Charecteristic of Indian Economy

8/2/2019 Charecteristic of Indian Economy

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Comparison of Indian economyTimes larger than India

China3,899

3.2Germany 3,486 2.9

Japan 4,879 4.0

Switzerland 499 0.41

USA 14,466 11.9

World 57,638

As per World development report 2010


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x PCI in selected countries (2008)

Country PCI ($) Times larger than India

India 1,070 Norway 87,070 81.4

Switzerland65,330 61.1

Germany 42,440 39.7

USA 47,580 44.5

Japan 38,210 35.7

China 2,940 2.7

World 8,613 8.0


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INDIA = $2149 (1999) = $2960 (2008)

y Country PCI (PPP$) Times higher than India

y Norway 58,500 19.8y USA 46,970 15.9

y Switzerland 46,460 15.7

y Japan 35,220 11.9

y Germany 35,940 12.1

y China 6,020 2.0

y World 10,357 3.5


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y primary producingy Typical indicator of underdeveloped

economiesy

a high share in NI and Employmenty in 1998:y INDIA: 61% of working population in agri and

contributed 25% to NI

y In 2001: 58% and 27% respectively- 2004-05:56.5% & 20.2% / Whereas, in USA and UK only2% of population in agriculture (data for 1998)

y In Japan-5% , In China69%, In India- 61%


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High level of birth rates and falling death rates.

16 % of world pop growth is from India (largest by 2050)

Population Growth rate (India):

1941-50 = 1.3% 1981-98 = 2%

Between 1990-2003: Population Growth rate

India 1.7%

China 1.0%

World 1.4%


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Steep fall in death rate:

1911-20 = 49 per thousand

2001-02 = 8.1 per thousand

Birth rate:



Hence, higher growth rate in economy needed to

maintain the same std of living. (growing demands

of food, clothing, shelter, medicine, schooling etc.)

--Rising population = rising labour force leading

to unemployment = wastage


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Industrial sector unable to expand fast to absorb thelabour force

But in developed economies: it is cyclical.

Agriculture: = disguised unemployment

No of non-farm employment in rural areas.

More than 2% of labour force=open unemployment8.43% = underemployment.Hence, total unemployment = 10.45% of labourforce.(more recent figures put it at 8.28%) about 34.74million


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Amount of capital per head is low: evidence:

2 indicators of this: Consumption of crude steel and energy

Source: WDR (00-01)

Per capita consumption ofCountry

Crude steel ( kg) (1987) Energy (kgs of oil

equivalent (1997)

USA 417 21 times higher 8076 17 times

UK 259 13 3863 8

Japan 582 29 4084 8.5

China 64 3.2 907 1.9

India 20 479


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9.4% in 2006-07.

9% in 05-06. The highest growth rate during the last 18

years

But agriculture sectorgrew by only 2.7%(against a target of 4%).

Targeted growth rate for GDP for 11th

Plan = 9%.


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y As per RBI All India Debt and InvestmentSurvey1991-92 (RBI Bulletin, May,1999)

y In rural areas:

yNearly 51% of the bottom households

owned just 10% of the total assets;whereas, 9.6% of the rich households(owning assets worth Rs.2.5 lakhs andabove) accounted for nearly 49% oftotal assets.


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illiteracy; conservatism and superstition .

HDI rankings: India(.612) = 134th (2007) (China(0.772)=92, Norway=1st, (0.971) USA=8th,

JAPAN=10th), Australia = 2nd

as per HDR,2009), (out of 182 countries)


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In an LDC usually mostmodern techniques existside by side with primitive

techs.

but as compared toDeveloped countries their

technological stds areinferior generallyaffects

their productivity.

basic conditions requiredfor absorption of new

and superior technologylike: basic edn.levels,

trained/skilledmanpower, and

adequate capital.

The low productivity perhectare in agri and low

labour productivity in agri+ industry = due to

technological

backwardness.

The poor farmers do nothave the means to buyimproved inputs, tools,not to speak of more

expensive machines liketractors, sowingmachines etc


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Low calorie intake and low intake of protein

In 1996: The average calories intake of food was only2,415 whereas in most developed countries it was 3,400calories (minimum required for sustaining life is = 2,100

cal ). The average protein content of the Indian diet is only 44

grams/day while for developed world, it is double this.

In India cereals predominate (whereas in developedcountries, it is rich with intake of meat, fish, butter, sugar

and fruits) --Our cereal consumption is 470 calories/day against the

requirement of 400 cal/day per adult.


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42% of population suffers from malnutrition

--the average protein content of Indian diet (at

44gms/day) is only of that in developedcountries.

--per capita availability of milk is also lower.

--nearly 60% of the mothers are malnourished.

--46% of child pop in India suffers from

malnutrition

-- in 1996, only about 85% of population had

access to safe drinking water. (90-91: only81%; W Europe = 99%+more; China =90%


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In 2004-05:

About 40% adults suffered from chronic energy

deficiency 35% of workers were illiterate

20% of workers were in the households below

poverty line.


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UNDERDEVELOPEDECONOMY: =

--high density ofpopulation

--large % ofpopulation in theage group of 0-15and lower in the

working age groupof 15-60.

--low average lifeexpectancy ratio +high infant mortality

rates.

India: Density =358 persq.KM (2003)

For the world as awhole = 48 per

sq.Km.

USA = 32; Japan

= 4390; Germany =237; Canada and

Australia = 3


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INDIA S RANK over all in someAREAS

Population 2

Land 7Rice prodn - 2,Wheat prodn- 2

Tobacco prod 2, Tea prodn 1

Milk prodn-1, Butter & ghee1

Sugar prodn 2

India has the largest number ofBillionaires in Asia (36) ( $100 cr

asset


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Thank you

Charecteristic of Indian Economy

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