Every economy in the world has its own characteristics or characteristics by which it is known or identified. Economies are compared with each other based on these characteristics. India was born as a separate nation on August 15, 1947, known as India's Independence Day, marking the end of British rule over India. Since then, independent India has completed 66 years of self-government on August 15, 2013. This period is a long time to compare with other countries of the world to evaluate the condition and performance of the country, as well as to evaluate its own progress over the years. . With this view in mind, the current blog provides the characteristics of the Indian economy.
(i) Low per capita income India is known worldwide as a country with a per capita income. Per capita income is defined as the ratio of national income to population. It gives an idea of the average income of an Indian citizen in a year, although this may not reflect the actual income of each person. India's per capita income for the year 2012-2013 is estimated at `39,168. This comes to about 3,264 per month. If we compare India's per capita income with other countries in the world, it can be seen that India lags far behind. For example, US per capita income is 15 times higher than India's, while China's per capita income is three times higher than India's.
(ii) Strong demographic pressure India is the second most populous country in the world after China. According to the 2011 census, India has a population of over 121 million. It has grown at a rate of 1.03 per cent during 1990-2001. The main reason for the rapid growth of India's population is the sharp decline in mortality, while the birth rate has not declined as fast. The mortality rate is defined as the number of deaths per thousand inhabitants, while the birth rate is defined as the number of people born per thousand inhabitants. In 2010, the birth rate was 22.1 people per thousand inhabitants, while the death rate was only 7.2 per thousand inhabitants. Low mortality is not a problem. In fact, it is a sign of growth. Lower mortality reflects a better public health system. But low birth rate is a problem because it directly drives population growth. After 1921, the population of India increased very rapidly, as the birth rate slowed down very much, while the death rate decreased very rapidly. From 49 in 1921, the birth rate dropped to 22.1 in 2010, while during the same period, the death rate dropped from 49 to 7.2. Therefore, population growth in India was very fast. Strong demographic pressures have become a major source of concern for India. To mobilize sufficient resources to provide public education, health care, infrastructure, etc., emphasis has been placed on public money.
(iii) Dependence on Agriculture Most of India's workforce is dependent on agricultural activities for their livelihood. In 2011, about 58% of India's workers were engaged in agriculture. Despite this, agriculture contributes only more than 17% to India's GDP. One of the major concerns of agriculture in India is that productivity in this sector is very low. There are many reasons for this. There is strong pressure from the population on the land to maintain a large number. Due to the population pressure on the land, the per capita availability of land surface is very low and it is not possible to produce more. Two, due to low land availability per capita, most people are forced to do low-wage agricultural labor. Three, Indian agriculture suffers from a lack of better irrigation technologies and facilities. Four, mostly people, who are not educated or sufficiently trained, are engaged in farming. Therefore, it increases low productivity in agriculture.
(iv) Poverty and inequality Another very disappointing thing about India is that it has the highest number of poor people in the world. According to Government of India reports, about 269.3 million people in India were poor in 2011-12. This was about 22% of the population of India. A person is said to be poor if he cannot consume the required amount of food to get a minimum caloric value of 2400 in rural areas and 2100 in urban areas. For this, a person must earn the amount needed to buy food. The government also estimates that 816 per month is needed in rural areas and 1,000 per month in urban areas. This reaches about `28 per head in rural areas and per head in urban areas. This is called the poverty line. This means that 269.9 million people in India were unable to earn so little in 2011-12. Poverty is accompanied by inequality in income and distribution of wealth. Very few people in India have material and assets, while most have little or no control over the assets in terms of tenure, housing, fixed deposits, company shares, savings, etc. In India, only 38 per cent of the total wealth is controlled by 38 per cent households, while the following 1 per cent of households have control over only 1 per cent of the wealth. This indicates a concentration of economic power in very few hands. Another problem linked to poverty is unemployment. One of the most important reasons for India's poverty is the lack of employment opportunities for all those who are part of the country's workforce. The workforce consists of adults who are willing to work. Unemployment will increase if not enough jobs are created every year. Due to population growth in India every year, increase in the number of educated people, lack of necessary expansion in the industrial and service sectors, etc., a large number of people join the workforce. So far we have discussed the negative characteristics. The Indian economy also has some positive characteristics. They are discussed below.
(V) Higher rate of capital formation or investment At the time of independence, one of the major problems of the Indian economy was shortage of capital stock in the form of land and construction, machinery and equipment, savings, etc. In order to continue the cycle of economic activities such as production and consumption, a certain amount of production should go towards savings and investments. However, in the first four or five decades after independence, the required proportions were never generated. The simple reason is the greater consumption of necessities by the population as compared to the majority poor and lower middle class. Because of this the savings of the collective house were very low. Consumption of durable items was also low. But things have taken a turn for the worse in recent years. Economists have calculated that in order to support a growing population, India needs to invest 14 per cent of its GDP. It is encouraging to note that India's savings rate in 2011 was 311.7%. The total capital formation was 36.6 per cent. This is possible because people can now save in banks, consume sustainable goods and invest heavily in public services and infrastructure.
(vi) Planned Economy India is a planned economy. Its development process has continued through the five-year plan of the first period of the scheme during 1951-56. The benefits of planning are well known. Through planning, the country first determines its priorities and provides financial estimates to achieve them. As a result, efforts are made to mobilize resources from a variety of sources at minimal cost. India has completed the eleven year plan period and the twelfth plan is underway. After each plan, achievements and small drops are reviewed. As a result, things have improved in the next plan. Today India is a growing economy and is recognized everywhere as a future economic power. India's per capita income is growing faster than ever before. India is seen as a great market for various products. All this is possible due to planning in India.
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