SUBMITTED BY: -

NAME: Rohit Verma

REGISTER NO: 845264131

DATE OF SUBMISSION: 19/08/2021

PROFESSOR: Dr Sasi Kumar

INTRODUCTION: -

India officially known as Republic of India is a country in South Asia. It is the

second most populous country, the seventh largest country in the world by land
area and the most populous democracy in the world. India has become a fast-
growing major economy in the world and has become a hub for IT services. India
has substantially reduced its poverty rate at the cost of increasing income
inequality. India faces many socio-economic challenges like rising air pollution,
gender inequality and malnutrition.

India has a mixed economy where both public and private sector has equal stakes.
Until 1991, India was influenced by socialist economics and followed protectionist
policies like import substitution which aimed at replacing imports with domestic
production. By this policy the government protected the domestic industries from
foreign competition. An acute Balance of Payment crisis in 1991 forced the nation
to liberalise the economy and move towards a free market system with prominence
for both direct investment flows and foreign trade.

FEATURES OF DEVOLOPING COUNTRIES

India as a developing country follows a mixed economy. Some of the major

characteristics/features of a developing country is low per capita income, high
population growth rate, poor infrastructure, agro-based economy, dependency on
primary sector, poor infrastructure etc..
In this report we will discuss mainly about two important features of Indian
economy Agriculture and Per Capita Income and Income inequality.

1. AGRICULTURE

Agriculture is the backbone of the Indian Economy. The history of Agriculture

sector in India dates back to Indus Valley Civilization. India has the world’s
second largest amount of Agricultural land within its borders and the country is
blessed with a good agricultural environment with diverse agro-climatic regions.
The country is among the largest producers of tea, milk, cashew, jute, wheat, fruits
and vegetables. According to the economic survey of 2020-21 share of agriculture
in GDP has reached almost 20% for the first time in last 17 years. During the
Covid times the agriculture sector is the only sector which showed a positive
growth of 3.4% in 2020-21 when all other sectors showed a negative growth rate.
The latest data in 2019 shows that huge 42.6% of the total workforce of India
depends on agriculture sector.

But the agricultural sector contributes to only 18.32% of GDP according to latest
data of 2020.
Although India cannot be defined as agrarian economy in terms of GDP, but on the
socio-economic front we are still heavily dependent on agriculture. Below are
some statistics for the socio-economic reasons for dependency on agriculture: -

1. Out of the total workforce of 47.41 crores in 2011-12. 70% of the population
depend on Rural incomes and out of which more than 40% are engaged in
agriculture and allied activities.

2. 46% of available Indian land is used for Agriculture

3. India’s food security depends on production of cereal crops and also increasing
vegetables, fruits and milk to meet the demands of growing population.

Major crops produced in India

India is the largest producer of many crops in the world. Based on the seasons the
number of crops in India are divided into three types: Rabi, Kharif and Zaid.

a. Kharif Crops: -

 Sown in June-July when rains first begin (monsoon crop)

 Harvested in September-October
 Requires lot of water and hot weather to grow
 Example: Rice, Jowar, Bajra, Maize, Cotton, Jute, Sugarcane etc.

b. Rabi Crops: -

 Sown in October-November
 Harvested in April-May
 Requires warm climate for germination of seeds and maturation and
cold climate for growth.
 Example: - Wheat, Potato, Tomato, Onions etc..

c. Zaid Crops: -

 Grown between March-June between Rabi and Kharif crop seasons.

 Early maturing crops
 Example: - Cucumber, Watermelon, Pumpkin etc.
Export and Import of agriculture goods in India

Over the years India has maintained trade surplus in agricultural commodities.
Agri exports increased from 38,078 crores to 20.7 lakh crores in 2020-21. At the
same time import has also significantly increased during this period. Some of the
major exports were marine products, rice, spices, meat etc.. While some of main
imported items were vegetable oils, fruits, pulses, spices etc..

Issues pertaining to agriculture sector in India and Ashok Dalwai Report

One major issue is the low contribution of Agriculture to the national income
which is widening the disparity between the 3 sectors slowing India’s progress.
The reason behind this difference is that agriculture is a low income earning sector.
Also, productivity per person engaged in agriculture is very low.
 So to make agriculture sector grow, a productive, competitive, diversified and
sustainable agricultural sector will need to emerge at an accelerated pace. The
Ashok Dalwai committee in its report submitted in 2018 to the government
presented a roadmap for doubling farmers income by 2022. The committee
suggested the establishment of an institutional mechanism for price and demand
forecasting, and adoption of “an import-export duty structure to the advantage of
farmers", to address market risks related to prices.

The current government also brought the farm laws in the parliament in the year 2020
which intended to free the farmers from middleman and permits sale and purchase of
farm produce outside the premises of APMC mandis without any market fee, cess
or levy.

2. PER-CAPITA INCOME AND INCOME INEQUALITY

Economy of India is considered as a middle-income developing market

economy. It is the 6th largest economy by nominal GDP ( $3.05 trillion ) and
3rd largest in purchasing power parity ( $10.21 trillion ). India’s GDP per-
capita is $2,191 (2021 est.).

Few reasons for low per-capita income is: -

1. One of the reasons for low per-capita income is due to over population
and high unemployment in the country. The number of jobs is not
increasing with the rise in population.
2. The other reason is low rates of savings and capital accumulation. The
key to economic growth is accumulation of capital such as roads, bridges
etc. Capital accumulation depends on savings. In India savings are low.
3. Shortage of skill and educated workers is another reason. Since three-
fourth of population is in Rural areas, India faces huge shortage of
skilled and educated workers which leads to low productivity.
4. Agriculture sector which is the backbone of the economy employs more
than 40% of the workforce. But the income received by the farmers is
very low which affects the overall national income.
Ways to improve the Per-Capita income and GDP

1. Increasing income of farmers: -

The Indian government has historically kept price of agriculture products

low in favor of the consumers, despite lower profits of farmers. The
recently introduced Farm Laws allows farmers to sell their produce to the
highest bidder which allows them to increase their incomes.

2. Increasing government expenditure and investment in infrastructure: -

Government spending needs to increase and huge amount of money

needs to be invested in infrastructure. This creates more number of jobs,
reduces unemployment and also leads to increase in private consumption.

3. Urbanizing rural population: -

Urbanization drives economic growth. Providing better education to

farmers and moving some of them to urban areas to get job in
manufacturing and other sectors would lead to increase in agricultural
productivity by decreasing number of farmers using same amount of
land. Government can provide incentives to rural population by investing
in infrastructure and other services.

Another important issue is the rising income inequality in India. Most of

the wealth is concentrated in the hands of few individuals. This has
impacted poor citizens access to education and healthcare. Rising income
inequality increases poverty in the country and makes it difficult for poor
to climb the economic ladder.
CONCLUSION

India’s economic development was hampered due to British rule. They exploited
our resources and used it for their own purpose like wars instead of development of
our economy. Trade, agriculture, manufacturing, traditional handicrafts and textiles
were suffered to large extent during British rule. Agriculture lands were inequally
distributed. Central planning, License Raj etc. led to underdevelopment after
independence.

To increase the pace of development of the country special focus should be given
to increase employment, income and reduce disparity in income distribution.
Benefits of modern technology should be provided to agriculture sector. Freedom
for selling produces should be given to farmers so that they become free from
middleman. The agricultural sector is of vital importance and transition to market
economy with changes in productive, structural and social changes needs to be
done with respect to other sectors of the economy.

REFERENCES

Yadav, P., 2014. Agricultural Situation in India. [online] researchgate.net. Available at:

<https://www.researchgate.net/publication/319204294_Agricultural_Situation_in_India>
[Accessed 19 August 2021].

Dalwai, A., 2019. roadmap for doubling farmers income by 2022. [online] Pib.gov.in. Available
at: <https://pib.gov.in/PressNoteDetails.aspx?NoteId=150574&ModuleId=3> [Accessed 19
August 2021].
Mohanty, P., 2020. Seven reasons why India's agriculture sector needs a fresh churn. [online]
India Today. Available at: <https://www.indiatoday.in/diu/story/seven-reasons-why-india-
agriculture-sector-needs-a-fresh-churn-1750587-2020-12-17> [Accessed 19 August 2021].

Cherodian, Rowan; Thirlwall, A. P. (2013) : Regional Disparities in Per Capita Income in India:
Convergence or Divergence?, School of Economics Discussion Papers, No. 1313, University of
Kent, School of Economics, Canterbury