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Low per capita income:
In India, the NATIONAL INCOME and per capita income is very low and it is considered as one of the basic features of underdevelopment. As per World Bank estimates, the per capita income of India stood at only $ 1900 in 2017.
Excessive dependence of agriculture and primary producing
Indian economy is characterised by too much dependence on agriculture and thus it is primary producing. Out of the total working Population of our country, a very high proportion of it is engaged in agriculture and allied activities, which contributed a large share in the national income of our country.
In 2018, nearly 50 per cent of the total working population of our country was engaged in agriculture and allied activities and was contributing about 18.0 per cent of the total national income.
High rate of population Growth
India is maintaining a very high rate of growth of population since 1950. Thus the pressure of population in our country is very heavy. This has resulted from a very high level of birth rates coupled with a falling level of death rates prevailing in our country.
In India, the rate of growth of population has been gradually increasing from 1.31 per cent annually during 1941-50 to 2.5 per cent annually during 1971-81 to 2.11 per cent annually during 1981-91 and then finally to 1.77 per cent during 2001-2011.
Thus whatever development that has been achieved in the country, it is being swallowed up by the increased population. Moreover, this high rate of growth of population necessitates a higher rate of economic growth just for maintaining the same standard of living.
Existence of chronic Unemployment and under-EMPLOYMENT
Rapid growth of population coupled with inadequate growth of secondary and tertiary occupations are responsible for the occurrence of chronic unemployment and under-employment problem in our country. In India, unemployment is structural one, unlike in developed countries, which is of cyclical type.
Here Unemployment in India is the result of deficiency of capital. Indian industries are not getting adequate amount of capital for its necessary expansion so as to absorb the entire surplus labour force into it.
Poor rate of Capital Formation
Capital deficiency is one of the characteristic features of the Indian economy. Both the amount of capital available per head and the present rate of capital formation in India is very low. Consumption of crude steel and energy are the two important indicators of low capital per head in the under-developed countries like India.
Inequality in the distribution of wealth
Another important characteristic of the Indian economy is the mal-distribution of wealth. The report of the Reserve Bank of India reveals that nearly 20 per cent of the households owing less than Rs 1000 worth of assets possess only 0.7 per cent of the total assets.
Low level of technology
Prevalence of low level of technology is one of the important characteristics of an underdeveloped economy like India. The economy of our country is thus suffering from technological backwardness. Obsolete techniques of production are largely being applied in both the agricultural and industrial sectors of our country.
Under-utilisation of natural Resources
In respect of natural endowments India is considered as a very rich country. Various types of Natural Resources, viz., land, water, Minerals, forest and power resources are available in sufficient quantity in the various parts of the country.
But due to its various inherent problems like inaccessible region, primitive techniques, shortage of capital and small extent of the market such huge resources remained largely under-utilised. A huge quantity of mineral and Forest Resources of India still remains largely unexplored.
Lack of Infrastructure-2/”>INFRASTRUCTURE
Lack of infrastructural facilities is one of the serious problems from which the Indian economy has been suffering till today. These infrastructural facilities include transportation and Communication facilities, electricity generation and distribution, Banking and credit facilities, economic organisation, Health and educational institutes etc.
The two most vital sectors, i.e. agriculture and Industry could not make much headway in the absence of proper infrastructural facilities in the country. Moreover, due to the absence of proper infrastructural facilities, development potential of different regions of the country largely remains under-utilised.
Low level of living
The standard of living of Indian people in general is considered as very low. Nearly 25 to 40 per cent of the population in India suffers from Malnutrition. The Average protein content in the Indian diet is about 49 grams only per day in comparison to that of more than double the level in the developed countries of the world.
Poor quality of Human Capital
Indian economy is suffering from its 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. As per 2011 census, 74 per cent of the total population of India is literate and the rest 26 per cent still remains illiterate.
Inadequate development of economic organization
Poor economic organisation is another important characteristic of the Indian economy. For attaining Economic Development at a satisfactory rate certain institutions are very much essential. As for example, for mobilisation of Savings and to meet other financial needs, more particularly in the rural (areas, development of certain financial institutions are very much essential.
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India is a developing country with a population of over 1.3 billion people. It is the world’s second most populous country, after China. India has a low per capita income, a high Population Growth rate, a high level of POVERTY, a low level of Literacy, a low level of industrialization, a high dependence on agriculture, a high level of unemployment, a high level of inequality, poor infrastructure, a weak financial system, a high level of Corruption, political instability, and an uncertain economic Environment.
India’s low per capita income is a major challenge for the country. The average Indian citizen earns less than $2,000 per year. This low income level makes it difficult for people to afford basic necessities such as food, clothing, and shelter. It also makes it difficult for businesses to invest and grow.
India’s high population growth rate is another major challenge. The country’s population is growing at a rate of about 1.2% per year. This rapid population growth puts a strain on the country’s resources, such as food, water, and energy. It also makes it difficult to provide basic Services such as Education and healthcare to all citizens.
India’s high level of poverty is another major challenge. About 22% of Indians live below the Poverty Line. This means that they live on less than $1.25 per day. Poverty is a major cause of hunger, malnutrition, and disease. It also makes it difficult for people to get an education and find a job.
India’s low level of literacy is another major challenge. About 28% of Indians are illiterate. This means that they cannot read or write. Illiteracy makes it difficult for people to get a job and improve their lives. It also makes it difficult for people to participate in the democratic process.
India’s low level of industrialization is another major challenge. The country’s manufacturing sector is relatively small. This means that there are not enough jobs in the manufacturing sector to absorb the country’s growing workforce. It also means that India is not able to produce enough goods to meet its own needs.
India’s high dependence on agriculture is another major challenge. About 60% of Indians live in rural areas and depend on agriculture for their livelihood. This high dependence on agriculture makes the country vulnerable to changes in weather patterns and commodity prices. It also makes it difficult for people to move out of poverty.
India’s high level of unemployment is another major challenge. The country’s unemployment rate is about 6%. This high unemployment rate makes it difficult for people to find a job and support themselves and their families. It also makes it difficult for businesses to find workers.
India’s high level of inequality is another major challenge. The gap between the rich and the poor is growing wider in India. This high level of inequality makes it difficult for people to move up the economic ladder. It also makes it difficult for the country to achieve its full economic potential.
India’s poor infrastructure is another major challenge. The country’s roads, bridges, and Airports are in poor condition. This poor infrastructure makes it difficult for people to travel and businesses to operate. It also makes it difficult for the country to attract foreign Investment.
India’s weak financial system is another major challenge. The country’s banks are not well-regulated and are prone to fraud. This weak financial system makes it difficult for businesses to get loans and for people to save Money. It also makes it difficult for the country to attract foreign investment.
India’s high level of corruption is another major challenge. Corruption is widespread in India. It affects all levels of government and business. Corruption makes it difficult for businesses to operate and for people to get things done. It also makes it difficult for the country to attract foreign investment.
India’s political instability is another major challenge. The country has had a number of political crises in recent years. This political instability makes it difficult for the government to implement reforms and for businesses to plan for the future. It also makes it difficult for the country to attract foreign investment.
India’s uncertain economic environment is another major challenge. The country’s economy is growing rapidly, but it is also volatile. This uncertain economic environment makes it difficult for businesses to plan for the future and for people to save money. It also makes it difficult for the country to attract foreign investment.
Despite these challenges, India is a country with great potential. It has a large population, a young workforce, and a growing economy. If India can address its challenges, it has the potential to become a major economic power in the world.
Here are some frequently asked questions and short answers about the basic characteristics of the Indian economy as a developing economy:
What is a developing economy?
A developing economy is an economy that is in the process of industrialization and modernization. Developing economies are typically characterized by low per capita income, high levels of poverty, and rapid population growth.What are the characteristics of a developing economy?
The characteristics of a developing economy include:- Low per capita income: Developing economies typically have low per capita income, which means that the average person in the country earns a relatively small amount of money.
- High levels of poverty: Developing economies also typically have high levels of poverty, which means that a large proportion of the population lives below the poverty line.
- Rapid population growth: Developing economies often have rapid population growth, which can put a strain on resources and infrastructure.
- Low levels of education and healthcare: Developing economies often have low levels of education and healthcare, which can limit the opportunities for people to improve their lives.
High levels of corruption: Developing economies often have high levels of corruption, which can hinder economic growth and development.
What are the challenges facing developing economies?
The challenges facing developing economies include:- Poverty: Poverty is a major challenge facing developing economies. Millions of people in developing countries live in poverty, which means that they do not have enough money to meet their basic needs.
- Inequality: Inequality is another major challenge facing developing economies. The gap between the rich and the poor is often very wide in developing countries.
- Lack of education: Lack of education is a major challenge facing developing economies. Many people in developing countries do not have access to quality education, which limits their opportunities for employment and advancement.
- Lack of healthcare: Lack of healthcare is another major challenge facing developing economies. Many people in developing countries do not have access to quality healthcare, which can lead to poor health outcomes.
Corruption: Corruption is a major challenge facing developing economies. Corruption can hinder economic growth and development.
What are the opportunities for developing economies?
The opportunities for developing economies include:- A large and growing population: Developing economies have large and growing populations, which can provide a large workforce and a large market for goods and services.
- Natural resources: Developing economies often have abundant natural resources, which can be used to fuel economic growth.
- Low labor costs: Developing economies often have low labor costs, which can make them attractive to foreign investors.
Technological advances: Technological advances are making it easier for developing countries to compete in the global economy.
What is the future of developing economies?
The future of developing economies is uncertain. However, there are some reasons to be optimistic about the future of developing economies. Developing economies are growing rapidly, and they have a number of advantages, such as a large and growing population, natural resources, and low labor costs. However, there are also some challenges facing developing economies, such as poverty, inequality, lack of education, lack of healthcare, and corruption. It is important to address these challenges in order to ensure the future prosperity of developing economies.
Here are some MCQs on the basic characteristics of the Indian economy:
Which of the following is not a characteristic of a developing economy?
(A) Low per capita income
(B) High population growth rate
(C) Rapid industrialization
(D) High level of technologyWhich of the following is the main source of employment in India?
(A) Agriculture
(B) Industry
(C) Services
(D) ManufacturingWhich of the following is the main export commodity of India?
(A) Petroleum
(B) Gems and jewelry
(C) Software
(D) TextilesWhich of the following is the main import commodity of India?
(A) Petroleum
(B) Gold
(C) Machinery
(D) Iron and steelWhich of the following is the main Foreign Exchange earner for India?
(A) Tourism
(B) Remittances
(C) Exports
(D) Foreign Direct InvestmentWhich of the following is the main foreign exchange spender for India?
(A) Imports
(B) Debt servicing
(C) Foreign direct investment
(D) TourismWhich of the following is the main source of government revenue in India?
(A) Taxes
(B) Borrowing
(C) Disinvestment
(D) Foreign aidWhich of the following is the main source of government expenditure in India?
(A) Subsidies
(B) Interest payments
(C) Defense
(D) Social sectorWhich of the following is the main economic problem faced by India?
(A) Poverty
(B) Unemployment
(C) Inflation
(D) Balance of Payments deficitWhich of the following is the main economic policy of the Indian government?
(A) Economic Liberalization-2/”>Liberalization
(B) Privatization
(C) Globalization/”>Globalization-3/”>Globalization
(D) Deregulation
Answers:
1. (D)
2. (A)
3. (B)
4. (A)
5. (C)
6. (A)
7. (A)
8. (A)
9. (A)
10. (A)