Features of Indian Economy

Introduction

The Indian economy has the characteristics of an underdeveloped economy, a developing economy and a mixed economy.

The main features of Indian Economy as an Underdeveloped Economy are as follows:

    Low per capita income

    Inequalities in income distribution

    Predominance of agriculture

    Heavy population pressure

    Large unemployment

    Scarcity of capital

    Technological backwardness, etc.

After the completion of six decades of economic planning, India is no longer considered as a stagnant economy. Significant changes are taking place in India that indicates that the Indian economy is a developing economy. The main features of Indian economy as a developing economy are:

    Low per capita income and low standard of living

    Unequal distribution of income

    Dependence of agriculture

    Unemployment

    Low quality of human resources

    Features of international trade

In India, large public sector is functioning along with the private sector. Economic planning is present along with price mechanism. These features make India a mixed economy. Mixed economy is an economic system in which both the state and private sector directs the economy, reflecting characteristics of both market economies and planned economies. The objective of India as a mixed economy is “Growth with equitable distribution”.

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  • Q1

    What are the two types of unemployment widely prevalent in India?

    Marks:1
    Answer:

    Disguised unemployment and Open unemployment are two types of unemployment widely prevalent in India.

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  • Q2

    How was the Indian economy categorised at the dawn of independence?

    Marks:1
    Answer:

    At the dawn of independence, the Indian economy was categorised as backward, traditional and stagnant economy.

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  • Q3

    Name the three economic policies that were taken under new economic reforms of 1991.

    Marks:1
    Answer:

    The three economic policies that were taken under new economic policies are: Liberalisation, Privatisation and Globalisation.

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  • Q4

    What are the features of India as a developing economy?

    Marks:3
    Answer:

    The features of India as a developing economy are:
    1. The share of agriculture to the national income has reduced which is an indicator of developing country.
    2. Per capita income has gradually increased during the plan periods.
    3. Industry and service sector has strengthen.
    4. Economic and social infrastructure has improved.
    5. Modern technology has been increasingly adopted.

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  • Q5

    State any two features to indicate Indian economy is an underdeveloped economy .

    Marks:2
    Answer:

    The features of Indian economy are:
    1) Agriculture employs 52% of the country’s workforce while only contributing 14.2% to national income, which is reflected the underdeveloped nature of the economy.
    2) Indian economy is facing heavy population pressure along with high growth rate of population.

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