The Economic Development of India

Abstract

The 4 objectives of the economic policy of India are: high growth rate; national self-reliance; full employment; and the reduction of economic inequities. The growth rate has been low compared not only with the targeted growth rates but also with the rates achieved in most other countries. The most successful aspect of the policy has been the substitution of domestic production for imports and the resulting progress toward self-reliance. The least successful aspect is the continuing growth of unemployment. In 1978 there were 16.85 million man-years for people between 15-59 years old. The modern industrial sector employs only 26.5 million workers 9.7% of the work force. The present poverty population is estimated at 309 million nearly half the total population. The number of rural poor decreased from 43% of the rural population to 42% in the early 1960s rebounded to 58% in the late 1960s and declined again to 48% by 1974. The total number of rural poor increases at the rate of about 5 million a year because of the overall growth of the population. The share of the poorest 10% of Indian households in the assets of India fell from a mere 2.5% to 2% while the top 10% accounted for 51%. In spite of massive legislation the redistribution of land has been negligible. India has managed to step up its gross investment rate from 10.8% of the gross domestic product (GDP) to 20.9%. The gross domestic saving rate was doubled from 10.4 to 21.3%.