In this post, you will learn about the basic characteristics of Indian economy. It is an under developed economy in which Agriculture is the back bone of Indian economic. 60% of India’s population are on the below poverty line. Mineral resources are not fully utilised. We are selling iron ore by trucks and getting blades by packets. Majority of the people of India are leading a poverty line. Indian economic is affected by it. Countries which are on the part of progress and which have their potential for development are called developing economic. So India is termed as developing economy by modern views.
You need to remember that the important features of Indian Economy are as follows:
1. Low Per Capita Income: Under developed economy is characterised by low per capital income. India per capital income is very low as compared to the advanced countries. For example, the capital income of India was 460 dollar, in 2000. Whereas their capita income of U.S.A in 2000 was 83 times than India. This trend of difference of per capita income between under developed and advanced countries is gradually increasing in present times. India not only the per capita income is low but also the income is unequally distributed. This mal-distribution of income and wealth makes the problem of poverty in ore critical and acute and stands an obstacle in the process of economic progress.
2. Heavy Population Pressure: You must note that the Indian economy is facing the problem population explosion. It is clearly evident from the total population of India which was 102.67 cores in 2001 census. It is the second highest populated country China being the first. India’s population has reached 110 cores. All the under developed countries are characterised 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. The failure to sustain the living standard makes the poor and under developed countries poor and under developed.
3. Pre-dominance of Agriculture: It is important for you to note that the occupational distribution of population in India clearly reflects the backwardness of the economy. One of the basis characteristics of an under developed economy is that agriculture contributes a very large portion in the national income and a very high proportion of working population is engaged in agriculture.
4. Unemployment: There is larger unemployed and under employment is another important feature of Indian economy. In under developed countries, labour is an abundant factor. It is not possible to provide gainful employment the entire population. Lack of job opportunities disguised unemployed is created in the agriculture fields. There deficiency of capital formation.
5. Low Rate of Capital Formation: In backward economics like India, the rate of capital formation is also low. Capital formation mainly depends on the ability and willingness of the people save since the per capita income is low and there is mal-distribution of income and wealth the ability of the people to save is very low in under developed countries for which capital formation is very low.
6. Poor Technology: The lever of technology is a common factor in under developed economy. India economy also suffers from this typical feature of technological backwardness. The techniques applied in agriculture industries milling and other economic fields are primitive in nature.
7. Backward Institutional and Social Framework: The social and institutional framework in under developed countries like India is hopelessly backward, which is a strong obstacle to any change in the form of production. Moreover religious institutions such as caste system, joint family universal marriage affects the economic life of the people.
8. Underutilization of Resources: India is a poor land. So our people remain economically backwards for the lack of utilization of resources of the country.
9. Price Instability: Price instability is also a basis feature of Indian economy. In almost all the underdeveloped countries like India there is continuous price instability. Shortage of essential commodities and gap between consumption aid productions increase the price persistently. Rising trend of price creates a problem to maintain standard of living of the common people.
