Prof. ( Dr.) Y P Sharma
The economic development of India was dominated by socialist-influenced policies, state- owned sectors and red – tape and extensive regulations, collectively known as “License Regime. ” It led the country and its economy isolated from the world economy. However, the scenario started changing from the mid-1980s when India began opening up its market slowly through economic liberalization. The policy played a huge impact on the economic development of India. The Indian economic development got a boost through its economic reform in 1990s and again through its renewal in the 2000s. Since then the face of economic development of India has changed completely.
The economic reforms played a pivotal role in the economic development of India. Reaping its benefit , the growth of the country reached around 7.5% in the late 2000s. It is also expected to double the average income within a decade. According to analysts , if India can push more fundamental market reforms , it will be able to sustain the rate and can even achieve the Government’s target of 10% to 15%.
India is world’s 12th largest economy and also the 4th largest in terms of purchasing power parity adjusted exchange rates (PPP). It is the 128th largest in the world on per capita basis and 118th by PPP. However, States have a major role to play in the economic development of India. There are a few states which have higher annualized 1999-2008 growth rates comparing to others. The growth rates for the states like Gujarat ( 8.8% ), Haryana (8.7% ) and Delhi (7.4% ) are considerably higher than other states like Bihar (5.1%), U P (4.4% ) and Madhya Pradesh (3.5%).
Agriculture along with other allied sectors like fishing , forestry, and logging play a major role in the economic development in India. In 2005 these sectors accounted for almost 18.6% of the GDP. India holds second position worldwide in terms of farm output. It also generated work for 60% of the total workforce. India has done considerably well in agriculture and allied sectors. The country is the world’s largest producer of tea , coconut , cashew nuts , black pepper, turmeric , ginger and milk. India has also the largest cattle population in the world. India is world’s second largest producer of sugar , rice , wheat and inland fish. It is in the third position in the list of tobacco producers in the world. India also produces 10% of the overall fruit production in the world, holding its first position in banana and sapota production.
India occupies 14th position in the world in industrial output. The manufacturing sector along with gas , electricity , quarrying and mining account for 27.5% of the country’s GDP. It also employs 17% of the total workforce. The economic reforms also brought a number of foreign companies to the Indian market. As a result it saw the privatization of several public sector industries. Expansion in the production of FMCG( Fast-moving consumer goods ) started taking place. Indian companies started facing foreign competitors , including the cheap Chinese imports.
In the services output , India occupies 15th spot in the world. Around 23% of the total workforce in India works in service industry. This is also the sector which provides quick growth with a growth rate of 7.5% during 1991-2000 from 4.5% in 1951-1980. With a substantial growth in I T sector , a number of foreign consumers are showing interest in India’s service exports as India has got low cost , educated , highly skilled workers in abundance. Besides this , ITES -BPO sector has also become a big source of employment for a number of youth.
Banking and Finance— since liberalization, India has seen substantial banking reforms. on the one hand , one could see the mergers of the banks , competitiveness and reduced Government interference , on the other one can also see the presence of several private and foreign players in the banking and insurance sectors. Currently the banking sector in India has got maturity in terms of supply , reach-even and product range. The Indian banks are also said to have clean, transparent and strong balance sheets comparing to their Asian counterparts.
But inspite of all aforesaid efforts India still continues to be an underdeveloped nation. The Major reasons being the development projects in India are nowhere near completion — indeed it has barely begun. It is still a poor country : per capita income remains below U S 2000 dollars and British 1206 pounds at actual exchange rates and there is still widespread destitution. Development is supposed to involve job creation with more workers in formal employment in large units , but that has not happened.
Manufacturing still counts for less than one-fifth of both output and employment. More than half of all workers anguish low productivity agriculture , while another or so are in low grade services. About 95% of all workers are in informal employment and roughly half are self-employed. What’s more the recognized and paid participation of women in working life has actually been declining in a period of rapid income growth.
The basic failure helps to explain several other failures of development project so far : the widespread hunger and very poor nutrition indicators ; inadequate provision of basic needs like housing , electricity, and other essential infrastructure , the poor health facilities and slow expansion of education. Growing inequalities do mean that a rising middle class is emerging , but this should not blind us to the lack of fulfillment of basic social and economic rights for a considerable portion of the population.
(The author is Head of the Dept. of Commerce Govt. Post Graduate College Rajouri , J&K)
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