Indian Economy

Sustainable Development

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

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Economic Growth vs Economic Development

Economic growth refers to an increase in the real output of goods and services in the country. Economic development implies changes in income, savings and investment along with progressive changes in socio-economic structure of country (institutional and technological changes).

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Economic Development

Economic development is defined as a sustained improvement in material well being of society. Economic development is a wider concept than economic growth.

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Economic Growth

The term economic growth is defined as the process whereby the country’s real national and per capita income increases over a long period of time.

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Drawbacks or Failures of Planning

Besides the achievements, there are many unfulfilled tasks which the planning in India is yet to achieve completely.

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Achievements of Economic Planning

Economic planning in India was started in 1951. There were certain objective of economic planning which include: achieving economic growth in terms of increase in real national and per capita income, increase in the level of employment, removal of inequality in the distribution of income removal of poverty, ensuring social and economic justice, etc.

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New Economic Policy

The heavy industry strategy was implemented under the ownership and management of the public sector. The government made budgetary provisions for the public sector to create infrastructure and establish industries. The process went on for more than three decades.

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Strategy of Planning

By strategy we mean the use of correct approach or method or formula for achieving the target under planning. In the first plan period of 1951-56, no specific strategy was adopted during this time the government of India gave more emphasis to agriculture keeping in view the fact that majority of India’s population depend on agriculture and there was the immediate issue of adequate food grain supply to address food shortage.

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Need for Planning

Planning involves various steps for effective implementation and execution. Infact the number of problems facing Indian economy is very high. Each problem is complex in nature and cannot be solved in a short period.

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Objectives of Planning in India

The various objectives of economic planning in India are drawn keeping in view its socio-economic problems.

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Economic Planning in India

India adopted a system of five yearly planning to address its various socio-economic problems. The problems of Indian economy at the time of its independence include mass poverty and inequality, low productivity in agriculture and storage of food grains, lack of industrial and infrastructural development, etc.

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Meaning of Economic Planning

India is a vast country with multiple problems faced by its population. The British ruled the country for nearly two centuries and exploited its resources for their benefit leaving the country reeling under absolute poverty. When the British left India in 1947 there was nothing to be proud of or be happy except for the ‘freedom’.

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Growth of Industry in India

Industry or the secondary sector of the economy is another important area of economic activity. After independence, the government of India emphasized the role of industrialization in the country's economic development in the long run.

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Role of Agriculture in India

Agriculture is one of the most important sectors of Indian economy. It is the supplier of food and raw materials in the country. At the time of independence more than 70 per cent of India's population depended on agriculture to earn livelihood.

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Planned Economy

India is a planned economy. Its development process has been continuing through five year plan since the first plan period during 1951-56. The advantage of planning is very well known.

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Higher Rate of Capital Formation or Investment

At the time of independence, one of the major problem of Indian economy was deficiency in capital stock in the form of land and building, machinery and equipment, saving, etc.

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Poverty and Inequality

Another very disheartening thing about India is that it has world’s largest number of poor people. As per reports of government of India, in 2011-12 about 269.3 million people in India were poor. This was about 22 percent of India's population.

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Dependence on Agriculture

Majority of India's working population depend on agricultural activities to pursue their livelihood. In 2011, about 58 percent of India's working population was engaged in agriculture. In spite of this, the contribution of agriculture to India’s gross domestic product is a little over 17 percent.

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Heavy population pressure

India is world's second largest populated country after China. As per 2011 census India's population stands at more than 121 crores. It increased at a rate of 1.03 percent during 1990-2001.

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Low per capita income

India is known in the world as a country with low per capita income. Per capita income is defined as the ratio of national income over population. It gives the idea about the average earning of an Indian citizen in a year, even though this may not reflect the actual earning of each individual.

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Features of Indian Economy

Every economy in the world has its own characteristics or features by which it is known or identified. Economies are compared with each other on the basis of these features. India as a distinct nation came into existence on 15th August 1947, called the independence day of India which marked the end of British rule over India.

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