India’s Development Project

Mrigaanka Chahar
 Growth vs. development measures in the country

- India’s nominal gross domestic product (GDP) at current prices is estimated to be at Rs. 301.75 trillion
(US$ 3.62 trillion) in 2023-24. Additionally, the Nominal GDP at current prices in Q1 of 2023-24 was
Rs. 70.67 trillion (US$ 848.92 billion), as against Rs. 65.42 trillion (US$ 785.85 billion) in 2022-23,
estimating a growth of 8%.
- HDI value (2021): 0.633, INDIA'S HDI RANK: 132
- India ranks 126th in World Happiness Index 2023 amidst
rising mental health concerns - The Economic Times.
 Is there a poverty trap in the country?
- Spatial poverty traps in India may include dryland regions in the western-southern
states and forest-based regions in the central-eastern states.
- The urban poor, who often live in slums, are especially vulnerable to a "medical
poverty trap". This is due to a number of factors, including:
- Uncertain job security
- Low wages
- Lack of basic necessities
- Lack of fallback options
Resource endowments
Minerals: Coal, iron ore, manganese ore, lithium ore, mica, bauxite, chromite, natural gas, diamonds, and limestone

Other resources: Fertile soil, rivers and tributaries, forests, mountains, and medical tourism

Climate
India's climate mirrors its geographical diversity, with the majority of the country experiencing a tropical climate. The interior
regions display a blend of wet and dry tropical weather, while the northern parts show a humid tropical climate.

Historical background
India was rich with plenty of natural resources during ancient times. But many Muslim invaders and the English men exploited
these natural resources in due course of time. India has been colonised, and was a British colony till 1947. Considering its
independence was earned less than a century ago, India has been through various developments and has emerged as a powerful
country.
Political systems
Parliamentary Secular Democratic Republic

Degree of political stability

The average value for India during that period was -1.07 points with a minimum of -1.51 points in 2003 and a maximum of -0.57 points in 2022. The latest value from 2022 is
-0.57 points. For comparison, the world average in 2022 based on 193 countries is -0.07 points.

GDP vs. GNI vs. PPP levels

GDP: US$ 3.73 trillion

GNI: In financial year 2023, the gross national income at current prices in India was estimated to amount over 267 trillion
Indian rupees

PPP: According to Knoema, India's purchasing power parity (PPP) in 2022 was 22.9 LCU per international dollar. This is a
4.39% average annual increase from 2003, when India's PPP was 10.2 LCU per international dollar.
 Factors Affecting Development
Education and Health: 77.7 %According to the latest data (As compared to the last census (2011), the
literacy rate in India has increased by 5% in 2023 to 77.7 %.

In 2023, India's infant mortality rate was 26.619 deaths per 1,000 live births, which is a 3.89%
decrease from 2022. In 2022, the infant mortality rate was 27.695 deaths per 1,000 live births, which
is a 3.74% decrease from 2021.

In 2023, India's life expectancy was 70.42 years, which is a 0.33% increase from 2022.
 Technology
India has been using technology to transform its economy, boosting its ability to continue growing faster
than other major economies. The country’s use of technology has also had a positive impact on society and
helped to reduce emissions. Technology has also changed the way the capital markets function and the
opportunities they provide.
According to the National Association of Software and Services Companies (NASSCOM), India's
technology industry is expected to cross $245 billion in 2023 based on an 8.4 percent annual growth rate.
India’s technological growth has even led to it coming into the tertiary sector and India has also become a
centre for software development.
 Access to credit and micro-credit

Microfinance can also help the poor increase their income, become self-employed, and
improve their economic situation. Micro-credit for poverty alleviation can increase
farmers' income, stabilise the growth of their income, and have significant short-term and
long-term effects on income growth and poverty alleviation.

Today, microfinance is available in nearly 85 per cent districts of India with more than two
lakh frontline employees distributing credit and associated services.
 Empowerment to women
As the majority of India’s population, women represent a significant portion of the nation’s untapped
economic potential. As such, empowering women in India through equal opportunities would allow them
to contribute to the economy as productive citizens. With higher literacy rates and equal pay for equal
work, women are able to thrive economically and rise out of poverty.
Protecting women and girls from violence and abuse while challenging the stigmas against reporting
crimes would overall create a much safer society. Improving the female political representation rate would
enable more women to serve as role models for young girls and allow a platform to bring awareness to the

issues affecting women in India. Overall, gender equality allows

for women to live a better quality of life, allowing them to
determine their futures beyond traditional expectations

India has also implemented schemes such as Beti Bachao Beti

Padhao and Mahila Shakti Kendra to promote gender equality.
 Income distribution

The richest have cornered a huge part of the wealth created through crony capitalism and
inheritance. They are getting richer at a much faster pace while the poor are still struggling
to earn a minimum wage and access quality education and healthcare services, which
continue to suffer from chronic under-investment.
 Effectiveness and availability of law and order
The good condition of law and order is the first condition of the growth and development of a society.

· The state has a specific machinery to maintain law and order within its area.

· In India, the maintenance of law and order is a subject of States (Provinces). However, the union government
helps states in their task by providing funds, equipment, intelligence inputs, training and expert manpower.

· India is facing serious internal and external challenges since independence as far as law and order is concerned.

Till now India has no national policy to deal with terrorism,

insurgency, social and religious conflicts.

· Organised crimes in cities, smuggling, frequent gang wars,

naxal activities, cross border terrorism, infiltration, illegal
immigration from neighbouring countries, social and religious
conflicts are the prime challenges to the law and order condition of
India.
 Corruption
Corruption can affect economic development by reducing economic efficiency and growth. It can
also affect the equitable distribution of resources across the population.

Corruption can increase income inequalities and undermine the effectiveness of social welfare
programs.

In 2023, India ranked 93 out of 180

countries on the Corruption Perception
Index (CPI), with a score of 39.
 Barriers to Development
Over-specialization on a narrow range of products
According to the IMF, India's goods export sophistication is below the average of other Asian
economies and much lower than China's and Brazil's. However, the Reserve Bank of India
says that India has a comparative advantage in certain export categories.
India is the world's largest producer of milk, pulses and jute, and ranks as the second largest
producer of rice, wheat, sugarcane, groundnut, vegetables, fruit and cotton. It is also one of
the leading producers of spices, fish, poultry, livestock and plantation crops.
 Price Volatility of Primary Products
Yes, India has experienced high price volatility in agricultural commodity markets in recent years.
This volatility can be damaging to countries, especially if prices fall and demand is price inelastic.

In 2023, India's farm sector output was hit by an unprecedented weather shock, causing volatility in
food prices. The decline in output was due to an erratic monsoon and adverse impact of El Niño.
 Access international markets
Yes, India has access to international markets. As of 2022, India has free trade agreements
(FTAs) and other trade agreements with more than 50 countries and trade blocs. India's
Preferential Trade Agreements aim to promote trade with other countries by lowering
tariffs and providing access to new markets.

India's economy has become more open over the past two decades. Trade currently
represents 45.3% of the country's GDP.
Is the country adopting any of the following:

Import substitution
Yes, India adopted import substitution industrialization (ISI) as an economic policy in 1950. The policy's
goal was to encourage domestic industrialization and reduce the import of manufactured goods from
developed nations.

Export promotion
Yes, India is adopting export promotion. The Foreign Trade Policy (FTP) 2023 is based on four pillars,
including export promotion through collaboration and emerging areas like e-commerce. The FTP 2023
also aims to facilitate ease of doing business for exporters through process re-engineering and
automation.
 Trade liberalisation
As the global economy began to grow and international trade gained momentum, it led to
increased prosperity and potential for citizens worldwide. In this context, it would have
been imprudent for India to remain passive. Thus, we also embarked on the path of
economic liberalisation. Despite unsuccessful attempts in 1966 and 1980, the process of
liberalisation finally flourished in India in 1991. Liberalisation stands as a crucial aspect of
a nation’s development, something every government must prioritise.
Working with the WTO
In 2021, the WTO urged India to play a constructive role in ongoing negotiations and
reform efforts. India has taken on obligations to comply with the Trade-Related Aspects of
Intellectual Property Rights (TRIPS) Agreement, including changing its domestic law.

Bilateral and Regional PTA

Yes, India has been actively involved in bilateral and regional trade agreements. These agreements provide
preferential tariff rates for trade in goods between member countries. They also provide broader economic
cooperation in the areas of trade in services, investment, and intellectual property.
 Diversification

India has diversified its export basket and moved toward higher value-added products over the
last decade. Policymakers realized that India had to produce high-quality, cost-competitive
goods, while increasing product complexity to compete with the rest of the world.

The diversification of India’s economy has led to a more complex structure which is able to
sustain itself without the help of other countries to a large extent.
 Describe the nature of FDI in the economy
FDI is an important source of non-debt money for India's economic development. It contributes to:

Business expansion

Increased exports

Improved balance of payments

Additional tax revenues for the government

FDI was introduced in India in 1991, when the government introduced a series of reforms to the business
environment.

In 2021-2022, India received its highest-ever FDI inflow of US$83.57 billion. However, in 2022-2023,
FDI inflows dropped to US$70.97 billion due to global uncertainties.
 Does the country use foreign aid? If so, what is the history of foreign aid?
Yes, India has a history of receiving foreign aid. India's foreign aid program began in the 1950s through the Colombo
Plan. In the mid-1980s, India was the world's largest recipient of foreign aid.

India's foreign aid is used to help end poverty and improve living standards. India also provides aid to poorer
countries around the world. In 2021-2022, India's direct overseas aid was ₹18,154 crore (US$2.4 billion).

India's foreign aid program has changed over time. In 2020-2021, India was the top recipient of ODA. However,
India now receives bilateral aid from a small number of European countries, and other assistance is directed through
multilateral institutions like the World Bank.

India also announced seven years ago that it would only accept bilateral development assistance from five countries:
Germany, Japan, Russia, the UK, and the United States, in addition to the EU.
 Is the country in debt? Is the debt foreign or local?
As of September 2023, India's external debt was $635.3 billion, which is 18.61% of its GDP.
External debt is money borrowed from outside the country.
India's external debt is primarily long-term borrowing. The government's external debt policy has
helped to keep the debt within manageable limits.

As of March 31, 2023, the central government's

debt and liabilities were estimated at 155.77 lakh
crore. As of March 31, 2024, the central
government's debt and liabilities were estimated
at 172.50 lakh crore.
 Market Based Policies
Liberalisation
This policy relaxes regulations and restrictions on free trade, allowing foreign investments and MNCs
to enter the country. Some reforms include reducing import tariffs, deregulating markets, and lowering
taxes.
Pradhan Mantri Fasal Bima Yojana
This crop insurance scheme was launched in 2016 to provide financial support to farmers whose crops
fail due to natural disasters, pests, or diseases.
 Interventionist Based
Privatisation
This policy opened up industries previously reserved for the public sector to the private
sector. It also increased competition and reduced government monopolies.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
This social security measure guarantees 100 days of wage employment to every household
in rural areas of India.
 Targeting Area of Development Project
Madhya Pradesh and Assam

Targeting Areas:

● Highest infant mortality and Highest maternal mortality rate

Funds Request:

● $1 billion = 83,05,83,50,000 INR

 Plan of Action
● Aiding the healthcare poverty trap that is present in Assam and Madhya Pradesh
● Plan to set up two world class hospitals: one in Assam and one in Madhya Pradesh
● These hospitals can be set up using government facilities however can have
collaborations with top doctors from hospitals such as Max and Fortis.
● This one time investment will set the base for the hospital but government will ensure
its long term sustenance.
 Reasons of Importance
● On the regional level, Assam continues to have the highest MMR (195) and second
highest is Madhya Pradesh (173).
● According to the 2020 SRS, Madhya Pradesh has an infant mortality rate (IMR) of 48
per 1,000 live births. This makes it the state with the highest IMR in India.
● It is reported that 71.3% of the total disease burden in the Assam is due to premature
deaths and 28.7% due to disability or morbidity. CVDs like Ischaemic heart diseases,
Intracerebral hemorrhage and COPD are the major causes of DALYs
(disability-adjusted life year) in the State.
● According to a study done by Enser, Cooper, Davidson et al, “recessions do have a
negative association with maternal and infant outcomes particularly in earlier stages
of a country's development although the effects vary widely across different systems”