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What are the basic

characteristics of Indian
Economy?
ArticlesharedbyEBudhia

Indian economy is an under developed economy in

whichAgricultureisthebackboneofIndianeconomic.
60%ofIndiaspopulationareonthebelowpovertyline.
Mineral resources are not fully utilized. We are selling
iron ore by trucks and getting blades by packets.
Majority of the people of India are leading a poverty
line.Indianeconomicisaffectedbyit.Countrieswhich
are on the part of progress and which have their
potential for development are called developing
economic. So India is termed as developing economic
bymodernviews.
 ImageSource:bbmprestructuring.org/wp/wpcontent/uploads/2015/01/Blr_Economy.jpg

The important features of Indian

economic:
1.Lowpercapitaincome:

Under developed economy is characterized by low per

capital income. India per capital income is very low as
compared to the advanced countries. For example the
capitalincomeofIndiawas460dollar,in2000.Where
as their capita income of U.S.A in 2000 was 83 times
thanIndia.Thistrendofdifferenceofpercapitaincome
between under developed and advanced countries is
graduallyincreasinginpresenttimes.Indianotonlythe
per capita income is low but also the income is
unequally distributed. This maldistribution of income
andwealthmakestheproblemofpovertyinorecritical
and acute and stands an obstacle in the process of
economicprogress

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2.HeavyPopulationPressure:

The Indian economy is facing the problem population

explosion.Itisclearlyevidentfromthetotalpopulation
ofIndiawhichwas102.67coresin2001census.Itisthe
secondhighestpopulatedcountryChinabeingthefirst.
Indiaspopulationhasreached110cores.Alltheunder
developedcountriesarecharacterizedbyhighbirthrate
whichstimulatesthegrowthofpopulationthefastrate
of growth of population necessitates a higher rate of
economic growth to maintain the same standard of
living.Thefailuretosustainthelivingstandardmakes
thepoorandunderdevelopedcountriespoorandunder
developed.

3.PredominanceofAgriculture:

OccupationaldistributionofpopulationinIndiaclearly
reflects the backwardness of the economy. One of the
basischaracteristicsofanunderdevelopedeconomyis
that agriculture contributes a very large portion in the
nationalincomeandaveryhighproportionofworking
populationisengagedinagriculture

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4.Unemployment:

There is larger unemployed and under employment is

anotherimportantfeatureofIndianeconomy.Inunder
developed countries labor is an abundant factor. It is
not possible to provide gainful employment the entire
population. Lack of job opportunities disguised
unemployed is created in the agriculture fields. There
deficiencyofcapitalformation.

5.LowRateofCapitalFormation:

In backward economics like India, the rate of capital

formationisalsolow.capitalformationmainlydepends
on the ability and willingness of the people save since
the per capita income is low and there is mal
distribution of income and wealth the ability of the
peopletosaveisverylowinunderdevelopedcountries
forwhichcapitalformationisverylow.

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6.PoorTechnology:

The lever of technology is a common factor in under

developed economy. India economy also suffers from
this typical feature of technological backwardness. The
techniquesappliedinagricultureindustriesmillingand
othereconomicfieldsareprimitiveinnature.

7. Back ward Institutional and social frame

work:

The social and institutional frame work in under

developed countries like India is hopelessly backward,
whichisastrongobstacletoanychangeintheformof
production. Moreover religious institutions such as
castesystem,jointfamilyuniversalmarriageaffectsthe
economiclifeofthepeople.

8.UnderutilizationofResources:

Indiaisapoorland.Soourpeopleremaineconomically
backwardsforthelackofutilizationofresourcesofthe
country.

9.Priceinstability:
Price instability is also a basis feature of Indian
economy. In almost all the underdeveloped countries
likeIndiathereiscontinuouspriceinstability.Shortage
ofessentialcommoditiesandgapbetweenconsumption
aid productions increase the price persistently. Rising
trendofpricecreatesaproblemtomaintainstandardof
livingofthecommonpeople.

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