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Let us currently list the highlights of Indian economy as follows:
(I) Low per capita pay
(ii) Heavy populace pressure
(iii) Dependence of populace on agriculture
(iv) Poverty and Inequality pay conveyance
(v) A higher degree of capital development which is a positive component
(vi) Planned economy let us examine these focuses individually.
(I) Low per capita pay:-India is referred to on the planet as a country with low for each capita pay. Per capita pay is characterized as the proportion of public pay overpopulation. It gives the thought regarding the normal acquiring of an Indian resident in a year, even though this may not mirror the real procuring of every person. India's per capita pay for the year 2012-2013 is assessed at ' 39,168. This comes to about ' 3,264 every month. In the event that we contrast India's per capita pay and different nations of the world then it tends to be seen that India is well behind a significant number of them. For instance, the per capita pay of the USA is multiple times more than that of India while China's per capita pay is multiple seasons of India.
(ii) Heavy populace pressure:-
India is the world's second-biggest populated country after China. According to the 2011 evaluation India's populace remains at more than 121 crores. It expanded at a pace of 1.03 percent during 1990-2001. The primary driver of a quick ascent in India's populace is the sharp decrease in death rate while the rate of birth has not diminished as quickly. Demise rate is characterized as the number of individuals kicked the bucket per thousand of populations while the rate of birth is characterized as the number of individuals taking birth per thousand of population. In 2010, the rate of birth was 22.1 people per 1,000 populace while the passing rate was just 7.2 people per 1,000 populace. A low passing rate isn't an issue. Indeed it is an indication of improvement. A low passing rate reflects a better general wellbeing framework. Yet, high rate of birth is an issue since it straightforwardly pushes the development of populace. After 1921, India's populace expanded quick since the rate of birth declined gradually while passing rate declined quick. From 49 of every 1921 the rate of birth declined to 22.1 in 2010 while during a similar time-frame, the demise rate declined from 49 to 7.2. Consequently, the populace development was quick in India. Hefty populace pressure has become a significant cause of stress for India. It has put trouble on the public exchequer to activate enough assets to give government-funded training, medical care, framework, and so forth
(iii) Dependence on Agriculture:-Majority of India's functioning populace rely upon farming exercises to seek after their vocation. In 2011 around 58 percent of India's working population engaged in agribusiness. Despite this, the commitment of agribusiness to India's total national output is a little more than 17%. A significant worry of horticulture in India is that its usefulness in this area is less. There are numerous purposes behind this. There is hefty populace tension ashore to support an enormous number. Because of populace tension ashore, the per capita accessibility of land region is extremely low and not practical for extricating higher yield. Two, since per capita land accessibility is less, a lion's share of individuals are compelled to become rural work working at low wages. Three, Indian agribusiness experiences absence of better innovation and water system offices. Four, generally individuals, who are not instructed or not prepared as expected, are occupied with farming. So it adds to low usefulness in horticulture.
(iv) Poverty and inequality:- Another very disheartening thing about India is that it has the world’s largest number of poor people. As per reports of the government of India, in 2011-12 about 269.3 million people in India were poor. This was about 22 percent of India's population. A person is termed poor if he/she is not able to consume the required amount of food to get a minimum calorie value of 2400 in the rural area and 2100 in the urban area. For this, the person must earn the required amount of money as well to buy the food items. The government has also estimated that the required amount of money is ` 816 in the rural area and ` 1000 in urban area per head per month. This comes to about ` 28 in the rural area and ` 33 in urban area per head per day. This is called the poverty line. This implies that 269.9 million people of India were not able to earn such little amount in 2011-12. Poverty goes with inequality in income and wealth distribution. Very few in India possess materials and wealth while the majority have control over no or very little wealth in terms of landholding, house, fixed deposits, shares of companies, savings, etc. Only the top 5 percent of households control about 38 percent of total wealth in India while the bottom 60 percent of the household has control over only 13 percent of the wealth. This indicates the concentration of economic power in very few hands. Another issue linked to poverty is the problem of unemployment. One of the most important reasons for poverty in India is that there is a lack of job opportunities for all the persons who are in the labor force of the country. The Labour force comprises adult persons who are willing to work. If an adequate number of jobs are not created every year, the problem of unemployment will grow. In India every year a large number of people are added to the labor force due to an increase in population, increase in the number of educated people, lack of expansion of the industrial and service sector at the required speed, etc. So far we discussed the negative features. There are certain positive features of the Indian economy as well. They are discussed below.
(v) Higher rate of capital formation or investment:-At the time of independence, one of the major problems of the Indian economy was a deficiency in capital stock in the form of land and building, machinery and equipment, saving, etc. In order to continue the cycle of economic activities such as production and consumption, a certain ratio of production must go towards saving and investment. However, the required ratio was never generated in the first four to five decades after independence. The simple reason being higher consumption of necessary items by the population of whom most happened to be poor and lower-middle-income class. Collective household saving was very less due to this. Consumption of durable items was also very less. But in recent years things have changed. Economists have calculated that in order to support the growing population, India requires 14 percent of its GDP to be invested. It is encouraging to note that the saving rate of India for the year 2011 stands at 31.7 percent. The ratio of gross capital formation was 36.6 percent. This is possible because people are now able to save in banks, consume durable goods and there has been large-scale investment taking place on public utilities and infrastructure.
(vi) Planned economy:- India is a planned economy. Its development process has been continuing through a five-year plan since the first plan period during 1951-56. The advantage of planning is very well known. Through planning the country sets its priorities first and provides the financial estimates to achieve the same. Accordingly, efforts are made to mobilize resources from various sources at the least cost. India has already completed eleven five-year plan periods and the twelfth plan is in progress. After every plan, a review is made analyzing the achievements and shortfalls. Accordingly, things are rectified in the next plan. Today India is a growing economy and recognized everywhere as a future economic power. The per capita income of India is growing at a higher rate than before. India is seen as a big market for various products. All these are possible due to planning in India.
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