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Features Of An Undeveloped Economy


Agriculture is the main occupation of the people. Nearly 60 to 80 percent of the population is engaged in agriculture and its related activities. Poverty is widespread. Population grows at a high rate (about 2 per cent per annum). The standard of living of people is generally low and productivity of labour is also considerably low. The production techniques are backward. Investment in research and development is quite low. The incidence of unemployment and underdevelopment is quite high. Income inequalities are widespread.

India’s Case

Agriculture is the main occupation of the people in India. At the time of independence, nearly 76 percent of the population was dependent on agriculture. At present, nearly 56 percent population is dependent on agriculture. There has been an increase in the absolute number of people engaged in agricultural activities in India.


National Sample Survey Organization (NSSO) (2004 – 05) found that nearly 22 percent of the population is below poverty. It was 36 percent in 1993–94 and 26 percent in 1999–2000. Population has grown at a fast rate of more than 2 percent. The dependency rate i.e. percentage of people in non-working age group is nearly 40 percent in India as compared to developed countries where it is about 33%.

India’s per capital income was $1180 in 2009. 
The tenth plan aimed to create approximately 50 mn employment opportunities during the plan period. The result of 61ST NSSO round show that about 47 million person were provided jobs during 2000-05.Thus we find that there are a large number of unemployed people in India.

The level of human well-being is also quite low. Human Development Index (HDI) constructed by the United National Development Programme (UNDP) is used. The HDI is a composite of three basic indicators of human development– longevity, knowledge and standard of living. The HDI is a simple average of the above indices. The UNDP finds this index for all countries and ranks them. According to the latest UNDP report, 2010, India’s relative global ranking on this index has remained at a low of 119 among 169 countries. Its HDI was .519 in 2000.

In order to measure the inequality of income and wealth, generally Gini index is used. A Gini Index of zero represents perfect equality while an index of one represents perfect inequality. The Gini coefficient lies between 0 and 1. According to the Human Development Report 2010, the Gini index for India for period 2000-10 was .368 . The corresponding figure was 0.297 in 1994. Thus, over this period, the inequalities of income and wealth have increased. India’s Gini index was more favorable than those of countries like South Africa(.578).Brazil(.55), China (.415) and even USA(.408).

Rise In National Income

India’s national income i.e. Net National Product (NNP) at factor cost was Rs. 2,04,924 crore in 1950–51 which rose to Rs. 39,46,540 crore in 2009–10. Thus, over a period of 6 decades, the NNP has increased by 18 times. On an average, the NNP has increased at a rate of a little less than 5 percent per annum. During the last 3 decades, NNP rose at a rate of more than 5.5 percent per annum as against 3.5 percent per annum during the first three decades of planning. Thus, we see that India is growing although at a not-so-high rate of growth. Per capita income in India was Rs. 5708 in 1950–51. It rose to Rs. 33731 in 2009–10 - increased by more than 5 times. On an average, the per capita income has increased at a rate of around 2 .2 percent per annum.


The occupation structure is changing. There is shift of labour force from primary sector to secondary and tertiary sector.


1950 – 51












It shows development.

Share in G.D.P:

Primary – 17, Secondary – 25.8, Tertiary – 57.2

Other things

Railway 2nd largest in world.

Roads 2nd largest in world.

Energy Installed

Capacity Increased




2300 mw

18800 mw

Irrigation facility improved

1951 – 51

 2007 – 08

22.6 mn Hect.

87.2 mn Hect.


Medical and health

Number of Doctors Increased 



61.18 thousand

7.5 lakhs


In the field of education, during the planning period, the number of primary schools has quadrupled and higher secondary school 23 times. Now there are more than 13350 colleges and more than 400 universities. The literacy rate has increased to 68.3% in 2008-09.

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