accepted positions that fundamentally undermined it, his 'iron law' inspires generations of reactionary thinkers: they took the line that there was no point in helping the poor-they would only 'breed' more until war, hunger or disease cut them down. At least as far as the North-south debate was concerned, population control was a northern idea, dressed up as an aid to development and the reduction of poverty; in the south, underdevelopment was more often regarded as the result of the northern domination of the world economy, if not of capitalism itself; certainly, it could not be explained by excessive growth in population. The most difficult issues in the analysis of national effects are the oldest- the effect of population growth on per capita income; and the newest-the effect on the environment. In an earlier study, population growth was associated with reduced savings and therefore reduced GNP, and ipso facto, with reduced per capita income. This is no longer believed. The mechanism by which population growth reduced GNP growth were supposed to be mainly two: a negative impact on savings because of an increased burden of dependency; and a diversion of investment from more or less productive uses, i.e from agriculture, industry, and infrastructure to health, education and welfare services. In fact, the Indian capital-output ratio did rise, but not because of any such diversion of investment; on the contrary, successive plans allocated marginally more overtime to productive sectors, despite population growth being higher than the plans assumed; the share of education and health in plan outlays actually declined slightly from the second to the sixth plan. It is well-known that the Indian growth problem was one of low returns to rising levels of savings and investment.

Accepted Answer

4