Indian Economy: Strengths and Weaknesses

Indian Economy

• India aims to be a global player in the digital economy
• Learning objectives include understanding India's current economic status, natural resources, infrastructure, and the contributions of major economic thinkers.

Meaning of Growth and Development

• Economic growth is measured by National Income, specifically Gross Domestic Product (GDP).
• GDP is the total monetary value of goods and services produced in a country over a specific period (usually a year).
• Economic development goes beyond GDP, evaluating quality of life and well-being through indices like the Human Development Index (HDI), Physical Quality of Life Index (PQLI), and Gross National Happiness Index (GNHI).
• GNHI, coined by Bhutan's fourth king, aims to measure sustainable development, environmental conservation, cultural promotion, and good governance.

Features of a Developed Economy

• High national income
• High per capita income
• High standard of living
• Full employment of resources
• Dominance of industrial sector
• High level of technology
• High industrialization
• High consumption level
• High level of urbanization
• Smooth economic growth
• Social equity, gender equality, and low levels of poverty
• Political stability and good governance

Strengths of Indian Economy

• Mixed economy: Combining private and public sectors
• Strong agricultural sector: Significant employment and GDP contribution
• Growing service sector: Rapid growth in sectors like IT and BPO
• Large domestic consumption: Strong domestic market driving economic growth
• Emerging market: High potential for future growth. Large young population

Fast Growing Economy

• India is one of the fastest-growing economies, exceeding China's growth rate in 2016-17
• High GDP growth and emerging service sectors are major contributors

Large Domestic Consumption

• The rapid growth rate of the economy improves living standards and increases consumer demand.

Rapid Growth of Urban Areas

• Urbanization is an important part of economic expansion
• Infrastructure improvements like transport and communication are key elements behind this growth

Stable Macro Economy

• India's economy has maintained stability
• The 2014-15 Economic Survey predicted GDP growth of 8%+

Demographic Dividend

• India has a large young population
• This creates opportunities for employment and growth
• The young population is skilled and motivated

Inequality and Poverty

• Significant economic disparity exists in India
• Proportion of income and assets owned by the top 10% is increasing

Increasing Prices of Essential Goods

• Continuous rise in prices erodes the purchasing power of lower-income groups
• Weak infrastructure and lack of protective measures can drive down the purchasing power

Inadequate Employment Generation

• Growing youth population demands employment opportunities greater than the growth rates of new jobs
• This leads to jobless growth

Outdated Technology

• Agriculture and small-scale industries rely on outdated technology
• This limits growth and productivity

Demographic Trends in India

• Size of population, rate of growth, birth rate, death rate, and density of population

Sex Ratio

• Number of females per 1000 males is used to measure gender equality
• Kerala has the highest sex ratio among Indian states

Life Expectancy

• Indicates average lifespan, increasing with time, but remains lower compared to developed economies

Literacy Ratio

• Percentage of literates to total population is a key indicator of a country's human capital

Natural Resources

• Types of Natural Resources (renewable vs. non-renewable)
• Major Natural Resources (Land, Forests, Water, Minerals, Energy)
• Land: Large and diverse, with varied holdings for farmers
• Forest resources: Forest area in India, types of forest cover (very dense, moderately dense and open forest)
• Important Mineral Resources: Iron ore, bauxite, mica, crude oil, gold, and diamond, with locations and types.

Infrastructure

• Economic infrastructure includes Transport, Communication, Energy, Irrigation, monetary and financial institutions
• Social infrastructure includes Education, Training, Research, Health, Housing, and Civic amenities

Energy

• Non-renewable energy sources include coal and natural gas and are exhaustible;
• Renewable energy sources include solar energy, wind energy, tidal energy, and geothermal energy, and are sustainable

Social Infrastructure

• Social infrastructure improving the quality of labor force which indirectly influences economic growth
• Structures like schools, colleges, hospitals and civic amenities improve efficiency of the people

Education

• Education system in India, including 10 + 2 pattern, various institutions, and budgetary allocation of education
• Education sector has 3% budget share of the GDP, largest proportion allocated to school

Health

• Health care in India is a state responsibility
• Central Council of Health and welfare formulates policies

Contributions of Indian Economic Thinkers

• Economic ideas of Thiruvalluvar
• Salient features of Gandhian economic thought: Village republics, importance of agriculture over machinery, decentralization, and village-based economies
• Jawaharlal Nehru's views on democracy, secularism, and planning for economic development
• B. R. Ambedkar's contributions in the area of finance economics and caste system
• J. C. Kumarappa's emphasis on rural economic development, the importance of village industries, and his contribution to holistic/sustainable development thoughts

This quiz explores key factors contributing to India's emergence as a large domestic consumption market, as well as the weaknesses stemming from demand for essential goods and infrastructure issues. It also examines the distinguishing features of the Indian economy that highlight its growing global market status. Test your knowledge about the dynamics of India's economy!