Characteristics Of The Indian Economy
Low per capita income
India remains one of the most underdeveloped countries in terms of per capita income. In the year 2015, India’s, Purchasing Power Parity estimate of GNP per capita was as low as $6,030 it was around one-tenth of the U.S.A.’s purchasing power parity estimate of GNP per capita which stood at $57,540 in the year 2015.
Inequitable distribution of Income
The economic growth of the country has accentuated the disparities in income distribution. According to the World Development Indicators 2014, the share of the bottom 10% of the population in aggregate household expenditure was only (4% in 2010, while the share of the top 10% was as high as 29%. These figures clearly bring out the large inequalities in income and expenditure that exist in India.
Predominance of agriculture
In 1951 about 69.7 per cent of the country’s working population was dependent on agriculture, as against this in 2001 around 56.7% per cent of the working population was absorbed in agricultural operations. Another indicator of the predominance is the proportion of national income originating in this sector. In 2017, 18 Agriculture contributed 18 per cent of the Gross Domestic Product.
Rapid population growth
India’s population has been growing at a fast rate, from 439 million in 1961 to 1,210 million in 2011. The country at present is passing through the second stage of demographic transition which is characterised by a falling death rate without a corresponding decline in the birth rate. Population increase and the sluggish growth of the economy has increased the dependency ratio, especially in the agricultural sector. The decadal growth of population during the decade 2001 to 2011 was 17.64.
Low Level of Human Development
Human development is usually measured in terms of the Human Development Index (HDI) constructed by the United Nations Development Programme (UNDP). The HDI is a composite of three basic indicators of human development – longevity, knowledge and standard of living. India ranks a lowly 131 in terms of HDI (out of 188 countries) according to the Human Development Report 2016.
Unemployment
The failure of the Industrial sector to grow fast enough to absorb the growing urban population has led to urban unemployment but more striking is the disguised unemployment in rural India.
Scarcity of Capital
Capital is considered the most important factor of economic development. The rates of saving and capital formation have been low and are enough only to realise a modest rate of growth. The gross domestic savings rate for 2004-05 has been estimated to be as high as 31.3 per cent by the CSO while the gross investment rate in this year has also been claimed to have risen to 31.5 per cent. In 2011, the rates of gross domestic savings and gross domestic capital formation continued to rise. This stood at 31 per cent and 36.1 per cent respectively. In most of the low-income underdeveloped economies, the saving rate continues to be very low (less than 20% of GDP)
Technological Backwardness
Agriculture in India today is still characterised by highly primitive techniques. The workforce of the country which is illiterate lacks skill and knowledge. This poses the problem of dealing with a poor quality of the employed workforce.
Lack of Entrepreneurs
Entrepreneurs play a vital role in development. The country even now does not seem to have innovating entrepreneurs. Industrialists in the private sector concentrate mainly on quick, speculative profits rather than on the long-term industrial 1 development of the country.
Lack of Basic Minimum Needs
Needs such as drinking water, education, and sanitation, medical facilities are yet to reach the deprived rural areas of the country. The government is making great efforts to first equip the masses with these basic requirements.
Demographics
India possesses about 2.4 per cent of the total land area but has to support about 17.5 per cent of the world population. According to 2011 census, the population of India was 1,21,01,93,422. The population of India, which at the turn of the 20th century was around. 238.4 million has increased more than 4 times in a period of one hundred and ten years to reach 1,210 million in 2011.
Causes for Rapid Growth of Population
Broadly speaking there are two major causes for the increase in the population of a country. i) a high birth rate; ii) a relatively lower death rate. The birth rate is high because of certain economic and social factors. The economic factors are concerned with the predominance of agriculture, the slow urbanisation process, and poverty.
The social factors are :
lower age at the time of marriage which is responsible for the high fertility rate. religious beliefs, social superstitions, joint family systems and lack of education. com The increase in population is also due to the decline in mortality rate (death rate). Since Independence, there has been an elimination of famines, control of epidemics and reduction in the incidence of diseases like tuberculosis and malaria. Steps towards better sanitation, supply of drinking water, better education and expanded medical facilities particularly immunisation have controlled the mortality rate.
Theory of Demographic Transition
The theory of demographic transition is based on the relationship between the birth rate and the death rate. This theory pinpoints the changes in these rates which occur as a consequence of economic development. According to this theory, there are three stages through which the growth rate of the population passes:
First stage
Here the birth rate is high and so is the death rate. Since the birth rate in this stage is only slightly higher than the death rate the growth of the population is minimal. India was in this stage till 1921.
Second stage
As the economy develops the death rate falls rapidly I more or less stable and widens the difference between the two. Hence this is also called the stage of “population-explosion”. India has been in this stage since 1921.
Third stage
This is characterised by not only a low death rate but also a low birth rate. Economic development, industrialisation and urbanisation highlight the need for a small family thus bringing about a stable growth of population.
Important Demographic Characteristics
Sex Composition
The sex ratio (females per thousand males) according to the 2011 census is 940. This is the highest sex ratio recorded since census 1971 and a shade lower than 1961. Kerala top the list with 1084 females per thousand males and Haryana stands at the bottom with 877 females per thousand males. Among the Union Territories Pondicherry tops the list with a sex ratio of 1038. and Daman and Diu stand at the bottom with a sex ratio of 618.
The Density of Population
The density of population (the number of persons per sq. km) as per the 2011 census is 382. According to the 2011 census the density of population is highest in Bihar (1102) and lowest in Arunachal Pradesh (17). The Union Territory having the highest density was Delhi ( 11297) and the Union Territory with the lowest density was the Andaman and Nicobar Islands (46).
Literacy Rate
As per the 2011 Census, the literacy rate in India (population aged 7 years and above who can both read and write with understanding in any language) was 74.04 per cent. In general, the literacy rate has shown marginal increases every decade.
The state with the highest literacy rate was Kerala ( 93.91) and the state with the lowest literacy rate was Bihar (63.82). Kerala also occupies the top spot in the country in female literacy with 91.98 per cent while Lakshadweep is top in male literacy with 96.11 per cent. On the contrary, Bihar has recorded the lowest literacy rates in the case of males (73.39 per cent ) and Rajasthan in the case of females(56.66 per cent )./
Here are some notes on National Population Policy 2010