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Indian Economy
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Curriculum 2017 A brief introduction of the state of Indian economy on the eve of independence. Common goals of Five Year Plans. Main features, problems and policies of agriculture (institutional aspects and new agricultural strategy, etc.) Industry (industrial licensing, etc.) and foreign trade.
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Economic decisions that are to be taken by all economies:
Indian Economy Introduction: Economic decisions that are to be taken by all economies: Choice of production Choice of technology Distribution of goods & services
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Indian Economy 1950-1990 Types of Economic System: Capitalist Economy
Socialist Economy Mixed Economy Basis of Differences (Features) Ownership of resources Freedom of enterprise Motive Competition Distribution of income
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Indian Economy Economic Planning: Meaning: planned coordination and utilization of available resources in an economy to achieve certain pre specified social and economic objectives in a time bound programme. Definition: “ Economic planning means utilization of country’s resources into different development activities in accordance with national priorities”
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Planning Objectives VS Plan Objectives
Indian Economy Planning Objectives VS Plan Objectives Planning objectives refer to long term objectives to be achieved over a period of 20 years. It is also called perspective plan. Main planning objectives are: Growth Modernisation Self Reliance Equity Plan objectives refer to short term objectives to be achieved over a period of 5 years. They are sector specific
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Indian Economy Difference between Planning Objectives and Plan Objectives Planning Objectives Plan Objectives Long term objectives (20 years) Short term (5 Years) General Goals Specific Goals Common to all plans Vary from plan to plan Also called perspective plans Also called five year plans Aim at structural changes Aim at quantitative changes Relate to growth, modernisation, self reliance and equity Different in different plans
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Features of Indian Agriculture Output depends mainly on rainfall
Indian Economy Agriculture Features of Indian Agriculture Output depends mainly on rainfall Little use of machinery Production mainly for self consumption Three fourth of landholdings are of small size Huge variety of crops
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Backbone of Indian Economy Share in National income
Role of Agriculture Backbone of Indian Economy Share in National income Share in Employment Basis for Industrial Development Share in Foreign trade Importance in household consumption Significance for trade and services
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Indian Economy 1950-1990 Problems of Indian Agriculture
General Institutional Technical
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Pressure of population on land
Indian Economy General: Social Environment Pressure of population on land Land Degradation Subsistence Farming Crop losses
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Defective Tenancy Reforms Lack of credit and marketing facilities
Indian Economy Institutional: Defective Tenancy Reforms Lack of credit and marketing facilities Size of holdings
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Obsolete techniques of Production Lack of irrigation Facilities
Indian Economy Technical: Obsolete techniques of Production Lack of irrigation Facilities Cropping Pattern
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Institutional Reforms (Land reforms)
Indian Economy Measures Regarding Agrarian Reforms: Institutional Reforms (Land reforms) Technical Reforms (Green Revolution General Reforms
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Indian Economy 1950-1990 Abolition Of Intermediaries Tenancy Reforms:
Measures of Land Reforms: Abolition Of Intermediaries Tenancy Reforms: Regulation of rent Security of tenure ownership rights of tenants Reorganisation of Agriculture: Redistribution of land consolidation of land holdings cooperative farming
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Indian Economy Causes of slow progress of land reforms: Lack of political will Flaws in legislations (definition of personal cultivation) Substantial limits of personal cultivation Malafide transfers Inadequate proof of tenants Problems of voluntary surrenders Inadequacies of ceiling laws
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Indian Economy 2. Technical Reforms/ Green Revolution Features of Green Revolution: Use of package inputs Scientific rotation of crops Credit and Package Inputs provided by Government Agencies Announcing Minimum Support Prices Minor Irrigation Works
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Achievements of Green Revolution: Rise in Production & Productivity
Indian Economy Achievements of Green Revolution: Rise in Production & Productivity Rise in Income Rise in commercial farming Impact on social revolution Increase in employment
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Indian Economy Failures of Green Revolution: Restricted to limited crops and areas Partial removal of poverty Differential gains Neglect of Land Reforms Rise in unemployment Environmental Degradation Degradation of land
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Irrigation Facilities Provision of Rural Credit
Indian Economy 3. General Reforms: Irrigation Facilities Provision of Rural Credit Provision of Regulated Markets & Marketing Facilities Implementation of Support Price Policy Subsidies
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Indian Economy 1950-1990 INDUSTRY Role of Industrial Sector in India:
Meeting ever increasing demand Raising people’s income High potential for growth Key to high volume of exports Promotes regional balance Provides employment Leads to modernisation Helps to modernise agriculture
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Problems of Industrial Development in India: Sectoral Imbalances
Indian Economy Problems of Industrial Development in India: Sectoral Imbalances Regional Imbalances Industrial Sickness Inadequate Employment Generation Poor Performance of the Public Sector Underutilization of Capacity
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Industrial Policy Resolution of 1956
Indian Economy Industrial Policy Resolution of 1956 Industrial policy is the instrument through which the government regulates the industrial activity in an economy Objectives of Industrial Policy Resolution 1956: Accelerate the rate of growth and speed up industrialization Develop heavy industries Expand public sector Reduce disparities of income and wealth Build up large and cooperative sector Prevent monopolies and concentration of income and wealth
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Features of Industrial Policy Resolution 1956:
Indian Economy Features of Industrial Policy Resolution 1956: Classification of Industries Industrial Licencing Stress on role of cottage and small scale industries Reduction on regional disparities Emphasis on Industrial Peace Technical education& Training
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Indian Economy Public Sector Objectives of Public Sector: Promote rapid economic development Provide basic infrastructural facilities Balanced regional development Prevent concentration of economic power in few hands Achieve self reliance Create employment opportunities Improve foreign exchange earnings
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Indian Economy Role of Public Sector Creation of strong industrial base Development of infrastructure Development of backward areas Prevent concentration of economic power Promote equality of income and wealth distribution Provide employment Promote import substitution
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Problems of Public Sector:
Indian Economy Problems of Public Sector: Unprofitable pricing Overstaffing Underutilization of capacity Inadequate autonomy Heavy losses Burden of sick units Bureaucratic delays Pessimistic atmosphere
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Indian Economy Role of Small Scale Industries: Labour intensive Self employment Import light Export promotion Equal distribution of income Decentralization of industries Base for large scale industries Sustaining agricultural development
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Shortage of raw material Difficulty of marketing
Indian Economy Problems of SSIs Difficulty of Finance Shortage of raw material Difficulty of marketing Outdated machines and equipments Competition from large scale industries Underutilized export potential Inadequate dispersal
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Indian Economy 1950-1990 Foreign Trade Pre 1991 Trade Policy:
Import Substitution Strategy Restrictive foreign trade policy While import substitution was given a lot of importance, export promotion was not given any importance In seventies, policy of liberalization was carried forward In eighties, special programmes to promote export growth
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Indian Economy Composition of Foreign Trade Composition refers to items of imports and exports Direction of Foreign Trade Direction refers to the countries that we are importing from and exporting to
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Impact of inward looking strategy
Good Impact: Increase in Industrial Growth along with structural transformation Diversification of industrial growth Protection to small scale industries
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Impact of inward looking strategy
Bad Impact: Growth of inefficient public monopolies Lack of competition implied lack of modernization Indiscriminate use of public sector enterprises Economically unviable public enterprises – political compulsion
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Occupational Structure
Indian Economy Occupational Structure Distribution of working force into various sectors: Primary, Secondary & Tertiary Sector Economic Development & Occupational Structure As country develops there is a shift of workers from the primary sector to the secondary and tertiary sectors As country develops the no. of people engaged in the primary sector declines while that in secondary and tertiary sector rises.
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