Characteristic Features of Indian Economy

1. 2. 3. 4. 5. Low per capita income REGIONAL IMBALANCES High incidence of poverty Predominance of agriculture Rapid population growth and high density and dependency ratio 6. Low level of human development 7. Unemployment 8. Scarcity of capital and technological backwardness 9. Low productivity in agricultural sector 10. Lack of entrepreneurship

Low per capita income

AVERAGE GNP PER CAPITA as in 2004: THE HIGH INCOME ECONOMIES Low income countries INDIA USA PPP GNP INDIA PPP GNP USA $32040 $510 $620 $41400 $3200 $39710

REGIONAL IMBALANCE
SOME OF THE STATES DUE TO THEIR BACKWARDNESS ARE CONSIDERED BIMARU STATES THEY ARE AS FOLLOWS BIHAR MADHYA PRADESH RAJASTHAN UTTAR PRADESH

The BIMARU states are distinct from India's other states on a number of social and economic indicators: much higher than average population growth rates; much lower than average literacy rates; much lower than average ratings on nearly all healthcare indices such as malnutrition and infant mortality; slower than average economic growth rates The differences in economic and population growth rates between the BIMARU states and other Indian states sharpened over the 1990s. The economy of the four BIMARU states grew at an average of 4.6% per year in the 1990s, compared to 6.5% per year for India as a whole. Since population growth in the BIMARU states was much higher that the Indian average, the income disparity between the BIMARU states and India as a whole also increased.

High incidence of poverty

Year: RURAL URBAN 1973-74 1993-94 56.4 49.0 37.3 32.4 36 1999-2000 27.09 21.59 26

All INDIA 54.9

Estimates of PLANNING COMMISON

Predominance of agriculture
Year 1950-51 2004-05

CONTRIBUTIO N OF AGRICULTURE TO GDP

59.2%

23%

POPULATION DEPENDENT On Agriculture

69.5%

58%

Rapid population growth and high density and dependency ratio

Year POPULATION 1.25
AVERAGE ANNUAL GROWTH RATE

1951 36.1
(1961-1.96)

2001
102.7

(1971-2.22) (1981-2.20) (1991-2.14)

1.93

BIRTH RATE 39.9/ 1000 24.8/1000

DEATH RATE

27.4/ 1000

8/1000
324 933

DENSITY

117

Low Level of Human Development

.COMPONENTS of HD: Equity, sustainability, productivity, empowerment. H.D is the process of enlarging peoples Choiceslongevity, education, necessities, pollution free environment (life expectancy, Adult literacy, GNP per capita PPP). Country NORWAY HD value-2003 .963 RANK 1

ICELAND
INDIA

.956
.602

2
127/177

Unemployment in India
ORGANISED
(PUBLIC AND PRIVATE)

UNORGANISED 93% 100 89.55 2.02 8.43

7.08% LABOUR FORCE EMPLOYED UNEMPLOYED UNDEREMPLOYED

Unemployment in India (continued)

1972-73 1993-94 RURAL MALE 1.2 FEMALE 0.5
URBAN MALE FEMALE 4.8 9.0

2004
1.4 0.9 4.1 6.1

Low Saving and Capital formation & Technological Backwardness

SAVING 1950-51 8.9 2004-05 29.1 30.1

CAPITAL FORMATION

3.7

REASONS FOR LOW PRODUCTIVITY IN AGRICULTURE

ILLITERACY AVERAGE LAND HOLDING IS VERY SMALL 60% OF STATES DEPEND ON NATURAL RAINFALL 80% OF RAINFALL OCCURS FROM (JUNE TO AUGUST) MANY STATES ARE NOT ADAPTING MODERN AGRICULTURAL PRACTICES INADEQUATE IRRIGATION FACILITIES ONLY 53.6%OF LAND WAS IRRIGATED IN 2001