Features of Indian EconomyPer Capita IncomeI came across India’s per capita income figures the other day, and it makes a very interestingread. The per capita income for India for 2010 is Rs. 54,835 which grew from Rs. 46,492 theyear before.The first thing that strikes you about this number is how low this number is – by aggregate GDPIndia stands number 9 or 10 in the world, but if you take the per capita GDP then India is a lowly138 by IMF estimates, and 109 by World Bank estimates. CIA estimates rate it at an even lower142.In fact, if you look at the state with the lowest GDP – Bihar at Rs. 20,069 or about $456 – andcompare that with other countries then it would come as low as 170 or so.Bihar is also only about a seventh of Delhi’s GDP and that reflects the disparity between thevarious states.Here is the chart which breaks down the per capita income by state for 2009 and 2010. Wherevervalues are zero, it means that there was no data for that state in that period, and I had to make itzero in order to create the chart. India Per Capita Income by State 2010
In this chart – Goa is doing well, and I think this is closer to reality than the high unemploymentshown in the unemployment survey.Apart from the low number, and disparity, the third thing that strikes me is the role of cities inthe high GDP. The tallest towers belong to cities, and to me, industrialization, building cities,and moving the workforce out of agriculture into more industries, and services seems to be theonly way to grow the GDP numbers, and generally improving the standard of living in thecountry.A look at the countries with the highest per capita GDP confirms this because there aren’t anycountries there that aren’t industrialized.I’m interested to see what the break up of the GDP for each of these states looks like also. Atpresent, I don’t know if that data is available somewhere but I’ll look for it. If you know aboutsuch a document then please do leave a link.Finally, here is the data for the above chart in a format that you should be able to copy in Exceleasily. S.No. State 2009 – 10 2010 – 11 1 Andhra Pradesh 51025 60458 2 Arunachal Pradesh 51405 0 3 Assam 27197 30413 4 Bihar 16715 20069 5 Jharkhand 27132 29786 6 Goa 132719 0 7 Gujarat 63961 0 8 Haryana 78781 92327 9 Himachal Pradesh 50365 58493 10 Jammu & Kashmir 30582 33056 11 Karnataka 52097 59763 12 Kerala 59179 0 13 Madhya Pradesh 27250 0 14 Chattisgarh 38059 44097 15 Maharashtra 74027 83471 16 Manipur 27332 29684 17 Meghalaya 43555 48383 18 Mizoram 45982 0 19 Nagaland 0 0 20 Odisha 33226 36923 21 Punjab 60746 67473 22 Rajasthan 34042 39967 23 Sikkim 68731 81159
24 Tamil Nadu 63547 72993 25 Tripura 35799 38493 26 Uttar Pradesh 23395 26051 27 Uttarakhand 59584 68292 28 West Bengal 41219 0 29 A & N islands 74340 0 30 Chandigarh 118136 128634 31 Delhi 116886 135814 32 Puducherry 88158 98719Standard of LivingWith one of the fastest growing economies in the world, clocked at a growth rate of 8.3% in2010, India is fast on its way to becoming a large and globally important consumer. TheIndian middle class, estimated to be 50 million people, by McKinsey is fast becoming usedto Western culture. If current trends continue, Indian per capita purchasing power parity willsignificantly increase from 4.7 to 6.1 percent of the world share by 2015. In 2006, 22 percentof Indians lived under the poverty line. India aims to eradicate poverty by 2020.The standard of living in India shows large disparity. For example, rural areas of India exist withvery basic (or even non-existent) medical facilities, while cities boast of world class medicalestablishments. Similarly, the very latest machinery may be used in some construction projects,but many construction workers work without mechanization in most projects.In 2010, the per capita PPP-adjusted GDP for India was US$3,608.High PovertyPoverty is widespread in India, with the nation estimated to have a third of the worlds poor.According to a 2005 World Bank estimate, 41.6% of the total Indian population falls belowthe international poverty line of US$ 1.25 a day (PPP, in nominal terms 21.6 a day in urbanareas and 14.3 in rural areas). According to a new UN Millennium Development Goals Report,as many as 320 million people in India and China are expected to come out of extreme poverty inthe next four years, while Indias poverty rate is projected to drop to 22% in 2015.  The reportalso indicates that in Southern Asia, however, only India, where the poverty rate is projected tofall from 51% in 1990 to about 22% in 2015, is on track to cut poverty in half by the 2015 targetdate.The 2011 Global Hunger Index (GHI) Report ranked India 15th, amongst leading countrieswith hunger situation. It also places India amongst the three countries where the GHI between1996 and 2011 went up from 22.9 to 23.7, while 78 out of the 81 developing countries studied,including Pakistan, Nepal, Bangladesh, Vietnam, Kenya, Nigeria, Myanmar, Uganda, Zimbabweand Malawi, succeeded in improving hunger condition.
The states are listed below in increasing order of poverty based on the Multi- dimensional Poverty Index. Population Number ofMPI (in Proportion Average Contribution to States MPI MPI poorrank millions) of poor intensity overall poverty (in millions) 2007 — India 1,164.7 0.296 55.4% 53.5% - 645.0 1 Kerala 35.0 0.065 15.9% 40.9% 0.6% 5.6 2 Goa 1.6 0.094 21.7% 43.4% 0.0% 0.4 3 Punjab 27.1 0.120 26.2% 46.0% 1.0% 7.1 Himachal 4 6.7 0.131 31.0% 42.3% 0.3% 2.1 Pradesh 5 Tamil Nadu 68.0 0.141 32.4% 43.6% 2.6% 22.0 6 Uttarakhand 9.6 0.189 40.3% 46.9% 0.5% 3.9 7 Maharashtra 108.7 0.193 40.1% 48.1% 6.0% 43.6 8 Haryana 24.1 0.199 41.6% 47.9% 1.3% 10.0 9 Gujarat 57.3 0.205 41.5% 49.2% 3.4% 23.8 Jammu And 10 12.2 0.209 43.8% 47.7% 0.7% 5.4 Kashmir Andhra 11 83.9 0.211 44.7% 47.1% 5.1% 37.5 Pradesh 12 Karnataka 58.6 0.223 46.1% 48.3% 4.2% 27.0 Eastern 13 44.2 0.303 57.6% 52.5% 4.0% 25.5 Indian States 14 West Bengal 89.5 0.317 58.3% 54.3% 8.5% 52.2 15 Orissa 40.7 0.345 64.0% 54.0% 4.3% 26.0 16 Rajasthan 65.4 0.351 64.2% 54.7% 7.0% 41.9 17 Uttar Pradesh 192.6 0.386 69.9% 55.2% 21.3% 134.7 18 Chhattisgarh 23.9 0.387 71.9% 53.9% 2.9% 17.2 Madhya 19 70.0 0.389 69.5% 56.0% 8.5% 48.6 Pradesh 20 Jharkhand 30.5 0.463 77.0% 60.2% 4.2% 23.5 21 Bihar 95.0 0.499 81.4% 61.3% 13.5% 77.3
Unequal Income DistributionIncome distribution refers to the spread of a countrys income percentage throughout itspopulation and yields a ratio between incomes of the richest in a country to the poorest. Whenincome is not proportionally distributed, it is called income inequality. While many would argueit is a very much necessary part of natural economics, as in many other countries, India’sincreasing income inequality continues to pose a significant threat. In most cases, incomeinequality plays a big role in the amount of crime a country has because "as the rich get richerand the poor get poorer" it promotes unhappiness.A great portion of Indias population is a victim of rising monetary deficits, most of which hascrossed well under the poverty threshold. While the top 10% of India’s population enjoys 31.1%of the country’s income, the lowest 10% suffers with merely 3.6%. The following data portrayshow India’s Inequality measures ratio compares to that of other countries: India 8.6 United Kingdom 13.8 United States 15.9 Sierra Leone 87.2 Austria 6.9 Slovenia 5.9Dominance of AgricultureIndia ranks second worldwide in farm output. Agriculture and allied sectors like forestry, loggingand fishing accounted for 15.7% of the GDP in 2009–10, employed 52.1% of the totalworkforce, and despite a steady decline of its share in the GDP, is still the largest economicsector and a significant piece of the overall socio-economic development of India. Yields perunit area of all crops have grown since 1950, due to the special emphasis placed on agriculture inthe five-year plans and steady improvements in irrigation, technology, application of modernagricultural practices and provision of agricultural credit and subsidies since the GreenRevolution in India. However, international comparisons reveal the average yield in India isgenerally 30% to 50% of the highest average yield in the world. Indian states Uttar Pradesh,Punjab, Haryana, Madhya Pradesh, Andhra Pradesh, Bihar, West Bengal and Maharashtra arekey agricultural contributing states of India.India receives an average annual rainfall of 1,208 millimeters (47.6 in) and a totalannual precipitation of 4000 billion cubic meters, with the total utilizable water resources,including surface and groundwater, amounting to 1123 billion cubic meters. 546,820 squarekilometers (211,130 sq mi) of the land area, or about 39% of the total cultivated area, isirrigated. Indias inland water resources including rivers, canals, ponds and lakes and marineresources comprising the east and west coasts of the Indian ocean and other gulfs and baysprovide employment to nearly six million people in the fisheries sector. In 2008, India had theworlds third largest fishing industry.
India is the largest producer in the world of milk, jute and pulses, and also has the worlds secondlargest cattle population with 175 million animals in 2008. It is the second largest producer ofrice, wheat, sugarcane, cotton and groundnuts, as well as the second largest fruit and vegetableproducer, accounting for 10.9% and 8.6% of the world fruit and vegetable productionrespectively. India is also the second largest producer and the largest consumer of silk in theworld, producing 77,000 million tons in 2005.Existence of Rich ResourcesThe total cultivable area in India is 1,269,219 km² (56.78% of total land area), which isdecreasing due to constant pressure from an ever-growing population and increased urbanization.India has a total water surface area of 314,40 km² and receives an average annual rainfall of1,100 mm. Irrigation accounts for 92% of the water utilization, and comprised 380 km² in 1974,and is expected to rise to 1,050 km² by 2025, with the balance accounted for by industrial anddomestic consumers. Indias inland water resources comprising rivers, canals, ponds and lakesand marine resources comprising the east and west coasts of the Indian ocean andother gulfs and bays provide employment to nearly 6 million people in the fisheries sector. In2008, India had the worlds third largest fishing industry.Indias major mineral resources include Coal (fourth-largest reserves in the world), Iron ore,Manganese, Mica, Bauxite, Titanium ore, Chromite, Natural gas, Diamonds, Petroleum,Limestone and Thorium (worlds largest along Keralas shores). Indias oil reserves, foundin Bombay High off the coast of Maharashtra, Gujarat, Rajasthan and in eastern Assam meet25% of the countrys demand.Rising energy demand concomitant with economic growth has created a perpetual state of energycrunch in India. India is poor in oil resources and is currently heavily dependent on coal andforeign oil imports for its energy needs. Though India is rich in Thorium, but not in Uranium,which it might get access to in light of the nuclear deal with US. India is rich in certain energyresources which promise significant future potential - clean / renewable energy resourceslike solar, wind, biofuels (jatropha, sugarcane).Unemployment and UnderemploymentUnemployment has been a major problem among young Indians. There are thousands of youngwho do not have a job and lakhs of people are not in the right kind of job (underemployed), justbecause there are no openings for jobs in which they specialize. There are lots of talented peoplewho are striving to find the right kind of jobs, but land up wasting their energy in inferior kind ofjobs. This leads in under utilization of labor (also called Underemployment).The huge population explosion in a main reason for growing unemployment andunderemployment in India. The industrial sector is growing, no doubts about it. But the
growths of industries are not in par with the growth of Indian population. So, industries are not ina position to create as much as jobs required by the society. It has brought a cut throatcompetition especially in highly desired fields. Only those people who have the qualificationexceeding the requirement of the industries are able to get into the jobs.The scarcity of jobs even has lead to the corruption in hiring the employees. In many cases, thehuman resource officials are taking the undue advantage of the situation, by demanding thebribes to offer the jobs. Candidates are helplessly bribing them, as they are desperately in need ofa job. Even the jobs being offered are not always quite secure. Government jobs are often proneto bribes.Industries and the government should work towards creating more and more jobs to killthe problem growing unemployment and underemployment. At the same time, the propercontrol has to be taken to control the explosion of population. The control of the populationcan be done only by creating the awareness amongst the public. Society itself has to take theresponsibility of controlling the excess growth of population, which has been a cause forunemployment and for many other problems.Infrastructural InadequaciesInfrastructure in India include transportation, agriculture, water management,telecommunications, industrial and commercial development, power, petroleum and natural gas,housing and other segments such as mining, disaster management services, technology-relatedinfrastructure.Important sectors in Infrastructure in India:Within the Infrastructure of India, the transportation sector is the most important, including theaviation, ports, roads, rail system and logistics. The agriculture sector comprises infrastructure-related storage facilities, construction relating to agro-processing projects and reservation andstorage of perishable goods. Among others essential sectors, real-estate development, includingindustrial parks, special economic zones, tourism and entertainment centers, educationalinstitutions and hospitals and solid waste management systems, also play significant role inIndian economy.Under the Infrastructure in India the most essential field in which there should be developmentis in the urban infrastructure. Except for a few large projects in a handful of cities, paucityof urban infrastructure projects is a standing problem. Although city mass transport systemsand airports have found place in developmental plans, essential services such as roads, drinkingwater, sewerage management, drainage, and primary health are still greatly under developed.However, with the economy growing at more than at the rate of 8 per cent, the government isaiming at an economic growth rate of 8 per cent during the Eleventh Plan (2008–12), for whichthe government is taking necessary steps to develop the Infrastructure in India.