Features of Indian Economy

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Introduction

People around the world know each economy by its own unique traits or characteristics. Economies are compared to each other based on these things. On August 15, 1947, India became its own country. This was called the independence day of India because it marked the end of British rule in India. That's when India became an independent country on August 15, 2013. It has been 66 years since that day. This time period is long enough to look at the country's position and performance and compare it to other countries around the world, as well as to look at how the country has changed over the past few years. With this in mind, the next lesson talks about the Indian economy. People who live in India have some unique things about their economy.

Every economy in the world has its own characteristics or features by which it is known or identified. Economies are compared with each other on the basis of these features. India as a distinct nation came into existence on 15th August 1947, called the independence day of India which marked the end of British rule over India. After that, Independent India has completed 66 years of self-rule on 15th August 2013. This period is long enough to evaluate the position and performance of the country to enable comparison with other countries in the world as well as evaluate its own progress over the years. With this view in mind, the current lesson provides the features of the Indian economy.

Mumbai, the financial centre of India

FEATURES OF INDIAN ECONOMY

Low per capita income

The world knows India as a country that has a lot of people making very little money per person. Per capita income is the ratio of national income to the number of people in the country. It gives an idea of how much an Indian citizen makes on average in a year, even though this may not be true for each person. Per capita income for the year 2012-2013 is thought to be'39,168. About'3,264 per month. Because India has less money per person than most countries in the world, it can be seen that India is behind many of them. When it comes to money, the United States has a per capita income 15 times higher than India, and China has a per capita income more than three times higher than India,

Heavy population pressure

There are more people in India than there are in China. India has more than 121 million people. Between 1990 and 2001, it went up at a rate of 1.03 percent. The main reason why India's population has grown so quickly is that the death rate has dropped a lot, but the birth rate hasn't. There are two types of rates: death rate and birth rate. 2010 was a good year for births. There were 22.1 people born for every 1,000 people, and there were only 7.2 people who died for every 1,000. Having a low death rate isn't a bad thing, Indeed, it is a sign of growth. A low death rate means that the public health system is better. But having a lot of babies is bad because it causes the population to grow. It was after 1921 that India's population grew very quickly because the birth rate went down very slowly and the death rate went down very quickly! Death rate also went down from 49 in 1921 to just 7.2 in 2010. Because of this, the population grew very quickly in India, so it was very big. Having a lot of people is a big problem for India right now. It has put a lot of pressure on the public purse to find enough money to provide public education, health care, infrastructure, and other things.

Farming is a major source of income for this country

Most of the people who work in India do agricultural work to make money. In 2011, about 58 percent of India's working people were in agriculture. In spite of this, agriculture makes up about 17% of India's GDP. In India, a big problem with farming is that there isn't a lot of production in this field. This is because there are a lot of reasons why this is the case There is a lot of pressure on land to be able to support a lot of people. People are putting a lot of pressure on land, so the amount of land available per person is very low. This makes it impossible to get more out of the land. Two, because there is less land per person, many people have to work as agricultural labourers for low wages. Three, Indian agriculture isn't very good because it doesn't have a lot of good technology or water. Four, a lot of people who aren't well-educated or don't know how to do their jobs well are in agriculture. So it adds to the low productivity in farming.

Poverty and inequality

Another thing that is very sad about India is that it has the most poor people in the world. The government of India says that about 269.3 million people in India were poor in 2011-12. This was about 22% of the people in India. A person is poor if he or she can't eat enough food to get a minimum calorie value of 2400 in the rural area and 2100 in the city. There must be enough money for this, too. People in rural areas need to pay'816 a month, and people in cities need to pay'1000 per month. Around'28 in the countryside and'33 in the cities, each person spends about'28 per person per day. This is called the "poverty line," and it shows how much money you can This means that 269.9 million people in India were not able to make this much money in 2011-12. Poverty is caused by a lack of income and wealth distribution. Only a very small group of people in India have a lot of money and materials. Most people have no or very little land, a house, fixed deposits, shares of companies, savings, and so on. People in India's top 5% of households own about 38% of the country's total wealth, while the bottom 60% own just 13% of the country's total wealth. This shows that a lot of economic power is held by a few people. Another problem that is linked to poverty is the problem of unemployment. Indians are poor because there aren't enough jobs for all the people who work in the country. Adults who are willing to work are part of the labour force, which is made up of those people. Unemployment will get worse if not enough jobs are made each year. As the population grows, there are more educated people, and businesses don't grow at the rate they should. This means that every year a lot of people are added to the labour force. So far, we've talked about the negative aspects. There are also some good things about the Indian economy. They are talked about below.

Rate of capital formation or investment is faster

There were not enough land and buildings, machinery and equipment, savings, and other things to invest in when India became a country. This was a big problem at the time. In order for economic activities like production and consumption to keep going, a certain amount of production must be saved and invested. It didn't happen for the first four to five decades after independence. The simple reason for this is that more people were buying things they needed, which made them more likely to be poor or in the middle class. It was very hard for families to save together because of this. People also didn't use a lot of durable things when they went out. Then in the last few years, things have charged up. Economists say that in order to keep up with the growing population, India needs to invest 14% of its GDP. For the year 2011, India had a savings rate of 31.7%. There was a 36.6 percent rate of growth in gross capital formation. People can now save money in banks, buy durable goods, and there has been a lot of money spent on public utilities and infrastructure.

People have a plan for how the economy works.

This means that India is a country that has been planned out. From 1951 to 1956, it had its first five-year development plan. Since then, it has been going through five-year plans. People already know that planning can be a good thing. Planning helps the country figure out what it wants to do first and how much money it will need to do it. Accordingly, efforts are made to get resources from as many sources as possible at the least cost. India has already completed 11 five-year plan periods, and the 12th plan is in the works, so it's already over. It's done after every plan. It looks at what worked and what didn't. Things are fixed in the next plan, as a result. As of today, India has a growing economy and is seen as a future economic power all over the world. Indians are making more money per person than they did before. India is thought of as a big market for a lot of different things. Planning in India has made it possible for all of these things to be done.

In India, agriculture plays a big part in the country.

People in India live mostly on land that is used for farming and other land-based jobs. In this country, it is the main source of food and raw materials for the people. During the time of independence, more than 70 percent of India's people worked in the fields to make money. There were a lot of people in 1950-51 who worked in agriculture, and their share of the country's income or product was 56.6 percent. However, with the growth of industries and the service sector during the plan periods, the percentage of people who depend on agriculture as well as the percentage of the country's GDP that comes from agriculture has dropped. 74 percent of people worked in agriculture in 1960, but that number dropped over the years to 51 percent in 2012. People who worked in both industry and service sectors made up 11 and 15 percent of people who worked in the 1960s. But in 2012, these shares rose to 22.4 and 26.5 percent. Most of the time, as the economy grows, more people move from farming to jobs in industry and service industries. Agriculture is the source of the food we eat. The amount of food grains grown has gone up from 55 million tonnes in 1950-51 to 259 million tonnes in 2012-2013. Because of the rise in food grain production, India no longer needs to buy food grains from other countries. It has almost stopped. Keeping in mind the rapid growth of India's population, more food grain was a must, which the country did very well at. Food grains have increased, except for pulses. This has been made possible by a rise in cereals and other cash crops, as well as a rise in food grains. Agriculture is also a big source of money for the country that sells things to other countries. In the year 2011-12, 12.3% of India's exports came from agriculture, which was a big part of the country. Tea, sugar, tobacco, spices, cotton, rice, fruits, and vegetables are some of the main things that are exported from the country.

Industry in India has grown over the last few years

Industry, or the second part of the economy, is another important part of the economy. Government: After Indian independence, the government stressed how important industrialization would be to the country's long-term economic growth. In 1956, the Industrial Policy Resolution (IPR) was passed, and it set out a plan for industrial growth. A big part of the 1956 policy was to get more heavy industries up and running, with the public sector taking the lead in this area. On the surface, the decision to use a strategy called "heavy or basic industries" was a good one because it would lessen the burden on farming, allow more growth in the production of consumer goods and small businesses, and help the country become more self-sufficient. There was a lot of growth in the economy after the IPR was approved in 1956. This happened during the second and third plan periods, which were from 1956 to 1961 and 1961 to 1966. The public sector was the main source of this growth. But at the end of the 1960s, investment in industries was cut back, which slowed down its growth rate. In the 1980s, this trend started to change. Investment in industries like power, coal, and rail was increased by making the infrastructure for these industries, like power, coal, and rail, much stronger. In the early 1990s, it was found that public sector projects were not meeting expectations. There have been reports of people mismanaging these takeovers, which led to a loss. So in 1991, the government of India decided to let the private sector play a bigger role in industrial development, get rid of the rigid licencing system, and let both domestic and foreign businesses compete in the country and look for new places to go. This is called "liberalisation." People in the country took all these steps in order to speed up the process of industrialization. Liberalization, privatisation, and globalisation (LPG) is the name of this kind of development in the world of business. In 1991, when this new policy was put in place, there have been periods of growth and then periods of slowdown in the process of industrial growth. In the early 1990s, there was a big rise in industrialization because of more investment in infrastructure, less excise duty, and more money for businesses. There was a lot of competition from international businesses and not enough infrastructure support at the end of the 1990s, which made the growth rate slow down a lot. Then, between 2002 and 2008, there was a little bit of a recovery because the saving rate went up from 23.5 percent in 2001-2 to 37.4 percent in 2007 and 2008. Even the competition from the foreign companies helped during this phase. The domestic companies were able to build up enough internal strength in terms of quality control, finance, and customer service to be able to compete with the foreign companies. Some industrial growth slowed down after 2008-09 because of a rise in petroleum prices, interest rates, and borrowings from outside the country. This has left the domestic companies with a lot of debts.

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