CHARACTERISTICS OF INDIAN ECONOMY SINCE INDEPENDENCE

INDIA AS A DEVELOPING COUNTRY

MASS POVERTY AND LOW PER CAPITA INCOME

Per capita income in India is estimated at 1,793 dollars (2011)

Macro measure of this low level is the level of per capita real final consumption expenditure

bulk of income is still being spent on food items as natural in a UDC

Per capita oil consumption (accepted as a criterion for level of living) is 0.6 barrels as against the world average of 4.5 barrels

INEQUALITIES IN INCOME DISTRIBUTION

The top 10% of wage earners now make 12 times more than the bottom 10%, up from a ratio of six in the 1990s

Gini coefficient, the official measure of income inequality, has gone from 0.32 to 0.38, with 0 being the ideal score

PREDOMINANCE OF AGRICULTURE

Provides employment to about two-thirds of total working population

Indicator of low economic development

Although things have improved as compared to independence

UNDERDEVELOPED NATURAL RESOURCES AND INADEQUATE CAPITAL FORMATION

India is gifted with large renewable and non renewable resources

Large part underutilized because of lack of capital or technical know how

DEMOGRAPHIC PECULIARITIES

During 1961-2011, India’s population increased at an annual average rate of about 2.1% and currently at a rate of 1.6%

Absolute annual increase in India’s population is being estimated at about 17 million i.e. India is adding daily about 50,000 persons all through out the year.

UNEMPLOYMENT AND UNDER EMPLOYMENT

Labour surplus economy The unemployment rate in India was last

reported at 3.8 percent in 2010/11 fiscal year.

Historically, from 1983 until 2010, India Unemployment Rate averaged 8.1 Percent reaching an all time high of 9.4 Percent in December of 2009 and a record low of 6.0 Percent in December of 1994.

(The unemployment rate can be defined as the number of people actively looking for a job as a percentage of the labour force.)

QUALITY OF HUMAN CAPITAL

High rate of illiteracy

74.04% people can read and write (2011) i.e. 296 million illiterates

India ranks 106 out of the 127 countries on Education for all development index (2005 global report)

In skilled areas like computer technology, situation is disastrous

The number of beds available over 1,000 million is only 9.10 lakh

Only 16 out of every 100 Indian households- a mere four in villages have first generation infrastructure facilities like safe drinking water, electricity and toilets.

About 20% of the population have no access to safe drinking water.

India has the distinction of the highest percentage of neonates who weigh less than the internationally accepted norm of 2.5 kg.

TECHNOLOGICAL BACKWARDNESS

Rate of technological growth; 0.7% to 1.1%

119 researchers per million population

Global Information technology report,2010, places India at 117 among 159 countries in the economies effectively using IT

INFRASTRUCTURE INADEQUACIES

Singapore based Political and Economic Risk Consultancy Ltd.- India ranked 10th in financial system and 9th in physical infrastructure (In scale of 0 to 10, 10 being worse)

Global competitiveness report by World Economic Forum 2011: India ranks 32nd in a group of 59 countries in terms of growth competitiveness

DUALISTIC ECONOMY

Mixture of traditional and modern Large number of illiterates along

with large number of IT professionals

UNFAVORABLE SOCIAL AND VALUE STRUCTURE

The structure of social relations is hierarchical and social cleavages are pronounced. Emphasis is not on Individual but rather upon family

Caste system Nature is given more importance

than human efforts Corruption is rampant

INDIA AS A RAPIDLY EMERGING ECONOMY

SUSTAINED GROWTH

Presently India is fastest growing economy in the world (after China)

In terms of purchasing power parity, India had a per capita income of 3,260 $

In the changing demographics, India will have the largest pool of working population in the world.

Self Reliance and minimal Dependence

Agricultural Transformation Industrial changes Changes in foreign trade Improvement in Infrastructure Expansion of science and technology Social Changes