Features of Indian Economy

Low Per Capita Income

•Under developed economy is characterized by low per
capital income.
•India’s per capital income is very low as compared to
the advanced countries.
•For example the capital income of India was 1180 dollar,
in 2009. Where as per capita income of U.S.A in 2009
was 47240 dollar.
•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.
•During period of 1960-80 developed economies grew at
a faster rate.
•But during 1990-2009 Indian economy grew at a faster
rate.
•Even then the difference in per capita income is very
significant.
Country Per Capita Income
(US$)
USA 47240
Japan 37870
UK 41520
China 3590
India 1180

Per Capita Income for Year 2009

Occupational Pattern- Primary Production
Other main feature of Indian economy is that it is
primary producing.
It means a large number of working population is
engaged in agriculture.
A/C. to World Bank, World development indicator 2010,
about 58% of Indian work force is engaged in agriculture
and its contribution to GDP is 18%.
Country Active Contribution in GDP
Population
engaged in
agriculture Agriculture Industry Service

UK 1 0.7 23.7 75.6

USA 4 1.3 21.8 76.9

Japan 5 1.4 29.3 69.3

China 47 11.3 48.6 40.1

India 58 18 28.8 53.7

Heavy Population Pressure
•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 133 cores.(May 2018)
•Population Growth Rate: 1.2%
•Death Rate: 7.4 deaths per 1000 population.
•The fast rate of growth of population necessitates a higher rate
of economic growth to maintain the same standard of living.
•Fast population growth rate necessitates the demand
for food, clothing, shelter, medicine, education and
imposes greater economic burden.
Unemployment and Underemployment
•In India labour is an abundant factor and therefore it is
very difficult to provide gainful employment to all.
•This is mainly due to deficiency of capital.
•The Indian economy does not find sufficient capital to
expand industries to an extent so that work force gets
gainful employment.
•In developed economies unemployment is cyclic and is
mainly due to lack of demand of labour.
Inequality in Distribution of Wealth/ Asset
The survey of assets & wealth of rural & urban area
conducted by RBI clearly indicates that there is a sharp
inequality in asset distribution.
Unequal distribution of assets means there is an unequal
distribution of Income in the economy.
 Asset Group Rural (%) Urban (%)
(Rs.)

Household Asset Household Asset

Less than 27 2.4 33.5 1.4

20000

20000-50000 23.8 7.5 17.2 3.9

50000-100000 20.9 14.0 16.0 8.0

100000-250000 18.8 27.3 19.0 20.8

Above 250000 9.6 48.8 14.2 65.8

100 100 100 100

Poor Quality of Human Capital
The Indian Economy suffers from mass illiteracy.
Illiteracy retards growth. A minimum level of education is
necessary to acquire skills and comprehend social problems.
Human Development Index (HDI) constructed by United Nations
Development Programme (UNDP) has become an important
indicator of human development.
HDI is a composite indicator if three parameters- Education, Health
and Income.
According to Global HDI 2018, India is ranked 130th among 187
countries.
Prevalence of Low Level of Technology
•In India one can easily find most modern technology and
the primitive technology being used side-by-side.
•Modern technology is expensive and requires desired
level of skill.
•Majority of producers use primitive technology.
•Agricultural sector suffers low productivity due to lack of
low technology.
•However, with the libralisation of economy, new
technology is being adopted by the organisation.
Low level of living of Average Indian
•The average Indian fails to secure a balanced diet in terms of
calorie intake and protein consumption.
•Minimum calorie intake for sustaining life: 2400.
•A/C. to survey conducted by WHO in 2016-
•The average calorie intake of food in India was 2000. whereas, the
average calorie intake of food in developed economies was 3400.
•About 28% of Indian population lives below poverty line therefore,
it is doubtful to take minimum calorie intake for sustaining life.
•In India cereals predominate in consumption of food.
•In developed countries fruit, fish, meat, butter, milk, etc.
predominate in food consumption.
•A/C. to World Developmental Reporting-
•46% of total child population in India suffer from
malnutrition.
•Average protein content of Indian diet is 59 grams per day
while for developed countries it is more than double.
•Per capita availability of milk in India is 100 grams.
Demographic Characteristics
Density of population:
•The density of population calculated as a ratio of the number of
persons per square kilometer of land area.
•Normally the density of population is very high in the urban and
industrial areas and it is quite low in the rural areas.
•According 2011 census the density of population in India was 382.
The density of Population was as low as 7.7 persons per square
kilometers in 1901.
World density of population:50 per sq. km.
USA density of population:35 per sq. km.
China density of population: 141 per sq. km.
•The density of population determines the magnitude of
the burden that India is being called upon to carry and to
determine the future potential of growth.
•The availability of natural resources and the use of
technology determine the density of population with
higher standard of living.
•So the density of population is an index of either
prosperity or poverty of a country.
Age composition:
The analysis of age composition of population can
determine the proportion of labor force in the total
population of the country. The population in India is divided
into five groups on the basis of age structure.
Age structure (years) % of population
0-14 28.5
15-24 18.1
25-54 40.6
55-64 7
65 & above 5.8

Age structure of India, July 2016

Literacy rate in India:
• Literacy and level of education are basic indicators of the
level of development achieved by a society.
•Higher levels of education and literacy lead to a greater
awareness and also contributes in improvement of
economic and social conditions.
•In India the level of literacy which was only 18.3 percent in
1951 gradually increased to 23 percent in 1961 and 34.5
percent 1971.
•The current literacy rate of India is 74.04%.
•Tripura is the most literate state in India,
with 94.65% literacy.
•Bihar is the least literate state in India, with a literacy of
63.82%.
Rural – Urban Composition:
•The rural urban composition of India population reflects on
the pattern of living of the country’s population.
•In India majority of the population lives in rural areas.
•However, there is growing trend for gradual shift of
population from rural to urban areas.
•The urban population increased by 41 percent during
1951.
Sex Ratio Composition:
•Sex ratio is used to describe the number of females per
1000 of males.
•Sex ratio is a valuable source for finding the population of
women in India and what is the ratio of women to that of
men in India.
Sex Ratio of India in 2011
940 females for every 1,000
Sex Ratio of India 2011
males
Total Male Population 623,700,000 (623.7 million)
Total Female Population 586,500,000 (586.5 million)
Rural Sex Ratio of India 947
Some other demographic characteristics are-
•Dependency Ratio: 51.8%
• Youth dependancy-43.6%
• Elderly dependency-8.2%
•Population Growth Rate: 1.25%
•Death Rate: 7.35 deaths/1000 population
•Infant Mortality Rate: 43.19 deaths/1000 live berths
•Life Expectancy: 67.8 years
•Health Expenditure: 3.9% of GDP
•Education Expenditure: 3.2% of GDP
•Physician’s Density: 0.65/ 1000 persons.
Socio-Economic Indicator
The socio-economic indicator includes per capita intake of calorie,
population per TV sets, GDP rate, etc.

A/C. to NSSO (National Sample Survey Office) 2012-13,

Per Capita calorie consumption in
Rural Area: 2099 cal/day
Urban Area: 2058 cal/day
While the Benchmark of per capita calorie intake set by Planning
Commission : 2400 cal/day.
Similarly,
TV set per 1000 persons in India: 72 while in
USA : 847
Japan: 707
China: 272.
The End