CHARACTERISTICS OF INDIAN ECONOMY
 |
| CHARACTERISTICS OF INDIAN ECONOMY |
CHARACTERISTICS OF INDIAN ECONOMY
The economy of india Is the ninth largest in the world
by nominal GDP and the fourth by purchasing power parity (PPP).The country's
PPP was $ 3408 in 2010,making it a lower middle income economy was then
characterized by extensive regulation, protectionism,public ownership ,pervasive
corruption and slow growtIh Since 1991,following the economic reforms, the
country's economic growth progressed at a rapid pace with very high rates of
growth and large increases in the incomes of the people.By 2008,India has
established itself as the world's second fastest growing major economy .
India's Gross Domestic product (GDP) growth rate was recorded at 7.4% in
2009-10 and 8.6%-9%are projected for the financial year 2011-2012.
India's large service
industry accounts for 57.2% of the country's GDP while the industrial and
agricultural sectors contribute 28.6% and 14.6% respectively .Agriculture is
the predominant occupation in rural India,accounting for about 52% of
employment. The service sector makes up further 34% and industrial sector
around 14%.
Major industries include
telecommunication,
textiles,chemicals,food processing,steel,transportation equipment
pharmaceuticals.Major agriculture products includes rice,wheat,oil
seed,cotton,jute,tea,sugarcane,potatoes,cattle,water
buffalo,sheep,goats,poultry and fish.Previously a closed economy, India's trade
and business sector has grown fast. India's currently accounts for 1.5% of
world trade in 2009-10.India's top five trading par-triers are United Arab
Emirates ,China,United States,Saudi Arabia and Germany.
Agrarian Economy Even after 60 years of
independence,it dominant the Indian economy.More than 60% of the population is
engage in agriculture and allied activities,Based on this,it can be said that
Indian economy is still primarily Agrarian Economy.
Mixed Economy After independence, India has
opted for mixed economy.Indian Economy is a unique blend of public and private
sector i.e., mixed economy.It allows co-existence of public and private sector.
Low Per Capita
Income Underdeveloped
economy is characterized by low per capita income is very low as compared
to the developed countries,According to world Development Report,2010,India's
per capita income was $1070 in 2008,Whereas, USA's per capita income is $ 4780
and hence India's per capita income is about 1/45 of US level of per capita.
This trend of difference of per capita income between underdeveloped and
developed countries is gradually increasing in present time.
Heavy Population
Pressure The Indian economy is
facing the problem of population explosion.It is second highest populated
county. China being the first.All the under developed countries are
characterized by high birth rate which stimulates the growth of
population.The fast rate of growth of population necessitates a higher rate of
economic growth to maintain the same standard of living.
Disparities In Income
Distribution Inequality of
income and wealth is other feature of Indian Economy and the main resources are
concentrated in the hands of the few people,40% of the total assets is
concentrated in the hands of top 20% people.According to data shown by NSSO,
39% of rural population possesses only 5% of all the rural areas while,on the
other hand,8% top household possess 46% of total rural assets. Income
disparities ate some what more intensive in urban areas as compared with
those of rural areas.
Planning Process It is also an important feature. As the
government has adopted plan developmental economy. Five year plans are framed
for economic development.
Dominance of Agriculture
and Heavy Population Pressure on Agriculture Agriculture and allied sector even today
provides livelihood to about 65 to 70% of the total population but contributes
only 15.7% of the GDP.
Unbalanced Economy
Growth India has not achieved
the goal of balanced economic growth.According to world development report,2010
about 64% of total labout force is dependent on agriculture and rest about 20%
on trade,transport and other services.
Low Rate of Capital
Formation In backward economics
like India,the rate of capital formation is also low due to low national income
and high consumption expenditure.Gross Domestic Saving in 2009-10 is 33% while
in the same year,Gross Domestic Capital formation is 36.5%.
Lack of
Industrialization India
lacks in large industrialization based on modern and advanced technology,which
fails to accelerate the pace of development in the economy.Average annual
growth rate of industrial sector was 8.0% in 2009-10.
Under Utilization of
Resources India is a poor land so
its people remain economically backwards for the lack of utilization of
resources of the country.
Market
Imperfection Indian economy faces a
number of market imperfections like lack of mobility among production factor
from one place to the other and lack of specializations which hinder the
optimum utilization of available resources.All these market
imperfections and their results are important reasons for underdeveloped Indian
economy.
Unemployment The larger unemployment and under employment is
another feature of Indian economy.
Backward Institutions
and Social Framework The
social and institutional framework in India is hopelessly backward,which is
strong obstacle to any change in the forms of production.
Price
Unsuitability In Indian economy,there
is always continuous price instability.Shortage of essential commodities and
gap between consumption and productions increases the price persistently.Rising
trend of price creates a problem to maintain the standard of living of the common
people.
CHARACTERISTICS OF INDIAN ECONOMY
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RANK
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9TH (NOMINAL)
4TH (PPP)
|
|
GDP
|
$
1.632 TRILLION (NOMINAL)
$
4.057 TRILLION (PPP)
|
|
GDP
GROWTH
|
8.5%
(2010-11)
|
|
GDP
PER CAPITA
|
$1371(NOMINAL),(138TH ,2010)
$
3408(PPP) (129TH ,2010)
|
|
GDP
BY SECTOR
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SERVICES
55.2%
INDUSTRIES
26.3%
AGRICULTURE
18.5%
|
|
POVERTY
|
37%(2010)
|
|
UNEMPLOYMENT
|
9.4%(2009-10)
|
|
INFLATION
|
9.39%
(NOVEMBER 2011)
|
|
AVERAGE
GROSS SALARY
|
$
1371 YEARLY (2010)
|
|
EXPORTS
|
$
225.6 BILLION (2010)
|
|
IMPORTS
|
$
357.7 BILLION (2010)
|
|
FDI
STOCK
|
$
35.6 BILLION (2009-10)
|
|
FOREIGN
RESERVES
|
$
319 BILLION (2011)
|
|
GROWTH
RATES
|
SERVICES
9.6%
INDUSTRIES
8.7%
AGRICULTURE
5.4%
|
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