Current Economy Of India Essays
The economy is the system of goods and money used by a given society. Growth means getting bigger. Development means becoming more advanced or complex.
Economic growth and development can mean an economy that becomes advanced, larger, diverse, profitable, and expand into new regions/horizons.
Economic Growth and Development in India: When the Britishers left, our country was economically backward. The self-sufficient village economy based on cottage industries and old handicraft items were losing demand because of the introduction of industrial products.
With the decline of cottage and handicraft industries, the traditional economic base of Indian society was in bad shape. On the other hand, there was insufficiency in the field of industrial society as well. As a result majority, population in our country remained undeveloped and poverty-stricken.
At the time of Independence, the economy of our country was poor. The Indian Government had to plan for balanced economic growth and development of a huge country. The removal of poverty, illiteracy and industrial and technological underdevelopment was the most important challenges before the state.
The Constitution in the chapter Directive Principles of State Policy laid down the methods for securing economic development and economic justice. The state shall direct its policy towards securing the following:
- Providing adequate means of livelihood.
- Distributing the ownership of material resources of the community for common good.
- The prevention of concentration of wealth.
- Securing equal pay for equal work for both men and women.
- Securing of all the workers reasonable wages and a decent standard of life.
- Raise the standard of living and to improve public heath.
- State shall try to promote cottage industries.
The Government of India has undertaken several initiatives aiming economic growth and development. For the industrial and technological development of the country, the Constitution provides for setting up of a Planning Commission* to frame plans and programs for the rapid economic development of the country. Community development Projects, National Extension Services were launched. A chain of scientific laboratories, agricultural Research Institutions, Technical Institutions, a gigantic public sector of economy, were created. Means of transport and communication system such as railways, airways, waterways have developed.
During the last few decades, India has made good economic progress in the field of Information Technology, Infrastructure, Agriculture, and other sectors. At present India is considered a major developing country with an average GDP growth rate of around 7 percent. In terms of nominal GDP, India is ranked seventh in the world.
During the last quarter of year 2014, India surprised the world by becoming the world’s fastest growing major economy. (Source: wikipedia)
But in spite of all this progress, it cannot be said that the problem of national integration, social issues, poverty, inflation, income disparity, etc. has been solved. Industrialization is confined to few states and cities, and a bulk of rural areas unaffected by industrialization. The society has been divided into two classes:
- A section of people who are below poverty line, and
- Another section of people who have taken the advantages of all the developments.
The extremes of poverty are a hindrance in the process of national integration. Without a balanced economic growth and development, national unity cannot be achieved.
Inflation is another factor that has affected the economic growth of our country. Inflation happens when the currency becomes less able to purchase goods due to rising prices. High inflation is usually bad for an economy. However, low or moderate level of inflation is often considered healthy for economic development.
Conclusion:Economic growth and development is essential for best utilization of resources, economic welfare, and sustainability. Economic growth ought to improve citizens’ living standards. Bigger economies grow in a sustainable way and have more global influence.
*Note: In 2014, the planning commission was dissolved. On 1st January, 2015, NITI Aayog was formed in place of Planning commission.
Edited: Edited with the help of articles written by ‘various writers’.
Category: Economy of India
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Factors for slowdown of Indian economy, suggestions for its improvement
Indian economy is described as a economy which is tenth largest in world by nominal GDP and third largest in terms of purchasing power parity. This economy was growing at a fast pace in recent past has been plagued by such a slowdown that our currency is on a freefall and it is not able to ascertain its lower limit.
Economy of a country depends on number of factors which are divided in three general categories like Primary, Secondary and tertiary. Independence-era Indian economy till 1991 was based on a mixed economy which combines the features of capitalism and socialism resulting in interventionist policies and import substituting economy. This economy has always given much emphasis on agriculture which is called as backbone of the nation as the percentage of people dependent on it is approximately 60% of the total population. But the misery is that its contribution in total GDP of the nation is less than 10%.
Looking on the various sectors that contribute to make the Indian economy like agriculture, trade, services etc. In context of Indian economy, the most important one is the trade aspect that consists of import, export and various business processes. Trade aspect alternately tells us about the industrial growth of a nation and its dependence on other nation. Recent slowdown of economy is attributed to the fact that import has exceeded the level of export that lead to heavy deficit of balance of trade.
The most important factor in the slowdown of Indian economy is the poor infrastructure, low growth in agriculture production and industrial activities. After the adoption of LPG principle in 1991 India has opened its economy for global prospects which mainly involves liberal and free market policies. This opening has brought various pros and cons with itself as earlier our economy is tightly regulated by govt. policies and principles.
Our country is rich in number of metallic and non-metallic minerals which has given a strong base for the rapid industrialization. But there are few types of natural resources which are present in scarce amount like petroleum, natural gas, gold, silver etc. global scenarios is telling that the economic fight of future times is based on these aspects.
So to fulfill the gap created by this scarcity India has to buy a heavy amount of this resource from foreign players who are also in the arena of global power fight. Also the global currency is now provided with the base of gold reserves of a country.
These factors have made the India, a nation heavily dependent on import from different countries. This heavy import always exceeds the margin created by our exports which are mainly concentrated in the field of raw material.
So to have a control on the issue of petroleum, it has to explore alternatives like LNG and other alternatives. Economic condition of a country is also decided by the physiographical, social and political condition existing in that nation. Looking from the perspective of India one can easily ascertain the upheaval condition existing due to its distorted relation with its neighbors, dangerous internal condition due to rampant corruption, narrow minded politics involving communal forces etc.
Politicians involved in making the framework for Indian economy are not ready to understand the seriousness of the situation due to their vote bank politics Still the various policies in this economy are formed on the influence of certain groups which have political ground. India – a nation with vast manpower, sufficient amount of natural resources, suitable natural location for global trade has good amount of potential which can make it a superpower.
But to achieve the top slot, it has to look at various loopholes present in its planning section as well as implementation section. But if a nation has to exist and maintain itself in the front in the run of this economic competition, he has to keep his pace with global standards.
There are certain other aspects that it can adopt to reduce its dependence on global economy as increasing its research & development share , establishing good relations with its neighbor so that it can reduce its heavy expenditure on defence sectors, planning economic- centric schemes which try to maximize the capital part along with social responsibility.
Politicians have to understand the fact that time has come when they have to realize the importance of the moment and resolve their differences on economic issue and bring out a plan that can boost the factors responsible for growth of domestic industries. These policies must be freed from the local influences and have a global outlook.
- Amit Srivastav