Economic Development Of India: Analysis And Statistics

Research and gather credible statistics that characterise the evolution and level of economic development of the chosen LIC’s in terms of the aspects of development selected

Concise organisation and presentation of data (graphs, tables and diagrams)

Structure of the report that is reasonable and well-articulated

Capacity to apply economic principles in the analysis of the chosen LIC’s evolution and level of development

Energy resources and economic development in India.

Population growth and economic development.

Concept of Economic Development

The global scenario has experienced considerable dynamics over the last decades, owing to the changes in different domains including political, social, economic, demographic and others. Different countries have emerged in different periods of time as emerging economies across the international framework, showing impressive traits in the social, economic, political and other aspects. Of this, the economic aspects of a country hold immense importance and a lot of the welfare of the country as a whole and its population depends on the economic prosperity and economic development of the country (Arena 2016).

In this context, although economic growth and economic development are often used for indicating towards the same phenomenon of economic prosperity of a country, these two terms however have different meanings and implications on the economy and on the country as a whole (Mankiw, 2015). While the concept of economic growth indicates towards the rise in the overall economic productivity of a country, with the increase in the value of the goods and services produced in the country, which is mainly observed with the help of the growth dynamics in the Gross Domestic Product of the concerned country, the concept of economic development is a much broader concept. The economic development of a country indicates towards the increase in the overall economic welfare, which in turn can be reflected in an overall improved lifestyle and standard of living of the major share of the population of the country.

Keeping this into consideration, the concerned report tries to analyse and discuss the growth of the economy of one of the most significant and emerging countries in the global scenario in the contemporary period, which is the economy of India. The country can be considered as one of the primary developing economies in the contemporary period, showing huge dynamics in all the significant growth and development indicators of the county. However, not all the dynamics are seen to be positive and some of the indicators are also seen to be showing negative dynamics over the last few decades, which are discussed and interpreted in the following section of the report.

As discussed above, the notions of economic development is a much widespread and more inclusive notion, in the general global framework, in which the not only the economic productivity and monetary increase in the welfare of the country is taken into account, but also the other aspects of the well-being of the population of the country, which apart from economic aspects, also include the social, political and social well-being of the population of the country (Coale and Hoover, 2015).

India's Economy: Overview

The concept of economic development came into existence, in the post war period of 1950s, when it was observed that in many countries, in spite of robust economic growth and increase in the productivity as well as GDP, the welfare of major share of the population of the country cannot be seen to be increasing, especially in the aspects of education, health, morbidity, employment, economic abundance and other socio-economic indictors, which in turn led to the belief that increase in economic growth does not necessarily lead to percolation of the fruits of the economic growth to all the sections of the society, which in turn led to the acceptance of economic development as a better indicator of welfare of the population of the concerned countries(Mankiw 2014) 

To measure the economic development of the countries, over the years, many indices have been developed of which the Human Development Index is one of the most significant, comprehensive and widely used measurement for capturing the overall economic developmental conditions of a country, in which the abstract concept of development is quantified on the basis of the following components of a well-developed and effective lifespan:

1. a) Long and healthy life- This is taken into account in the concerned index by calculating the life expectancy of the population of a country at birth.
2. b) Knowledge- The presence and increase in knowledge in the population of the country is calculated by considering the indicators of the enrolment in the schools and the adult literacy in the country.
3. c) Decent living standard- For well-being of the population, economic abundance in each of their hands is also required. To measure the level of economic abundance and the level of living of the population of the concerned country, the per-capita Gross National Product is taken into consideration (Taussig 2013).

However, apart from the HDI and economic growth, there are many aspects of overall economic development in a country, which include the level of equality in distribution, level of poverty and other aspects, which are also required to be taken into account to get a wholesome view of the overall performance of the economy of a country over the years.

The mixed economy of India is one of the primary developing economies in the contemporary global scenario, ranking sixth globally in terms of Nominal GDP in the international framework and showing considerably impressive performance in the economic growth perspectives (measured with the help of GDP and its growth dynamics) over the years (Laibson and List 2015). Much of this can be attributed to the international phenomenon like Globalization as well as the trade liberalisation of the country in 1991, post which the industrial and commercial sector of the previously agriculture-based economy have grown impressively. The country, in the contemporary period, has a flourishing service sector, a significant manufacturing sector, robust trade relations across all the major economies of the globe and economic growth rates higher than many developed economies across the globe (Rios,  McConnell and Brue 2013).

The primary indicator of economic growth of a country, as can be seen from the above discussion, is that of the Gross Domestic Product of the country. Keeping this into account, the GDP dynamics of India for the last few decades can be seen to be as follows:

Statistics on India's Economic Development

India’s GDP (1980-2017)

As is evident from the above figure, the GDP of the country has increased over the last few decades, with the magnitude of increase rising considerably 1995, which in turn indicates towards the point that the economy of the country is growing in terms of overall productivity (Tyner 2012). The dynamics in the growth can be observed more effectively with the help of the growth rate of the GDP of the country, which can be seen as follows:

GDP Annual Growth Rate of India (1980-2017)

The growth rate of GDP, in spite of all the positive as well as negative implications, can be seen to be showing a roughly positive trend, which explains the economic growth of the country.

Percentage GDP Growth of India, China and World

From the above figure, it can be seen that the percentage GDP growth of India is impressively higher than that of the Global GDP and can also be seen to be surpassing that of China in the contemporary period, which in turn, implies that the economy of the country has been growing impressively over the last few decades.

The above statistics shown above, however, cannot considerably highlight the overall economic development scenarios of the country, as there are many other factors present in the economy, which influence the overall development of the same.

The index of GDP and its growth shows the overall economic productivity increase in the country and does not however take into account the distribution of the same to the population of the concerned country, for which the per-capita income of the residents of the country needs to be considered (Mankiw 2014). Keeping this into consideration, the per-capita income of the population of India, over the years. can be seen to be as follows:

Per-Capita GNI of India over the last few decades

The per-capita Gross National Income, which is an indicator of the income of the population of the country in general, can be seen to be developing steadily for the concerned country, over the last few decades, which in turn indicates towards the increasing economic welfare of the country in the broad framework. This increase in the per-head income in the concerned country can be due to the fall in the rate of growth of population in the country in the recent years, which can be seen from the following figure:

Growth rate of population in India over the years

Per-capita Income

The considerably falling population growth in the country, as can be seen from the above figure, can be considered to be a contributing factor towards the increase in the economic wellbeing of the population of the country and is also an indication regarding the positive developments of the country (Heijdra 2017).

Although it has not been possible to have quantitative measurement of development of human, the UNDP (United Nations Development program) has developed composite index HDI ( Human Development Index). The HDI, as discussed above, being one of the primary indicators of the overall economic development of India, can be seen as follows:

Human Development Index of India over the last few decades

As is evident from the above figure, the HDI of the country has been rising from 1990, with the rates of increase being higher in the initial periods than that of the recent periods (Palazzi, and Lauri 2013). The three major components of HDI includes-

• Longevity- This component provides a measurement about how many years a person can live in the nation. However, it is the choice of living healthy life or long life (Heijdra 2017).
• Standard of living- It indicates GNI (Gross nation income) per capita which means how much of total income an individual is earning on an average in the nation.
• Knowledge or Education- It is the choice of acquiring literacy, information and education. It is estimated as the percentage of literate to the total population.

In the present years, few other factors have also been considered in estimating HDI, inequality adjustment, gender development. In India, there has been three indicators that estimates HDI. Among these, a set of composite indices mainly presents human development state for the community as whole. Several other indicators have also added to these indicators including- infant mortality, life expectancy at birth and so on.

India has been considered as the second most unequal nation across the globe as recorded in the year 2016 (Arena 2016) The inequality in income distribution in India has occurred due to various reasons, which involves-

Unemployment- This is one of the major factor that causes low income level of the Indian residents. Apart from this, underemployment also causes inequality in this nation. In fact, low productivity of labor also causes poverty as well as inequality among the people.

Tax Evasion-The rate of personal income tax is high in India. High rate of tax motivates evasion and hence leads to parallel economy. This in turn leads to inequality in come of people (Heijdra 2017).

Inflation- This is another cause of inequality in India as some profit earners have gained and few loses during the inflation. As the money income enhances and real income declines, the standard of living of the Indians automatically decreases.

Regressive Tax- The indirect taxes provides maximum revenue to Indian government. Since they are regressive in nature, it creates inequality in this nation.

Poverty in India

In the present years, it has been estimated that near about 28.5% of the population in India lives below the line of poverty (Arena 2016). In India, household expenditure has been considered to estimate poverty count. Mainly the tribal people and the labor class are considered as poor in India. In the recent years, this nation has been estimated as the highest share of poor across the globe. High growth of population and increasing prices of products are  one of the causes of poverty in India.

References

Arena, R., 2016. The economics of Alfred Marshall: revisiting Marshall's legacy. Springer.

Coale, A.J. and Hoover, E.M., 2015. Population growth and economic development. Princeton University Press.

Heijdra, B.J., 2017. Foundations of modern macroeconomics. Oxford university press.

Laibson, D. and List, J.A., 2015. Principles of (behavioral) economics. American Economic Review, 105(5), pp.385-90.

Libby, J.D., 2017. Principles of Macroeconomics.

Mankiw, N.G., 2015. Ten principles of economics. Principles of Economics, pp.3-18.

Mankiw, N.G., 2014. Principles of macroeconomics. Cengage Learning.

Mankiw, N.G., 2014. Essentials of economics. Cengage learning.

Palazzi, P. and Lauri, A., 2013. The human development index: Suggested corrections. PSL Quarterly Review, 51(205).

Rios, M.C., McConnell, C.R. and Brue, S.L., 2013. Economics: Principles, problems, and policies. McGraw-Hill.

Taussig, F.W., 2013. Principles of economics (Vol. 2). Cosimo, Inc..

Tyner, W.E., 2012. Energy resources and economic development in India. Springer Science & Business Media.