Why is Indian economy regarded an underdeveloped economy? State its basic characteristics

Why is Indian economy regarded an underdeveloped economy? State its basic characteristics

The Indian economy is often regarded as an underdeveloped economy due to several factors:

Get the full solved assignment PDF of MCO-04 of 2024 session now.

  1. Low per capita income: India has a relatively low per capita income compared to developed economies. Despite its large GDP, this wealth is distributed among a vast population, resulting in lower income levels for many individuals.
  2. High poverty levels: A significant portion of India’s population lives below the poverty line, lacking access to basic necessities such as food, shelter, healthcare, and education.
  3. Infrastructure challenges: India faces infrastructure deficiencies in areas such as transportation, energy, sanitation, and telecommunications. Inadequate infrastructure hinders economic growth and development.
  4. Uneven regional development: There are significant disparities in development between different regions of India. While some urban areas experience rapid growth and industrialization, rural areas and certain states lag behind in development indicators.
  5. High unemployment and underemployment: India struggles with high levels of unemployment and underemployment, particularly in the informal sector. Many people are employed in low-paying jobs with limited job security and benefits.
  6. Poor health and education outcomes: Despite improvements in recent years, India still faces challenges in healthcare and education. Access to quality healthcare and education remains limited for a large portion of the population, impacting productivity and human capital development.
  7. Dependency on agriculture: A significant portion of India’s workforce is employed in agriculture, which contributes a relatively small share to the GDP. This dependency on agriculture indicates a lack of diversification in the economy.

Basic characteristics of the Indian economy as an underdeveloped economy include:

  1. Dual economy: India has a dual economy characterized by the coexistence of traditional agricultural practices alongside modern industrial and service sectors.
  2. High population density: India has one of the highest population densities globally, putting pressure on resources and infrastructure.
  3. Low industrialization: Despite recent growth in industrial sectors, India’s industrial base remains relatively underdeveloped compared to advanced economies.
  4. Income inequality: There are significant disparities in income distribution, with a small portion of the population holding a disproportionate share of wealth.
  5. High poverty rates: A large portion of the population lives below the poverty line, facing challenges related to income, health, education, and basic living standards.
  6. Limited technological advancement: While India has made strides in technology and innovation, there are still gaps in technological infrastructure and access, particularly in rural areas.
  7. Reliance on foreign aid and investment: India relies on foreign aid, investment, and trade to support its economic development efforts, indicating a level of dependence on external support.
Scroll to Top