Economic Growth in India Economic Growth in India after 1947after 1947

Economic Growth Economic Growth

Economic growthEconomic growth is the increase of per capita gross is the increase of per capita gross domestic product (GDP) or other measures of domestic product (GDP) or other measures of aggregate income, typically reported as the annual aggregate income, typically reported as the annual rate of change in real GDP.rate of change in real GDP.

Economic growth is primarily driven by Economic growth is primarily driven by improvements in productivity, which improvements in productivity, which involves producing more goods and services with the involves producing more goods and services with the same inputs of labour, capital, energy and materials.same inputs of labour, capital, energy and materials.

ANNUAL GROWTH IN %ANNUAL GROWTH IN %

India: Economic Growth from 1985 to 2005(annual growth rate, in %)

-6

-1

4

9

14

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

*

GDP Agriculture Industry Services

Basic parameters of economic Basic parameters of economic growthgrowth

i.i. EDUCATIONEDUCATION

ii.ii. POVERTYPOVERTY

iii.iii. EMPLOYMENTEMPLOYMENT

iv.iv.AGRICULTUREAGRICULTURE

v.v. HEALTHHEALTH

EDUCATIONEDUCATION

Literacy rates in India have arisen Literacy rates in India have arisen dramatically from 18% in 1951 to 65% in dramatically from 18% in 1951 to 65% in 2001.2001.

Literacy among males is nearly 50% higher Literacy among males is nearly 50% higher than females, and it is about 50% higher in than females, and it is about 50% higher in urban areas as compared to the rural urban areas as compared to the rural areas. areas.

Literacy rates range from as high as 96% in Literacy rates range from as high as 96% in some districts of Kerala to below 30% in some districts of Kerala to below 30% in some parts of Madhya Pradesh.some parts of Madhya Pradesh.

LITERACY RATE IN INDIALITERACY RATE IN INDIA

POVERTYPOVERTY

Income poverty declined from 55% in the Income poverty declined from 55% in the early 1970s to 28% in 2004-05. early 1970s to 28% in 2004-05. Although there has been progress in decline, Although there has been progress in decline, still more than 300 million below poverty line.still more than 300 million below poverty line.80% of the poor are from rural areas.80% of the poor are from rural areas.Poverty concentrated in few states (Bihar, Poverty concentrated in few states (Bihar, Uttar Pradesh and Madhya Pradesh and Orissa, Uttar Pradesh and Madhya Pradesh and Orissa, Chhattisgarh and JharkhandChhattisgarh and Jharkhand))Concentrated among agricultural labourers, Concentrated among agricultural labourers, casual workers, Scheduled Castes and casual workers, Scheduled Castes and Scheduled TribesScheduled Tribes

Trends in Poverty (%): India Trends in Poverty (%): India

YearYear RuralRural UrbanUrban TotalTotal

1973-741973-74 5656 4949 5555

19831983 4646 4141 4545

1993-941993-94 3737 3232 3636

2004-102004-10 2828 2626 2828

Number of poor (in million)Number of poor (in million)

YearYear Number (million)Number (million)

1973-741973-74 321321

19831983 323323

1993-941993-94 320320

2004-102004-10 297297

EMPLOYMENTEMPLOYMENT

India’s labour force has reached 375 India’s labour force has reached 375 million approximately in 2002, and it will million approximately in 2002, and it will continue to expand over the next two continue to expand over the next two decades.decades.

The actual rate of that expansion will The actual rate of that expansion will depend on several factors including depend on several factors including population growth, growth of the working population growth, growth of the working age population, labour force participation age population, labour force participation rates, educational enrolment at higher rates, educational enrolment at higher levels and school drop-out rates.levels and school drop-out rates.

EmploymentEmployment

Sector 1961 2004-10

Agriculture 75.9 51.4

Industry 10.6 23.2

Tertiary 12.4 25.4

Total 100.0 100.0

Problems in EmploymentProblems in Employment

There are 458 million workers in India in 2004-05There are 458 million workers in India in 2004-05

Out of this 423 million workers are informal/ Out of this 423 million workers are informal/ unorganized workers (92%).unorganized workers (92%).

Growth in employment more in unorganized sector. Growth in employment more in unorganized sector.

Thus, Thus, quality of employmentquality of employment is a problem is a problem

Workers in this sector do not have social security.Workers in this sector do not have social security.

Government is trying to provide minimum social Government is trying to provide minimum social security to unorganized workerssecurity to unorganized workers

AGRICULTUREAGRICULTURE

AgricultureAgriculture is the cultivation  is the cultivation of animals, plants, fungi and other life of animals, plants, fungi and other life forms for food, fibre, and other products forms for food, fibre, and other products used to sustain life.used to sustain life.

The history of agriculture dates back The history of agriculture dates back thousands of years, and its development thousands of years, and its development has been driven and defined by greatly has been driven and defined by greatly different climates, cultures, and different climates, cultures, and technologies. technologies. 

Problems in Indian agricultureProblems in Indian agriculture

Long term factors: Steeper decline in per Long term factors: Steeper decline in per capita land availability. Shrinking of farm size capita land availability. Shrinking of farm size

Slow reduction in share of employment (still Slow reduction in share of employment (still 55%) 55%)

Main problem is Main problem is low labour productivitylow labour productivity in in agriculture. Gap between agri. and non-agri. agriculture. Gap between agri. and non-agri. is widening.is widening.

We should blame non-agriculture (industry We should blame non-agriculture (industry and services) for not absorbing workers from and services) for not absorbing workers from agriculture.agriculture.

Deficits in Agriculture GrowthDeficits in Agriculture Growth

Six deficits in agricultureSix deficits in agriculture

::(a) land and water management (a) land and water management deficitdeficit

(b) investment, credit and (b) investment, credit and Infrastructure deficit, Infrastructure deficit,

(c) research and extension (c) research and extension (technology) deficit, (technology) deficit,

(d)market deficit, (d)market deficit,

(e) institutions deficit, (e) institutions deficit,

(f) education/skill deficit(f) education/skill deficit

HEALTHHEALTH

Like population growth and economic Like population growth and economic growth, the health of a nation is a product of growth, the health of a nation is a product of many factors and forces that combine and many factors and forces that combine and interact with each other. interact with each other.

Economic growth, per capita income, Economic growth, per capita income, employment, levels of literacy and education employment, levels of literacy and education ,age of marriage, birth rates and nutrition, ,age of marriage, birth rates and nutrition, access to safe drinking water, access to access to safe drinking water, access to preventive health care and, road preventive health care and, road safety are safety are among the factors that contribute directly among the factors that contribute directly to the to the health of the nation.health of the nation.

ConclusionConclusion

There is a need to have a broad based and There is a need to have a broad based and inclusive growth to benefit all sections of society inclusive growth to benefit all sections of society and improve economic growth.and improve economic growth.We have examined issues and challenges in five We have examined issues and challenges in five elements of inclusive growth (poverty, elements of inclusive growth (poverty, employment, agriculture, health and education)employment, agriculture, health and education)If it is not inclusive it can generate very severe If it is not inclusive it can generate very severe social tensions. Thus, politically, for having a social tensions. Thus, politically, for having a stable and democratic society one needs to stable and democratic society one needs to have inclusive growth. have inclusive growth.

ConclusionConclusionThere are strong social, economic and political There are strong social, economic and political reasons for achieving broader and inclusive growth. reasons for achieving broader and inclusive growth. Socially, lack of inclusive growth leads to unrest Socially, lack of inclusive growth leads to unrest among many people. among many people. There is also an economic argument. The measures There is also an economic argument. The measures which raise equity also promote economic growth. which raise equity also promote economic growth. Lastly, the political argument is that no government Lastly, the political argument is that no government in a democracy can afford to ignore large sections of in a democracy can afford to ignore large sections of workers and non-working population. workers and non-working population.

THANK YOUTHANK YOU

Compiled byCompiled by Kaushal KumarKaushal Kumar Presented byPresented by Mithlesh KumarMithlesh Kumar Elaborated byElaborated by Naushad alamNaushad alam Md shah faiselMd shah faisel

ANY QUERY ?ANY QUERY ?