Question

1. What accounts for the fact that a close association exists between industrial growth and the growth of GDP?.

2. Why does the existence of famine and malnutrition considered a distributional problem and not one of food shortage?

Answer 1

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Question:

Answer:

1). Answer:

Industry: An industry is a group of companies that are related based on their primary business activities. A industry define by a group of companies where, number of companies work in a economy and dealing or producing the same product and services with different features, benefits and prices. There are many types of industries within an economy like, manufacturing industry, service industry, agri-industry etc.

Industrial Growth: Here, growth is related with the expansion and increasing productivity and efficiency of the industry with the increasing in demand and supply. Industrialization generates employment opportunities, provides educational opportunities, encourages advancement and innovation, and better utilizes resources. All of these benefits and more make industrial development extremely valuable to a population and the local economy.

GDP: Gross Domestic Product (GDP) is the total value of goods and services produced in a country.

GDP = GDP = C + G + I + NX (where C=consumption; G=government spending; I=Investment; and NX=net exports). All these activities contribute to the GDP of a country.

The growth of industry and the economy (here growth of economy means growth of GDP) is correlated with each other and dependent on each other. Both are move together in the same direction. A economy can not grow without the industrial growth. Because a higher industrial growth creat the new job opportunities, income level and investment in the economy that increase the consumption level, a higher consumption level boost the aggregate demand (AD) in the economy. A higher AD increased the GDP growth rate.

Now understand all this things in details with examples. Now assume a country has a higher industrial growth rate. The major industries of this country are manufacturing and services industries. The manufacturing industry is labor oriented industry and services industry is skilled labor, capital and technology based industry. Now this country will creat more and more jobs for its skilled and semi -skilled labor or work force that will increase their income level. A higher the income level will increased their living of standard and now they will consume more. Now the higher the consumption level boost the AD and higher the AD will boost GDP and price level. As per the Phillips Curve higher the price level will creat more jobs and decrease unemployment level. Other side it will export more than its import so its total export will also increase. These all the cycle will boost the confidence of investors that will increase the invest level. So, higher the Consumption, investment, net export will boost the growth rate of GDP.

2). Answer:

Famine and malnutrition considered a distributional problem and not one of food shortage. It is a bigger problem of poor and underdeveloping nations. This problem is a very old and known problem globally. There are number of national and international organizations are working to solve this problem but its still exist as a big problem.

The main causes of this issue are food management and income inequality. I am an Indian and India is a developing country and malnutrition caused 69 per cent of deaths of children below the age of five in India, according to a UNICEF report released. It is also the big reason of low HDI in India. The total population of India is 136 crores and total In 2017-18, total food grain production was estimated at 275 million tonnes (MT). India is the largest producer (25% of global production), consumer (27% of world consumption) and importer (14%) of pulses in the world according to a data. So, you can see here that India is the largest producer (25% of global production) and the Global Hunger Index 2018 ranks India at 103 out of 119 countries on the basis of three leading indicators – the prevalence of wasting and stunting in children and malnutrition caused 69 per cent of deaths of children below the age of five in India,

So, picture is clear that this is a distributional problem and not one of food shortage. There is a poor distribution system in India. There is not proper channel, storage system and clear policy for food distribution in India. Because of poor storage capacity thousands of tons grain destroyed every year does reach to the needy people or hungers.

Other side  famine is also a big issue in India. The poor water management system is the biggest reason on famine in India. India face floods every year but west that flood water because of lower and poor the storage system. Flood is also a reason of poor water management system. Poor distribution of the farmers is a big reason of lower the productivity.

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