Indian Economy

Characteristic of Indian Economy

The characteristic of Indian economy are :

Under-developed Economy

Mixed Economy

Federal Economy

Under-developed Economy

The Planning Commission in the first Five-Year Plan defined an Under-developed economy as one which is characterised by the coexistence in greater or lesser degree of Un utilised or under utilised manpower on the one hand, and of unexploited natural resources on the other.

Causes of India's Under-development

Low Per Capita Income

India's per capita net income (factor cost at current prise) was Rs.40141 in year 2008-09 which increased to Rs.43749 in year 2009-10.

Low Rate of Capital Formation

In India ,invest is 20 per cent to 25 per cent of the national income whereas in the case of the USA ,Canada and West Europe it is 25 per cent to 30 per cent.

Shortage of Savings

In India savings are 20 per cent to 25 per cent .These are too low in the context of requirement of development.

Excessive Dependence on Agriculture

In India about 75 per cent of the people depend on Agriculture.

Over-Population

According to 2001 Census ,India's population is about 1,027 million and is increasing at the rate of 2.14 per cent per year.

Industrial Backwardness

Industrial development in India has been very slow and uneven.Hardly 10 per cent of her total population is engaged in industry.

Under-utilisation of Natural Resources

India is under developed because her natural resources like water resources,forest resources and mineral resources are largely unexploited and under-utilised or under-exploited.

Unemployment and Under-employment

India has a large and growing volume of Unemployment in urban areas and "disguised unemployment" in rural areas.

Too many persons are employment in agriculture whose marginal productivity is zero.

Mixed Economy

India has a mixed economy because the existence of privet and public sector industries makes our economy mixed.

Federal Economy

As India has a federal form of government ,its financial system is federal.

Economic Planning in India

Objectives of Planning in India are :

Securing and increasing in National income

Achieving a planned rate of investment within a given period to bring the actual investment as a proportion of National Income to a higher level

Reducing inequality in the distribution of income and wealth

Adopting measures to increase agricultural production,manufacturing capacity of producers and a favourable balance of payments.

Planning Commission

Composition

It was set up in 1950

It consists of a Chairman a Deputy Chairman and other members.

It is a non-statutory body.Its main functions are :

Assessment of material ,capital and human resources of the country.

Formulation of Plans for the most effective and balanced Utilisation of the country's resources.

Definition of stages in which the plan should be carried out.

Determination of the nature of machinery for the implementation of the plan in all its aspects.

Appraisal from time to time of the progress achieved in the execution of each stage of the plan.

Public cooperation in the national development

Perspective Planning

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