India As A Developing Economy

OSCEEN MISHRA
INDIA AS A DEVELOPING ECONOMY

OSCEEN MISHRA
CHARACTERISTICS OF INDIAN ECONOMY:
1. LOW PER CAPITA INCOME
• Per capita income level is much low in India as compared with

other developed countries.
• According to World Development Report (2011), India's per
capita income was $ 1180 and hence India's per capita income is
about 1/40 of US level of per capita.
• At present a new modified system of comparing and calculating
per capita income has been adopted at international level in
which the per capita income of a country is calculated on the
basis of purchasing power of currency of that particular power of
currency of that particular country; while old traditional method
was based on exchange rate of currencies.
2. DISPARITIES IN INCOME DISTRIBUTION
• High degree of disparity in income/wealth distribution is found in

India.
• The objective of establishing a socialistic society was adopted in
Second Five Year Plan but truly speaking it has not yet achieved.
• According to the data shown by NSSO, 39% of rural population
possesses only 5% of all the rural assets while, on the other hand,
8% top households possess 46% of total rural assets.
• Income disparities are more intensive in urban areas as
compared with those of rural areas.
3. DOMINANCE OF AGRICULTURE AND HEAVY

POPULATION PRESSURE ON AGRICULTURE
• Land-labour ratio is not favourable in India.

• Per capita land availability is very low and, on the contrary, labour
use per hectare is very high in India.
• Agriculture and allied sector even today provides livelihood to
about 65 to 70% of the total population but as per advance
OSCEEN MISHRA
estimates of CSO for 2011-12 agriculture contributes only 13.9%

in Gross Domestic Product (GDP).
4. OVER POPULATION
• India is over-populated.
• In every decade Indian population gets increased by about 20%.
• During 2001-11, population increased by 17.6%.
• According to 2011 census, the total Indian population stands at a
high level of 121.02 crore which is 17.5% of the world's total
population.
• To maintain this 17.5% of world population India holds only
2.42% of total land area of the world.
5. UNBALANCED ECONOMIC DEVELOPMENT
• India has not yet achieved the goal of balanced economic

development.
• According to latest data available for the year 2009-10 about 64%
of total labour force is dependent on agriculture, 16% on
industries and the rest about 20% on trade, transport and other
services.
6. LACK OF CAPITAL
• Savings are low in India due to low national income and hight
consumption expenditure.
• Gross domestic savings which were 23.1% of GDP in 1990-91,

increased up to a level of 36.9% of GDP in 2007-08.
7. LACK OF INDUSTRIALISATION
• India lacks in large industrialisation based on modern and

advanced technology, which fails to accelerate the pace of
development in the economy.
OSCEEN MISHRA
• Average annual growth rate of industrial sector (including mining,

manufacturing and power generation) was 8.5% in the Seventh
Plan against the target of 8.7% p.a.
8. OPERATION OF ECONOMIC VICIOUS CIRCLES
• Economic vicious circles are still in operation in Indian economy

and as a result poverty has become both cause and effect in the
country.
• 'India is poor because it is poor'–indicates a true economic
science of the country.
• The intensity of poverty has made these vicious circles
unbreakable in the country.
9. MARKET IMPERFECTIONS
• Indian economy faces a number of market imperfections like lack

of mobility among production factors from one place to the other
and lack of specialisations which hinder the optimum utilisation of
available resources.
• All these market imperfections and their results are important
reasons for undeveloped state of Indian economy.
10. LIMITED AVAILABILITY OF TRANSPORT AND

COMMUNICATION FACILITIES
• Transport and Communications facilities do play a vital role in

economic development of a country like India, but these facilities
are not yet extended to the required level.
• Transport facilities are not available in remote areas of the
country due to which industrial development is not equally
distributed among various part of the economy.
• It also hinders the process of exploiting available resources in the
country.
11. EXISTENCE OF TRADITIONAL SOCIETY

OSCEEN MISHRA
• The Indian traditional society is still facing a number of social

problems like traditions and customs, malpractices, superstitions
etc.
• Existence of Traditional Society adversely effect the process of
economic development, because these social obligations do
increase the unproductive expenditure of the masses and hardly
spare any saving for capital formation process.
12. POOR QUALITY OF HUMAN CAPITAL
• Indian economy is suffering from poor quality of human capital.

• Mass illiteracy is the root of this problem and illiteracy at the same
time is retarding the process of economic growth of our country.
Besides, low level of living is also responsible for poor health
condition of the general masses.
• All this has resulted in the problem of poor quality of human capital
in the country.

India As A Developing Economy

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India As A Developing Economy

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OSCEEN MISHRA

INDIA AS A DEVELOPING ECONOMY

CHARACTERISTICS OF INDIAN ECONOMY:

1. LOW PER CAPITA INCOME

• Per capita income level is much low in India as compared with

2. DISPARITIES IN INCOME DISTRIBUTION

• High degree of disparity in income/wealth distribution is found in

3. DOMINANCE OF AGRICULTURE AND HEAVY

• Land-labour ratio is not favourable in India.

estimates of CSO for 2011-12 agriculture contributes only 13.9%

5. UNBALANCED ECONOMIC DEVELOPMENT

• India has not yet achieved the goal of balanced economic

• Gross domestic savings which were 23.1% of GDP in 1990-91,

• India lacks in large industrialisation based on modern and

• Average annual growth rate of industrial sector (including mining,

8. OPERATION OF ECONOMIC VICIOUS CIRCLES

• Economic vicious circles are still in operation in Indian economy

• Indian economy faces a number of market imperfections like lack

10. LIMITED AVAILABILITY OF TRANSPORT AND

• Transport and Communications facilities do play a vital role in

11. EXISTENCE OF TRADITIONAL SOCIETY

• The Indian traditional society is still facing a number of social

12. POOR QUALITY OF HUMAN CAPITAL

• Indian economy is suffering from poor quality of human capital.

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