TYBCOM

Study of Indian Economy

 Chapters
 Agricultural Sector
 Industrial Sector
 Service Sector
 Infrastructural Development
 Human Development Index
 Agricultural Sector
 Characteristics of Indian Economy
 Indian economy is predominantly an
agricultural economy
 Large number of its population is engaged in
agriculture
 Low per capita income
 Small Size of land holdings
 Presence of organized and unorganized
industries
 Characteristics ….
 A large number of landless farmers and
laborers are a part of the economy
 Presence of Absolute Poverty in urban and
rural areas
 Large number of population are illiterate
 Dualistic economy: Presence of modern as well
as traditional methods of cultivation
 Lack of advance technology in all sectors
 Predominantly an agricultural economy

 The proportion of income generated from the

agricultural sector to its GDP is still
significantly high.
Year Share of Agriculture to
its GDP

1951-52 51.45
1971-72 40.47
1991-92 28.54
2001-02 22.42
2012-12 14.10
Large percentage of population engaged in agricult ure

Year Percent of
population in
agriculture
1951 80
1971 72
1991 60
2001 54
2011 50
 Low per capita income

 India is a developing country

 It is characterized by low per capita income
Countries PCI in US $ for the
year 2015-16
(approx.)
USA 55000
Germany 48000
Japan 44000
China 9000
India 1800
 Small Size of operational land holdings

 The heavy population pressure has

continuously reduced the size of operational
land holdings in India.
Year Population Size of land
in crores holdings in hec

1951 36 2.90
1971 55 2.28
1991 84 1.57
2001 102 1.23
2011 121 1.16
 Presence of organized and unorganized
industries
 Indian economy has both organized and
unorganized industries.
 The unorganized industries are those that
employ less than ten workers.
 The organized are those that employ more than
ten, and commonly we consider that they are
given all benefits and are permanent.
 According to CSO, the organized sector are
those that are registered under any one act or
law.
 Landless farmers and labourers

 The agricultural sector comprises of farmers

who owns agricultural land, farmers who
cultivate but do not posses land (landless
farmers) and those labourers who work on
other rich farmers land.
Year Landless Farmers as
Farmers in owners who
cultivate
crores
2001 10.67 NA
2011 14.43 12.00
 Absolute Poverty
 The food intake gives energy required for our
living. How much food a person requires is
measured in terms of calories. According to
calorie intake the poverty in India is:
Year Poverty in rural Poverty in
areas (percent) urban areas
1951 54.77 42.70
1971 55.27 46
1991 50.1 33.24
2001 32 21
2011 25.7 13.7
 Measures of Poverty
 Various Methodology used are:
 In terms of Calorie intake
 Relative Income Richest 5 percent and poorest
5 percent income comparison
 $ 1.90 per day per person – by UN (224 million)
 $ 2.00 per day per person- by IMF
 $ 2.50 per day per family- by World Bank
 Rupees 32 per day per person as per 2011
census measured by Dr. Suresh Tendulkar
 Eradication of poverty
 The government intents to eradicate poverty by 2022
on India's 75th year of Independence.
 Thirty three (33) central government schemes are
rolled out for the purpose. Few of them are;
1. Immunization of infants
2. Health Insurance
3. Jan Dhan Yojana-Bank account and linking
with the Addhaar number
3. Employment generation: (MNREGA)
4. Deen Dayal Upadhyaya Grameen Kaushalya
Yojana or the Skill development
 Eradication of poverty…
 5. Drinking water
 6. Sanitation
 7. Affordable medicines
 8. Rural Housing
 9. Rural roads
 10. Ujjwala Scheme (Subsidized Gas Cylinder)
 11. Old Age ension and Atal Pension Yojana
 12. Pradhan Mantri Gram Sinchai Yojana
 13. Pradhan Mantri Gram Fasal Bima Yojana
 14. Sansad Adarsh Gram yojana, etc.
 Literate Population
 Though literacy rate is rapidly increasing in
India, but we still have not reached the rate of
100 percent or near to that of developed nations
literacy rate which is above 90 percent.
 In 2014-15 the literacy rate was 69.1 percent
 The male literacy rate was 75.7 percent
 The female literacy rate 62.0 percent
 The gender gap is 13.7 percent
 Increasing Urbanization

Year Rural population Urban population

1951 298 million (83%) 62 million (17%)

1971 439 million (80%) 109 million (20%)
1991 627 million (74%) 217 million (26%)
2001 742 million (72%) 285 million (28%)
2011 833 million (69%) 377 million (31%)
 Dualistic economy
 The existence of Traditional and modern
methods of cultivation, manufacturing is
known as dualistic approach to the economy.
 The ploughing of land by ox is traditional
method whereas ploughing by tractor is
modern.
 Preserving seeds by a farmer is traditional
whereas if it is preserve on scientific basis by
companies it is said to be modern methods of
farming.
 Seeds company in India
 Andhra Pradesh State Seeds Development
Corporation Ltd.
 Kalash Seeds Pvt Ltd.
 Kaveri Seed Company Ltd.
 Krishak Bharati Cooperative Ltd (KRIBHCO)
 Krishidhan Seeds Pvt Ltd.
 Maharashtra Hybrid Seeds Company Pvt Ltd
 National Seeds Corporation Ltd.
 Nuziveedu Seeds Ltd.
 Technology in India
 The level of technology in India has increased
over the last seventy years.
 The increase in the industrial productivity is
continuous and still progressing with
structural changes in the industrial sector as
well as in the service sector.
 From primary agricultural production to the
heavy machineries and ever increasing IT
sector is a testimony of India's increasing level
of technology.
 Technology in India…
 The technology in India is one among the five
nation in the world when it is about space
mission.
 The PSLV, GSLV and even the nuclear
technology is the testimony of our scientist
efforts in achieving the latest and advanced
technology.
 The infrastructural development is using
advance technology in all means of
transportation with collaboration.
 Technology in India…
 The banking sector uses advance technology to
compete with the modern banks since 1991.
 The hotels and restaurants are connected with
the help of information technology.
 Most of the industrial production is gradually
using automatic mechanized production
process and substantial number of them are
using robotics for manufacturing.
 Social Infrastructure
 Health Indicators

Birth Rate (2009) Death Rate (2009)

Urban - 18.3 Urban - 5.9

Rural - 24.1 Rural - 8.0

 The health issues
Disease (2009) Population per lacs

Acute Respiratory 2400

Infection
Diarrhea per year 1018
HIV/AIDS 523
Malaria 133
Tuberculosis 100
Cancer 08
Diabetes 310
Asthma 405
 The health issues…
 There is a shortfall in health infrastructure, the
health sub centres, the primary health centres
are inadequate.
 The health expenditure by the government is
1.2 percent of its GDP as on 2011 as per world
development indicators (2013) data.
 The total health expenditures by central and
state government during 2014-15 was 146958
crores of rupees.
 The AYUSHMAN Bharat
 Inequality
 As per Forbes list (2010) there are 53
billionaires in India.
 The combined net worth is $335 billion which
is 1/3rd of the GDP.
 Distribution of Income given by NCAER
Categories Household Income 2010-11 2015-16
in rupees (p.a)
Deprived < 1.12 lacs 135 113
Aspirers 1.12 lacs - 2.5 lacs 71 89
Middle 2.50 lacs – 12.50 lacs 32 53
Rich > 12.50 lacs 3 7
 Black money
 The presence of black money is a fact which is
acceptable but it is unable to be removed from
our economy.
 The voluntary disclosure scheme of 1997
reveals that a total of 4,66,031 cases with a
declared income of rupees 33,000 crores was
recorded and rupees 10,500 crores of income
was collected as tax.
 The similar schemes was not successful
thereafter.
Measures to control black money
 Control the income and all property to be state
owned.
 Strict implementation of laws to control illegal
activities, such as smuggling, drug trafficking,
 Allow private property with government
control by regulations
 Amendments of outdated and irrelevant laws
is required.
 Let market forces decide on the economic front
 Lowering of tax rates- direct and indirect.
 Per Capita Consumption
 The value is in US $ per person
Year Consumption per
person in India
1961 268
1971 290
1991 388
2001 526
2011 788
2018 1189