Rameshwar's IAS

Underdevelopment in the Indian Economy

Tags: Gig Economy Economy WTO WTO Public Stockholding MSP Economic Growth Masala Bond Environmental Performance Index Forecast of Economic Growth Functions of the Finance Commission

Previously known as an Underdeveloped nation, India is now considered a Developing economy. A developing economy is not simply a brand-new term for an underdeveloped economy that is more reputable. Instead, it's an acknowledgement of the fact that a poor, backward nation is making deliberate and conscious efforts to get out of poverty and stagnation and get on the path to prosperity and economic progress. As a result, a developing economy combines characteristics of an underdeveloped, stagnant economy with those of a steadily expanding economy. An underdeveloped economy on the way to prosperity and development is essentially a developing economy. It is an economy which has shed off a portion of its backwardness and gaining discernible headway in numerous financial circles. As a result, an economy that is developing has many parts that are moving quickly but many activities that are still stuck and behind. India's underdeveloped economy is characterized by:

1. Lower per capita income - When compared to the developed nations of the world, India's per capita income is extremely low. India's per capita income is approximately 70 times lower than Switzerland's, 35 times lower than the United States, and 30 times lower than that of the United Kingdom and Germany.

2. Low standard of living - People in underdeveloped countries have extremely low standard of living as a result of their low income. India's daily calorie requirement per person is only 2104, compared to 3666 in the United States, 3447 in Canada, and 3547 in Switzerland.

3. Technological obsoleteness - The majority of Underdeveloped economics' production methods are out of date or no longer relevant. In India, farming is mostly done using methods that have been around for centuries. Industrial modernization is also extremely limited; The majority of industries still use methods that were long abandoned in the West. The transportation industry still needs to be improved.

4. Lower levels of productivity - Between developed and developing nations, the level of productivity in various fields varies significantly. The average level of productivity in Indian agriculture is approximately one fourth that of the United States and Canada.

5. More reliability on agriculture - Between developed and developing nations, the level of productivity in various fields varies significantly. The average level of productivity in Indian agriculture is approximately one fourth that of the United States and Canada.

6. Proliferation of population - In most underdeveloped nations, population growth is extremely rapid. As the population grows, more and more provisions must be made for food, lodging, medical care, education, and other necessities. In order to maintain even the same standard of living, this necessitates a faster rate of economic development.

7. Presence of unemployment - Despite significant efforts to increase the number of job opportunities throughout the five-year plans, unemployment has increased in India. Unemployment is present to a significant degree in the economy's agricultural sector. All of these people share in the nation's earnings without contributing anything to production. This, they are a channel upon the nation's assets and a block in the method of its turn of events.

8. Deprived human capital quality - The low quality of the average human being is yet another characteristic of Underdeveloped nations. The cost of social services, medical care, and education - all have a significant impact on labor quality. Sadly, many people in India are still illiterate and ignorant. The literacy rate had increased from just 32% in 1951 to 74% as of the census of 20121. Even though this is a significant accomplishment, more than a quarter of the country's population is still illiterate, and they require education to enhance their abilities and efficiency.

9. Dualistic Economy - India and other developing economies are dualistic in their disposition. The traditional and modern parts of the economy coexist alongside one another, each with its own distinct identity. While many parts of India's economy are well-organized, others are still chaotic and behind. India is a developing nation, as evidenced by the aforementioned characteristics. Similar characteristics can also be found in the world's other underdeveloped nations.

As a result, the government's contribution to India's economic growth has been essentially paternal and pioneering. In addition to directly contributing to the economy's faster growth, it has assisted and guided the private sector in becoming an effective development agent. with the recent adjustments to the economic policies of the government, which include a much greater degree of privatization, computation, and liberalization. Although the government would not reduce its role in assisting and directing the private sector, the private sector is receiving more responsibility for the country's development. Even now, the government has taken on the crucial responsibility of developing and providing services for social and economic infrastructure. The private sector will not be able to fully participate in the process of development. Therefore, the government would serve as a guide and a facilitator of development by providing adequate essential development infrastructure services, even though the private sector has been asked to play a larger role in directly productive activities.

Questions ? Contact Us