Rajasthan Board RBSE Class 10 Social Science Notes Chapter 15 Features of Indian Economy and its Trends
Economy is a system in which activities of production, consumption, etc takes place.
Indian economy shows mixed features of an underdeveloped as well as a developing economy.
India can be called as underdeveloped economy because of features like – low per capital income, low standard of living, poverty, dependency on agriculture, unemployment, use of outdated techniques, low human development index.
Per capital income of the country is 1590 $ (World Bank 2015). It stands on 170 on the basis of per capital gross national income. It is even low than countries like China and SriLanka.
Literacy level in India is quite low as it is only 74.04% (population census 2011).
Life expectancy at the time of birth refers to the average number of years a new born is expected to live if mortality pattern at the time of birth remains constant. According to World Bank life expectancy in 2014 was 68 years in India.
Around 21.92% people were poor in India in 2011-12. Poverty is a situation in which a person is not able to fulfill his basic needs.
At the time of independence 72% of the population was dependent on agriculture and allied activities. Still 49% of people are engaged in it. High dependency on agriculture is a sign of underdeveloped economy.
Demography refers to scientific and statistical study of human population.
Every year India’s population increases by the population of Australia. During 2001-2011 population growth rate of India was 17.64%.
Disguised unemployment refers to a situation in which more people are engaged in an activity than the required. If surplus labor is removed then there is no effect on production.
Structural unemployment refers to a situation where people get unemployed due to change in structure of the economy or sector.
Technology plays a very important role in development process along with the availability of natural resources.
HDI rank of India is 130 whereas China ranked 90th and Sri Lanka ranked 73rd.
All those things which helps in building social and economic structure of the country is called as infrastructure. Infrastructure increases productivity and leads economic development. Example: transportation, education, health, power services etc.
Infrastructure can be divided in two types- social infrastructure and economic infrastructure.
Social infrastructure refers to the structure of the economy which enhances society. It indirectly helps in economic growth. Examples are education, health, sanitation etc.
Economic infrastructure directly helps in economic growth of a country. Such as power, transportation facilities etc.
India shows some features of developing economy too such as rapid increase in national income and per capital income, structural changes, rapid increase in service sector, improvement in economic and social infrastructure, decrease in growth rate of population, increase in foreign trade, etc.
Before 1991 government laid many restrictions on private sector and public sector which played a vital role in development process. There was no fiscal discipline as public expenditure was increasing rapidly. Their was increase in trade deficit and deficit balance of payment.
Government was forced to impose new economic policy in 1991 due to huge fiscal deficit, defective economic structure and crisis of balance of payment.
In 1990-91 economic reforms took place in India. Its objective was to improve the economic and structural conditions and to improve efficiency of the country.
The economic reforms were implemented through the process of liberalization, privatization and globalization. The policy was called as LPG policy or New economic policy.
Liberalization refers to a process of simplifying economic policies, rules and regulations. Under it government decreased its interference and the economy moved towards the path of free and capitalist economy.
Privatization refers to the process of expansion of private sector. It means transferring the ownership of public sector company to private sector.
Globalization refers to integrating domestic economy with the global economy. It is a process in which national economy is expanded beyond the political territory. Various aspects of globalization includes free movement of goods, services, capital, labor, knowledge, finance, technology etc.
Multinational companies are those companies which have control over production of a commodity in more than one country.
Swadeshi refers to an ideology which emphasizes on goods and services produced by the Indian companies.
Skill development refers to process of enhancing the skills of youth of the nation so that youth becomes employable and have more opportunities to progress.
Government has started national skill development mission on 15 July 2015 on the occasion of World Youth Skill Day. The President of this mission is Prime Minister Narendra Modi.