what are the characteristics of the Indian economy
Answers
The characteristics are
Indian economy is a developing economy.
Indian economy is a mixed economy, both public and private sector coexist and participate in production process.
It is characterized by high population density and population growth.
Approx 30% live below poverty line.
There is high level of unemployment, under employment and disguised employment.
The level of technology used in production process is low.
There is shortage of physical and economic structure.
It is liable to fluctuate according to world market.
Service sector contributes to more than half of the GDP, while half of the working population involved in agriculture.
It is expected to grow as the world second largest economy in 2050, behind China.
Occupational Pattern – Primary Producing
One of the fundamental characteristics of India as a developing economy is that it is majorly primary producing. What this means is that a majority of the population is engaged in agriculture (around 52 percent).
However, in 2011-12, the contribution of agriculture to the national income was only 13.9 percent. This disparity is slowing India’s progress.
The reason behind this difference is that agriculture is a low income earning sector. Also, productivity per person engaged in agriculture is very low.
Learn more about Infrastructure and Economic Development in India here in detail.
Population Pressure
Try to read this number: 1,362,099,836.
It is 1.36 billion – the population of India as on January 17, 2019, 21:30 hours. We are the second most populated country in the world and our population is equivalent to around 17.74% of the total world population.
In India, the high levels of illiteracy lead to a high level of birth rates. Further, improvement in medical facilities has increased the average life of an Indian citizen and led to a decline in the death rates too.
Chronic Unemployment and Under-Employment in India
Due to the deficiency of capital in India, it is difficult to engage the entire population in gainful employment.
Therefore, a cheap labor force is available in abundance. As a result, there is chronic unemployment and under-employment in our country.
Steady Improvement in the Rate of Capital Formation
In 2017, the population growth rate in India was 1.13%. Therefore, the economy needed a high amount of investment to offset the additional burden imposed by the rising population.
This balance is critical to maintaining the costs of living. Otherwise, there is a risk that we could achieve growth only at the expense of unacceptable inflation.
Inequality in Wealth/Asset Distribution
Unequal asset distribution is the primary cause of inequality in income distribution in rural areas.
This inequality also highlights the fact that the resource base of 50 percent of households in India is weak.
It is so weak that it can barely provide them with anything above the subsistence level of income.
Poor Human Capital Quality
It is a simple equation. Underdeveloped countries have millions of illiterate citizens. Also, illiteracy retards growth since an individual needs a minimum level of education to acquire skills and/or understand social issues.
Low-levels of Technology
India is a country of eclectic mixes. One one side, a company uses one of the most modern technologies while another company from the same industry uses the most primitive one.
Unfortunately, according to modern scientific standards, the majority of products are made with the help of inferior technologies.
If you take a simple look at the productivity of a developed and underdeveloped nation, then the developed nation has better productivity since it uses superior technologies.
Low Level of Living of an Average Indian
In India, most citizens have a low-calorie intake and also consume low levels of protein thereby failing to secure a balanced diet. One contributing factor is the domination of cereals in our diet.
In contrast, citizens of developed countries consume a rich diet which includes fish, fresh fruits meat, sugar, and butter.
Currently, Indians consume nearly half the amount of protein that a citizen of a developed country does. The result, lesser immunity against diseases and lower efficiency at work. Additionally, the housing scenario is bleak as well.
Demographic Characteristics
Demographically speaking, India has a high density of population with high infant mortality rates and comparatively lower life expectancy as compared to the developed countries. This makes it an underdeveloped economy.
Further, in India, the population density was 412 per square kilometer (in 2010). In comparison, the population density of the USA was 34 per square kilometer.
In fact, even China has a population density of 143 per square kilometer. Therefore, there is a lot of burden on land and other natural resources in India.
Also, India has a huge problem of harnessing the working age population in emerging areas of the economy.