Features of Indian economy
At the time of Independence, the Indian economy was underdeveloped and stagnant. Agriculture was the backbone of the economy, but agricultural activities were carried out using obsolete technology. The industrial sector contributed little to the gross domestic product (GDP). To provide direction to the economy, the government initiated economic planning in the form of Five Year Plans in 1951. Over the years, the economy has witnessed an increase in GDP, a change in the composition of GDP, an improvement in the standard of living, and an upgrading of technology.
The essential features of the Indian economy are as follows:
1) The Indian economy is mixed, meaning that the private and public sectors coexist and participate in the production process.
2) Approximately one-third of the population lives below the poverty line, and a ‘vicious cycle of poverty’ operates in many sectors of the economy.
3) The Indian economy is in a developmental phase and has not yet reached the level of economic development seen in America and Europe.
4) The level of technology used in the production process is low in many sectors. Modern technology has only been universally adopted in some sectors of the economy.
5) It is characterized by high population density and population growth.
6) More physical and economic infrastructure is needed. Transportation (roads, railways, airlines), power (electricity, gas), and communication (telephone, Internet) have not reached all parts of the country. Even some parts of the country lack provisions for schools, colleges, hospitals, and a safe drinking water supply.
7) There is a high level of unemployment and underemployment. Additionally, there is disguised unemployment in the agricultural sector.
