Indian Economics part 3
The Indian Economics part 3 consist of wide chapters of class 12 RUEAL DEVELOPMENT , HUMAN CAPITAL FORMATION , COMPARATIVE DEVELOPMENT OF INDIA/ PAKISTAN/ CHINA which covers complete syllabus of class 12
Rural Development in Indian Economics part 3
Rural development means an action plan for the social and economic benefit of the rural areas.
Objectives of rural development:
1. Increasing productivity in agricultural sector.
2. creating means of livelihood in rural sector.
3. developing education and health facilities in the rural areas.
The key issues of action plan for rural development are
(i)A better system of rural credit.
(ii) A system of marketing that ensures minimum price to the farmer for produce.
(iii) Diversification of crops that reduce risks of production and make the farming commercialisation of farming.
(iv) Diversification of production activity with a view to find alternative means of sustainable living other than crop-cultivation.
(v) Promotion of organic farming with a view to make crop cultivation environmental friendly as well as a sustainable process over a long period of time.
(vi) Honest system of land reforms.
(vii) Development of human resource like health, addressing both sanitation and public health.
(viii)Development of infrastructure of the rural aera
(ix)Human capital formation by creating education , health and other facilities
(x)Development of productive resources
(xi)Poverty alleviation and making land reforms
Types of Rural Credit in Indian Economics
Rural credit means credit for the farming families. Credit is the life line of farming activity credit needs of the typical Indian farmer may broadly be classified as under
Short Term Credit It needs relates basically to the purchase of inputs like seeds fertilisers etc short term borrowings generally stretches over a period of 6 to 12 months.
Medium Term Credit Medium term loans are required for purchasing machinery constructing fences and digging wells. Such loans are generally stretch over a period of 12 months to 5 years.
Long Term Credit Long term credit is meant for the purchase of additional land. The period of such loan ranges between 5 to 20 years.
Sources of Rural Credit in Indian Economics
i)Non-institutional sources ii)Institutional sources a)Co-operative credit societies b)state Bank of India c)Regional Rural Bank d)National Bank for Agriculture and Rural Development (NABARD)
1)Non-institutional sources are money lenders, traders and commission agents, landlord, relatives and friends.
2). Institutional sources are as follow:
(i) Co-operative credit societies.
(ii) Commercial Banks
(iii) Regional Rural Banks
(iv) NABARD (National Bank for Agriculture and Rural Development.) (established in 1982)
(v) Self Help Groups (SHGs)
Most formers in India are small and marginal land holders who practice subsistence farming. They have no surplus for further production
Borrowings of a farmer can before the following purpose
Productive Borrowings These borrowings include loans to buy seeds, fertilisers and agricultural equipment and implements.
Un-productive Borrowings These borrowings include loans for social purposes such as marriage and festive occasions .
Credit in the rural sector is available from two sources
1. Non-institutional Sources of Rural Credit
The major non-institutional sources of rural credit are moneylenders, friends, relatives, landlords, shopkeepers and commission agents.
Moneylenders provided about 93.6% of total financial requirement rural areas in 1951-52 and presently it is 30%.
The short-term credit needs of the formers are met from commission agents, friends and relatives which supply roughly 50% of total rural borrowings, Non-institutional sources of credit are not encouraged by government because of the following reasons
They charge high rate of interest.
They acquire land on failure to pay interest and loan.
They manipulate accounts. Institutional Sources of Rural Credit In regard to rural credit, major change occurred after 1969, when India adopted social banking and multi agency approach to adequately meet the needs of rural credit.
Different institutions were formed to provide the rural credit.
The major institutional sources of rural credit are as follows
(i) National Bank for Agriculture and Rural Development (NABARD)
It was set up in 1982 as an apex body to coordinate the activities of all institutions involved in the rural financing system.
It has an authorised share capital of Rs. 500 crore. The RBI has contributed half of the share capital while the other half has been contributed by Government of India.
The main functions of NABARD are i)To grant long-term loans to the State Government for subscribing to the share capital of cooperative societies’)
To take the responsibility of inspecting cooperative banks, Regional Rural Banks (RRBs) and primary cooperative societies’)To promote research in agriculture and rural development.
To serve as a refinancing agency for the institutions providing finance to rural and agricultural development)To help tenant farmers and small farmers to consolidate their land holdings.
The national agricultural credit fund been transferred from RBI to NABARD to form a part of its national rural credit fund.
(ii) Self Help Groups (SHGs) Formal credit system has proven inadequate. It has also not been fully integrated into the overall rural, social and community development.
Due to the demand of some kind of collateral, vast proportion of poor rural households were automatically out of the credit networks. Self Help Groups emerged to fill this gap, created by formal credit system
Self Help Groups (SHGs) promote thrift in small proportions by a minimum contribution from each member.
By March end 2003, more than Rs. 7 lakh SHGs had reportedly been credit linked. Such credit provisions are generally referred to as micro-credit programmes.
SHGs have helped in the empowerment of women. However, borrowings from SHGs are mainly confined to consumption purposes.
(iii) Regional Rural Banks (RRBs) As a supplement to commercial banks, the regional rural banks have also been opened. These have been set up under the Regional Rural Banks Act-of 1976.
Their banking services are meant for small and marginal formers and artisans, etc. They cater exclusively to the needs of weaker section. Nearly 90% of the loan of RRBs were provided to the weaker section.
Kisan Credit Card Scheme
Kisan Credit Card scheme (KCCs) was introduced by the government in 1998-99. It facilitates access to credit from commercial banks and regional rural banks.
Under the scheme, the eligible farmers are provided with a kisan card and pass book from the relevent bank. The farmers can make withdrawls and repayments of cash within the credit limit as – specified in the Kisan Credit Card (KCC).
(iv) Commercial Banks They were inducted into the field of agricultural credit under the Banking Reforms Act, 1972.
The share of commercial banks in the supply of agricultural credit has considerably improved. It was 46.9% during the year 2006-07.
Commercial banks disburse agricultural credit for the purchase of inputs, cattle, tractors, dairy farming, installation of tube-wells, etc.
(v) Cooperative Credit Societies The cooperative credit societies are actively engaged in addressing credit needs of the farmers, besides offering a host of related services.
Notably these societies provide guidance in diverse agricultural operations with a view to raise crop productivity. Currency, cooperatives account for 16-17% of rural credit flow.
The main function of cooperative credit society is to provide timely and increased flow of credit to the farmers.
Latest Status of Agricultural Credit in Indian Economics
The following points reveal the latest status of agricultural credit)
The credit flow in this sector in 2011-12 is placed at Rs. 475000 crore
.ii)The agricultural debt waiver and debt relief scheme was announced in the union budget 2008-09.
iii)Farmers have been receiving crop loans upto a principal amount of Rs.3 lakh at an effective rate of 4% per annum
.iv)To provide adequate and timely credit support to the formers, the Kisan Credit Card (KCC) scheme was introduced in February, 1999. About 10.78 crore KCCs had been issued upto October 2011.
vi)Government is implementing a revival package for short-term rural cooperative credit structure involving financial outlay of Rs. 13596 crore.
Rural Banking : A Critical Appraisal
After the nationalisation of commercial banks in 1969, the rapid expansion of the banking system in rural areas has been witnessed. Rural banking has raised the level of rural farm and non-farm output, income and employment especially after the green revolution.
Advantages of Rural Banking in Indian Economics
Raising farm and non-farm output by providing services and credit facilities to farmers.
Generating credit for self employment schemes in rural areas.Achieving food security which is clear from the abundant buffer stocks of grains.
Limitations of Rural BankingIt is suggestible that more and more regional rural banks should be set up to need the credit need of the rural and backward areas of India Small and marginal formers receive only a very small portion of the institutional credit. Rural banking is suffering from the problems of large amount of over dues and default rate. The sources of institutional finance are inadequate to meet the requirements of agricultural credit. There exist regional inequalities in the distribution of institutional credit.
Agriculture Marketing in Indian Economics part 3
It includes all those activities or processes which help a former getting maximum price for his produce among others, these processes include grading packaging and storage.Measures Initiated by the Government to Improve Market System
i)Regulated markets)
ii)Co-operative agricultural marketing societies
iii)Provision of warehousing facilities Subsidised transport
iv)Dissemination of information
v)MSP policy
Diversification is an emerging challenge in the context of rural development. It has two aspects. Diversification of Crop Production It implies production of diverse variety of crops rather than one specialised crop.
It means a shift form single-cropping system to multi-cropping system. Diversification of Production Activity/Employment It implies a shift from crop farming to other areas of production activity employment.
Non-Farm Areas of Production Activity/Employment for the Rural Population
Animal Husbandry It is the most important area of employment in India different from crop farming. It is also called live stock farming, poultry, cattle etc.
Fisheries The fishing community in India depends almost equally on inland sources and marine sources of fishing. Inland sources include rivers, lakes, ponds and streams etc.
Horticulture Horticultural crops include fruits, vegetables and flowers besides several other. Over time, there has been a substantial increase in area under horticulture.
Cottage and Household Industry This industry has been dominated by such activities as spinning, weaving, dyeing and bleaching.
Organic Farming and Sustainable Development in Indian Economics part 3
Organic farming is a system of farming that relies upon the use of organic inputs for cultivation.
Organic inputs basically include animal manures and composts.
Benefits of organic farming are as follows
i)Discards the use of non-renewable resources
ii)Environment friendly
iii) Sustains soil fertility Healthier and tastier food
iv)In expensive technology for the small and marginal farmers
Golden Revolution
The rapid growth in the production of diverse horticultural crops such as fruits, vegetables, tuber crops and plantation crops is known as Golden Revolution.
Agriculture is the major source of livelihood in the rural sector.
Mahatma Gandhi once said that “real progress of India did not mean only the industrial growth but also the development of villages because two-third of India’s population depends on agriculture”.
One-third of rural Indians still live in poverty. This is the reason, why there is need to develop rural India.
Rural Development and Rural credit in Indian Economics
Rural development is a comprehensive term which essentially focuses on action for the development of areas that are lagging behind in the overall development of the village economy.
It is a process whereby the standard of living of rural people, especially poor people, rises continuously.
The basic objectives of rural development are Increasing the productivity of the agricultural sector, so that the income of the formers increase.
Generating alternative means of livelihood in the rural areas, so that dependency on agriculture sector is reduced.
Promoting education and health facilities in the rural areas, so that human development is also achieved.
Key Areas in Rural Development
Some of the areas which are challenging and need fresh initiatives for development in rural India are as follows
i)Development of the productive resources of each locality
ii)Development of human resources including literacy (more specifically female literacy) education and skill development
.iii)Development of human resources like health, addressing both sanitation and public health.
iv) implementation of land reforms in proper manner so the small farmers and marginal farmers get benefit
v)Infrastructure development like electricity, irrigation, credit, marketing, transport facilities including construction of village roads and feeder roads to nearby highways, facilities for agriculture research and extension and information dissemination.
vi)Special measures for alleviation of poverty and bringing about significant improvement in the living conditions of the weaker sections of the populations emphasizing access to productive employment opportunities.
The share of agriculture sector’s contribution to GDP was on a decline, the population dependent on this sector did not show any significant change.
Further, after the initiation of reforms, the growth rate of agriculture sector decelerated to 2.3% per annum during the 1990s, which was lower than the earlier yearsAchieving food security which is clear from the abundant buffer stocks of grains.
Limitations of Rural Banking
Small and marginal formers receive only a very small portion of the institutional credit.Rural banking is suffering from the problems of large amount of over dues and default rate.
The sources of institutional finance are inadequate to meet the requirements of agricultural credit. There exist regional inequalities in the distribution of institutional credit.
It is suggestible that more and more regional rural banks should be set up to need the credit need of the rural and backward areas of India.
Agricultural Marketing, Diversification of Agricultural Activities and Organic Farming in Indian Economics Part 3
Agricultural Marketing Agricultural marketing is the process that involves functions of assembling, storage, processing, packaging, transportation, grading and distribution of agricultural commodities throughout the country.
In other words, agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer.
Need of Agriculture Marketing
Need of agriculture marketing originates due to the problems faced by farmers.
Different types of problems faced by the farmers are
a)Farmers while selling their produce to traders suffered from faulty weighing and manipulation of accounts.
b)Due to lack of knowledge about the prices prevailing in the markets, farmers are often forced to sell their produce at low prices.
c)Farmers did not have proper storage facilities to keep back their produce for selling them at better price.
Approximately 10% of goods produced in farms is wasted due to lack of storage.
Distress Sale Lack of agricultural marketing infrastructure often forces the farmers to sell their produce at low prices for fear of spoilage or to pay off an imminent debt. This is termed as distress sale.
Farmers tend to suffer highly on account of these sales, because they not only get a low price for their produce, but are also cheated by use of false weights and are charged a high commission.
Measures by Government to Improve Agriculture Marketing
Four measures which were initiated to improve the agriculture marketing aspect are discussed below
1. Regulation of Markets The first measure to improve agriculture marketing aspect is regulation of markets to create orderly and transparent marketing conditions.
Regulated markets have been established where sale and purchase of the produce is monitored by the Market Committee consisting of representatives of government, farmers and the traders.
Market committee ensure that the formers get appropriate price of their produce. By and large, this policy benefited farmers as well as consumers. However there is still need to develop about 27000 rural periodic markets as regulated market places to realize the full potential of rural markets.
2. Improvement in Physical Infrastructure It is the second measure to improve the agriculture marketing aspect. The current infrastructure facilities like; roads, railways, warehouses, godowns, cold storages and processing units etc are inadequate to meet the growing demand. Through this measure government ensures the improvement in physical infrastructure.
3. Cooperative Marketing It is the third measure taken by government in realising the fair prices for farmers products.
As members of these societies, formers find themselves better bargainers in the market and get better prices of their produce through collective sale. The success of milk cooperatives in Gujarat and some other parts of the country are the brilliant examples of cooperative marketing.
Different problems faced by cooperative during the recent past are
- Inadequate coverage of former members.
- Lack of appropriate link between marketing and processing cooperatives.
- Inefficient financial management.
Supporting Policies
It is the fourth measure taken by government to improve agriculture marketing system. Different supportive policies applied in this regard are
Minimum Support Price (MSP) is an important step to improve agriculture market system. MSP is an assurance to the farmers that a minimum price will be fixed by the government to formers’ produce, no purchasing can be done below this price, however farmers can sell their produce in open market above MSP. This policy assured a minimum income to the farmers.
Maintenance of Buffer Stocks of Wheat and Rice Purchases from the farmers are kept by Food Corporation of India as buffer stocks.
Distribution of Foodgrains and Sugars Through Stocks purchased by government at MSP are used primarily for Public Distribution System (PDS). Distribution of foodgrains and other necessary items like kerosene oil at subsidised price to the poor takes place through fair price shops.
Emerging Alternative Marketing Channels In India, alternative marketing channels are emerging. Through these channels, farmers directly sell their products to the consumers. This system increases farmers’ share in the prices paid by the consumers.
Important examples of such channels are
i)Apni mandi (Punjab, Haryana and Rajasthan).
ii)Hadaspar mandi (Pune); Rythu Bazars (Vegetables and fruit market in Andhra Pradesh)
.iii)Uzhavar sandies (Farmers’ Markets in Tamil Nadu).Several national and international fast food chains and hotels are also entering into contracts with the farmers to supply them farm products (fresh vegetables and fruits) of the desired quality.
Diversification into Productive Activities
Diversification means a major proportion of the increasing labour force in the agricultural sector needs to find alternate employment opportunities in other non-farm sectors. Diversification is an emerging challenge in the context of rural development. It has two aspects
i)Diversification of crop production
ii)Diversification of productive activity
Diversification of Crops
This implies a shift from single cropping system to multi-cropping system. In India, where subsistence farming is still dominant, it may also mean a shift from subsistence farming to commercial farming.
Significance of Diversification of Crops Diversification of crops is improtant because it willi)Minimise the risk due to failure of monsoon .ii) Reduc the market risk arising due to price fluctuations.
Need of Diversification into Productive Activities
Agriculture sector is a seasonal based activity, most of agriculture employment activities are concentrated in Kharif season.
In Rabi season, in the areas where irrigation facilities are inadequate, it becomes difficult to find gainful employment.
So, there is a need to focus on allied activities, non farm employment and other emerging alternatives of livelihood.
Also agriculture sector is already overcrowded, a major proportion of the increasing labour force needs to find alternate employment opportunities in other non-farm sectors.
Some non-farm activities are discussed below
1. Animal Husbandry
In India, the forming community uses the mixed crop-live stock forming system. Cattle, goats, fowl are the widely domesticated species.
Livestock production provides increased stability in income, food security, transport, fuel and nutrition for the family without disrupting other food producing activities. livestock sector alone provides alternate livelihood options to over 70 million small and marginal farmers including landless labourers.
Poultry accounts for the largest share with 55% followed by others. India has about 304 million cattle, including 105 million buffaloes.
A significant number of women also find employment in the livestock sector.
Milk production in the country has increased by more five times between 1960-2009. This can be attributed mainly to the successful implementation of ‘operation flood’.
Meat, eggs, wool and other by-products are also emerging as important productive sectors for diversification.
In numbers, our livestock population is quite impressive but its productivity is quite low as compared to other countries.
It requires improved technology and promotion of good breeds of animals to enhance productivity.
Improved veterinary care and credit facilities to small and marginal formers and landless labourers would enhance sustainable livelihood options through livestock production.
Operation Flood
It is a system whereby all the farmers can pool their milk produced according to different grading (based on quality) and the same It is processed and marketed to urban centres through cooperatives
In this system farmers are assured of fair price and Income from the supply of the milk to urban markets. Gujarat state is held as a success story in the efficient implementation of milk cooperatives which has been emulated by many states.
Fisheries
The socio-economic status of fishermen is comparatively lower because of rampant underemployment, low per capital earnings absence of mobility of labour to other sectors
high rate of illiteracy indebtedness
Horticulture
As India has variable climate and soil conditions, India has adopted growing of diverse horticultural crops such as fruits, vegetables, tuber crops, flowers, medicinal and aromatic plants, spices and plantation crops.
These crops play an important role in providing food, nutrition and employment. The period between 1991-2003 is called ‘golden revolution’ because during this period, the planned investment in horticulture became highly productive and the sector emerged as a sustainable livelihood option
India has emerged as a world leader in producing a variety of fruits, like mangoes, bananas, coconuts, cashew, nuts and a number of species and is the second largest producer of fruits and vegetables.
Economic conditions of many formers engaged in horticulture has improved and has become a means of improving livelihood for many unprivileged classes.
Flower harvesting, nursery maintance, hybrid seed production and tissue culture, propagation of fruits and flowers and food processing are highly profitable employment opportunities for rural women. It has been estimated that this sector provides employment to around 19% of the total labour force.
Other Alternate Livelihood Options
The Information Technology (IT) has revolutionised many sectors in the Indian economy.
It plays a very significant role in achieving sustainable development and food security in the following ways
i)It can act as a tool for releasing the creative potential and knowledge embedded in our people ii)Issues like weather forecast, crop treatment, fertilisers, pestisides storage conditions, etc can be well administered, if expert opinion is made available to the farmers
.iii)The quality and quantity of crops can be increased manifold, if the farmers are made aware of the latest equipments, technologies and resources.
iv)It has ushered in a knowledge economy.
v)It has potential of employment generation in rural areas.
Every Village A Knowledge Centre
MS Swaminathan Research Foundation, an institution located in Chennai, Tamil Nadu, with support from Sir Ratan Tata Trust, Mumbai, has established the Jamshedji Tata National Virtual Academy for Rural Prosperity.
The academy envisaged to identify a million grass root knowledge workers who will enlisted as fellows of the academy.
The programme provides an info-kiosk (PC with internet and video conferencing facility, scanner, photocopier, etc) at a low cost and trains kiosk owner; the owner then provides different services and tries to earn a reasonable income. The Government of India has decided to join the alliance by providing financial support of Rs. 100 crore.
Sustainable Development and Organic Farming
Conventional agriculture uses chemical fertilisers and toxic pesticides, etc which enter the food supply, penetrate the water resources, harm the livestock, deplete the soil and devastate natural eco-system.
Due to these problems, an eco-friendly technology is required. Organic farming is such technology which restores, maintains and enhances the ecological balance. There is an increasing demand for organically grown food to enhance food safety throughout the world.
Benefits of Organic Farming
i)Organic forming substitutes costlier agriculture inputs like HYV seeds, chemical fertlisers, pesticides, etc with locally produced organic inputs that are cheaper and thereby generate good returns on investment
ii).Organic forming also generates income through exports.
iii)Organically grown food has more nutritional value than chemical forming, thus providing us with healthy foods
.iv) Produce pesticide free and produced in an environment sustainable way. Due to more labour requirement in organic farming, it is an attractive proposition for India.
Limit of Organic Farming
i)Yields from organic forming are less than modern agricultural forming in the initial years. Therefore, small and marginal formers may find it difficult to adapt to large scale production
ii)Organic produce have shorter shelf life than sprayed produce.
iii)Choice in production of off-season crops in quite limited in organic forming
HUMAN CAPITAL FORMATION In Indian Economic part 3
Human Capital is the stock of ‘skill and expertise’ of a nation at a point of time. It is the sum total of skill and expertise.
Human Capital Formation is the process of adding to the stock of human capital over time. whereas Physical Capital refers to the stock of produced means of production.
It consists of machines, production plants etc. and Financial Capital is the stocks/shares of the companies or these are simple financial claims against assets of the companies.
Sources of Human Capital Formation
i)Expenditure on Education
ii) Expenditure on Health
iii)On-the-Job Training
iv)Study Programmes for Adults
v) Migration
vi)Expenditure on Information
Human Capital Formation and Economic Growth in Indian Economics part 3
Higher Productivity of Physical Capital can be created by Human capital formation as it increases productivity of physical capital specialized engineers and skilled workers can certainly handle machines better than the other.
Innovative Skills are use which facilitates the use and growth of economy. Innovation is the life line of growth. Higher Rate of Participation and Equality also enhances productive capacities of the labour force, human capital formation creates greater employment.
Thus, there is a cause and effect relationship between human capital formation and economic growth.
Problems Facing by Human Capital Formation in India
:i)Rising population of India due to poor people cannot get the opportunity for study and attainment of skill
ii)Brain drain is another problem as the educated and skillful youth when see the lack of opportunities in he country they go the foreign countries to serve
iii)Deficient man power planning in the form of unemployment or under employment the person having the skill are not being used properly for the development
iv)Low academic standards which do not produce skill only make bookish warm which is not fruitful to earn their livelihood
Human Capital and Human Development in Indian Economics
Human capital and human development are related concepts, but certainly not identical. Human capital is a means to an end. Human development is an end itself.
Education as an Essential Element of Human Resource Development
It implies the process of teaching training and learning especially in schools or colleges, to improve knowledge and develop skills.
Growth of Education Sector in India
Following observations highlight the growth of education sector in India
Expansion of general education. Primary education has been focused along withSecondary education and Higher education
Vocationalisation of secondary education has been given focused along with Technical, medical and agricultural education emphasis given over Rural education, Adult and female education Total literacy campaign has been started.
Education Still a Challenging Proposition
Education system of the country which along with the following facts makes education still challenging proposition in India. There are Large Number of Illiterates still in the country.
We have Inadequate vocationalisation in the education system . The Education in our country is Gender bias in which male are given priority than female
In villages there are Low rural access level of educational institution and low and substandard . Due to Privatisation education has become costly and above there is Low government expenditure on education
Right to Education (RTE)
In the year 2012, the Government of India has brought about an Act, called RTE. It promises education to all. It makes education a matter of right to all children in the age group of 6-14 years.
The concept of human capital formation, source of human capital and its growth is revealed in the chapter. It also deals with the relationship among human capital, economic growth and human development.
Concepts and Sources of Human Capital Formation
Country can turn physical resources like land into physical capital like factories, similarly it can also turn human resources like students into engineers and doctors.
There by increasing their productivity and efficiency. So, human capital formation aims at converting human resources into human assets.
Human Capital and Physical Capital
- Human Capital It refers to the stock of skill, ability, expertise, education and knowledge in a nation at a point of time.
- Physical Capital All inputs which are required for further production such as machine, tools and implements, factory buildings, etc are called physical capital.
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Human Capital Formation
It is the process of acquiring and increasing the number of people who have the skills, education and experience which are critical for the economic and political development of a country.
In other words, human capital formation is the process of adding to the stock of human capital over time.
G. Meier defines human capital formation as, “human capital formation is the process of acquiring and increasing the number of persons who have the skiff education and experience which are essential for the economic and political development of a country”.
Sources of Human Capital Formation in Indian Economics part 3
Investment in education is considered as one of the most important sources of human capital formation.
There are several other sources by which human capital can be formed. Investment in health, on-the-job training, migration and information are the other sources of human capital formation.
These sources are discussed below
1. Expenditure on Education
The education expenditure is an important source of human capital formation as it is the most effective way on enhancing and enlarging a productive workforce in the country.
Nations and individuals invest in education with the objective
i) increasing their future income
.ii),generating technical skills and creating manpower, well suited for improving labour productivity and thus, sustaining rapid economic development.
iii)tending to bring down birth rate which in turn, brings decline in population growth rate. It makes more resources available per person.
iv)education also results in social benefits since, it also spreads to others.
2. Expenditure on Health
Health is another important source of human capital formation. A sick labours without access to medical facilities is compelled to abstain from work and there in a loss of productivity. The various forms of health expenditure are preventive medicine, curative medicine, social medicine, provision of clean drinking water, etc.
3. On-the-job Training
Expenditure regarding on-the-job training is a source of human capital formation as the return of such expenditure in the form of enhanced labour productivity is more than the cost of it.
Firms spend huge amounts on giving on-the-job training to their workers. It may be in different forms like a worker may be trained in the firm itself or under the supervision of a skilled worker or can be sent for off campus training.
The firms insist that workers should work for at least some time in company so that they can recover the benefits of the enhanced productivity owing to the training.
4. Migration
People sometimes migrate from one place to the other in search of better jobs that fetch them higher salaries than what they may get in their native places.
It includes migration of people from rural areas to urban areas in India. Unemployment is the reason for the rural urban migration in India and technically qualified people migrate from one country to another in order to get high salaries.
5. Expenditure on Information
People spent to acquire information relating to the labour market and other markets like education, health, etc.
For example, people seek information regarding salaries and other facilities available in different labour markets, so that they can choose the right job.
Expenditure incurred for acquiring information regarding labour markets and other markets like education and health have also becomes an important source of human capital formation.
Economic Growth and State of Human Capita! Formation
Human Capital and Economic Growth: India recognised the importance of human capital in economic growth long ago.
The Seventh Five Year Plan says, ‘Human resources development has necessarily to be assigned a key role in any development strategy, particularly in a country with a large population’.
The Higher Productivity of Physical Capital: Human capital increases productivity of physical capital as specialised and skilled workers can handle machines or techniques better than the unskilled works. This increased productivity and hence production leads to economic growth.
Innovative Skills Human capital facilitates innovation of new methods of production and this increase the rate of economic growth in the form of increase in GDP.
Higher Rate of Participation and Equality Human capital formation leads to a higher employment rate. With increase in employment, the productivity rises.
Also, increase in employment opportunities also increases the level of income and this helps in reducing inequalities of wealth.Both, increase in employment rate and decrease in income inequalities are pointers of economic development.
Brings Positive Outlook The process of human capital formation bring in a positive outlook to the society which is different from orthodox and traditional ways of thinking, and hence increases the rate of participation in the workforce causes increase in level of production.
Indian Economics part 3 as a Knowledge Economy
The Indian software industry has been showing an Impressive record over the past decade. Entrepreneurs, bureaucrats and politicians are now advancing views about how India can transform itself into a knowledge-based economy by using Information Technology (IT).
There have been some instances of villagers using e-mail which are cited as examples of such transformation. Likewise, e-governance is being projected as the way of the future.
The value of IT depends greatly on the existing level of economic development.
Human Capital and Human Development in Indian Economics part 3
Human development is the broader term than human capital because Human capital considers education and health as a means to increase labour productivity.
Human development is based on the idea that education and health are integral to human well-being because when people have the ability to read and write and the ability to lead a long and healthy life, they will be able to make other choices they value.
In human capital view, any investment in education and health is unproductive, if it-does not enhance output of goods and services.
In the human development perspective, human beings are ends in themselves. Therefore, basic education and basic health are important in themselves, irrespective of their contribution to labour productivity.
Deutsche Bank and World Bank Report on Indian Economy. According to two independent reports one from Deutsche and other from World Bank have identified that India would grow faster due to Its strength in human capital formation.
According to Deutsche Bank (a German Bank)’s report on Global Growth Centres, it has been identified tha India will emerge as one among four major growth Centres in the world by 2020. This report also says that between 2005 to 2020, we expect a 40% rise in the average years of education in India, to just above 7 years.
World’s Bank report India and the Knowledge Economy-Leveraging Strengths and Opportunities states that India should make a transition to the knowledge economy and if it uses its knowledge as much as Ireland does, then the per capita income of India will increase from a little over US $1000 in 2002 to US $3000 in 2020.
It further states that the Indian economy has all the key ingredients for making this transition such as a critical mass of skilled workers, a well functioning democracy and a diversified science and technology infrastructure.
Thus two reports point out the fact that further human capital formation in India will move its economy to a higher growth.
Problems of Human Capital Formation in India
The main problems of human capital formation in India are
Rising Population Rapidly rising population adversely affects the quality of human capital in under developed and developing countries like India.
It reduces per head availability of existing facilities like sanitation, employment, drainage, water system, housing, hospitals, education, food supply, nutrition, roads, electricity, etc.
Brain Drain Migration of highly skilled labour termed as ‘brain drain. This slow down the process of human capital formation in the domestic economy.
Inefficient of Manpower Planning There is inefficient manpower planning in less developed countries where no efforts have been made either to raise the standard of education at different stages pr to maintain the demand and supply of technical labour force. It is a sad reflection on the wastage of human power and human skill.
Long-term Process The process of human development is a long-term policy because skill formation takes time.
The process which produces skilled manpower is thus, slow. This also lowers our competitiveness in the international market of human capital.
High Poverty Levels A large proportion of the population lives below poverty line and do not have access to basic health and educational facilities.
A large section of society cannot afford to get higher education or expensive medical treatment for major disease.
Human Development Index
The Human Development Index (HDI) is a composite statistic of life expectance education, and income indices rank countries into four tiers of human development.
It was created by economist Mahbub Ul Haq, followed by economist Amartya Sen in 1990, and published by the United Nations Development Programme. India has 136th position in the World Human Development Index.
Education Sector in Indian Economics part3
Education implies the process of teaching, training and learning especially in schools or colleges, to improve knowledge and develop skills.
The important objective of education that It produces good citizens, It develops science and technology., It facilities use of natural and human resources of all regions of the country.,It expands mental horizon of the people.
Growth in Government Expenditure on Education
Government expenditure on education can be expressed in two ways i)As a percentage of‘ total government expenditure .ii)As a percentage of Gross Domestic Product (GDP).
The percentage of ‘education expenditure of total government expenditure’ indicates the importance of education in the scheme of expenses before the government.
Expenditure on education out of our GDP shows how much we are committed towards the development of education in our country.
During 1952-2010, education expenditure as percentage of total government expenditure increased from. 7.92% to 11.1% and as percentage of GDP increased from 0.64% to 3.25%. During this period expenditure on education was not constant. There was irregular rise and fell.
Expenditure on Elementary Education in India Economics part 3
Elementary education takes a major share of total education expenditure and the share of the higher/tertiary education is the least. But expenditure per student on tertiary education is higher than that of elementary.
If Number of school are increased , we need more teachers who are trained in the higher educational institutions, therefore, expenditure on all levels of education should be increased.
The per capita education expenditure is as high as Rs. 2005 in Himachal Pradesh to as low as Rs. 515 in Bihar.This leads to differences in educational opportunities across states.
Free and Compulsory Education
The Education Commission (1964-66) had recommended that atleast 6% of GDP to be spent on education so as to make a noticeable rate of growth in education.
In December 2002, the Government of India, through the 86th Amendment of the Constitution of India, made free and compulsory education a fundamental right of all children in the age group of 6-14 years. Government of India in year 1998 appointed.
The Tapas Majumdar Committee, which estimated an expenditure of around 1.37 lakh crore over 10 years (1998-99 to 2006-07) to bring all Indian children in the age group of 6-14 years, under the purview of school education.
Desired level of expenditure an education is 6% of GDP but the current level is little over 4% which is not inadequate. It is necessary to reach the level of 6% which is considered as must for coming years.
Recently, Government of India has started levying a 2% ‘education cess’ on all Union taxes. The revenues from education cess has been earmarked for spending on elementary education.
Educational Achievements in India Generally, educational achievements in a country are indicated in terms of, Adult literacy level, Primary education completion rate ,Youth literacy rate
These statistics for the years 1990 to 2010 are given in the following table
table from ncert bk
Future Prospects
India government considers education a key sector where considerable for growth and development Thus, it has set some future prospects for framing its policies.
Education for All : Still a Distant Dream
Although the education level in India has risen for both adults as well as for youth. Still the number of illiterates in India are as much as the population was at the time of Independence.
In 1950, when the Constitution of India was passed by the constituent assembly, it was noted in the directive principles of the constitution that the government should provide free and compulsory education for all children up to the age of 14 years within 10 years from the commencement of the constitution.
The following factors makes education still a distant dream
i)Large number of illiterates
ii)Inadequate vocationalisation,
iii) Gender bias ,Low rural access level ,Low government expenditure on education
Gender Equity : Better than Before
The differences in literacy rates between males and females are narrowing, signifying a positive development in gender equity; still the need to promote education for women in India is imminent for various reasons
,Improving economic independence., Social status of women., Healthcare of women and children. Therefore, we cannot show the satisfaction about the upward movement in literacy rates as we have miles to go in achieving cent percent adult literacy.
In India, Mizoram, Kerala, Goa and Delhi are the states having high literacy rate, while Bihar, Uttar Pradesh, Rajasthan and Arunachal Pradesh are the educationally backward states.
The educational backwardness is due to social and economic poverty of the people.
Higher Education : A Few Takers
The Indian education pyramid is steep, indicating lesser and lesser number of people reaching the higher education level.
As per NSSG (National Sample Survey Organisation) data, in the year 2007-08, the rate of unemployment for youth with education up to secondary level and above was 18.1% whereas, the rate of unemployment for youth with education up to primary level was only 11.6%.
Therefore, the government should increase allocation for higher education and also improve the standard of higher education institutes, so that students are imparted employable skills in such institution
COMPARATIVE DEVELOPMENT OF INDIA AND NEIGHBOURS in Indian Economics part 3
Indian Economics part 3When we discuss the globalisation , developing countries are interested to understand the developmental processes pursued by their Neighbours as they face competition from developed nations and the other Asian countries
Foreign Direct
Investment is much larger compared to India and Pakistan, and a much strong means of growth. SEZs (Special Economic Zones) policy of China is of central significance encouraging FDI. SEZs are offering an important infrastructural facilities for FDI.
Demographic Profile
Both for India and China, large size of population is the greatest hindrance in the process of growth, because it requires a large amount of ‘maintenance for investment’
i)Life expectancy-higher the better.
ii)Adult literacy rate-higher the better.
iii)Infant mortality rate-lower the better.
iv) Maternal mortality rate-lower the better.
v) Percentage of population having access to improved water sources-higher the better. vi)Percentage of undernourished population-lower the better.
With the aim of accelerating the pace of growth, different countries are forming regional and global economic grouping based on common agreements of bilateral relations. e.g., SAARC, EU, ASEAN, G-8, G-20.
Common features of economy of India and Pakistan which include
i )A substantial rise in GDP per capita.
ii)Self-sufficiency in food production
.iii)Dualistic nature of the economy is declining.
vi) Reduction in the incidence of poverty.
Common causes of their unsuccess were
i) Both the countries slow pace of GDP growth, compared with China.
ii) Both the country show the Poor performance in HDI ranking.
iii) Both the country have Dismal Fiscal management.
iv) Political survival of a dominating issue rather than good governance. is seen in the both the countries
Sex Ratio Sex ratio is found to be low in all three countries pointing to social backwardness, where people hold high preference for a son in the family.
Development Strategies of India, China and Pakistan
India, China, Pakistan have many similarities in their development strategies which are as follows
India, Pakistan and China have started towards their developmental path at the same time. India and Pakistan became independent nations in 1947.
While Peoples Republic of China was established in 1949.All the three countries had started planning their development strategies in similar ways.
India announced its Five Year Plan in 1951-56, while ’ Pakistan announced its first Five Year Plan in 1956, which is called Medium Term plan. China announced its First Five Year Plan in 1953.
India and Pakistan adopted similar strategies such as creating a large public sector and raising public expenditure on social development. Till the 1980s, all the three countries had similar growth rates and per capita incomes.
Economic reforms took place in all the three countries. Reforms started in India in 1991, in China in 1978 and in Pakistan in 1988.
Development Strategies of India
Some of the prominent steps of India development are
1. Sound Trade System :India was a country which had the history of closed trade. Because of this historical background;
There is a critical challenge for India in order to make a new policy which can support the new open trade system. This new reform in economies of India has been introduced and accelerates the economic growth of India.
2. Reduction in Poverty: India has adopted several poverty alleviation programmes to reduce poverty in India. -This helped in increasing per capita income, rise in nutrition level of poors and there is gradual fall in percentage of absolute poor in some states.
3. Rural Development: , India adopted various measures for the development of areas that are lagging behind in the overall development of village economy.
4. Employment Generation: Many economic reforms were initiated to generate employment in the country and their aim is to provide gainful self-employment and skilled wage employment opportunities.
Development Strategies of China
After the establishment of People’s Republic of China under one party rule, all the critical sectors of the economy, enterprises and lands owned and operated by individuals were brought under government control.
Certain development methods of China’s development are
Great Proletarian Cultural Revolution (1966-76) In 1965, Mao Tse Tung started a cultural revolution on a large scale.
In this revolution, students and professionals were sent to work and learn from the country side. Unlike GLF, the cultural revolution did not have an explicit economic rationale.
1978 Reforms :Since 1978, China began to introduce many reforms in phases. The reforms were initiated in agriculture, foreign trade and investment sector.
In agriculture, lands were divided into small plots which were allocated to individual households. They were allowed to keep all income from the land after paying taxes.
In later phase, reforms were initiated in industrial sector.
All enterprises which were owned and operated by local collectives in particular, were allowed to produce goods.
At this stage, enterprises owned by government (known as State Board Enterprises – SOEs), in India we call them public sector enterprises were made to face competition.
In reform, prices were fixed in two ways, i.e., farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs on the basis of prices fixed by the government and the rest were purchased and sold at market prices.
Over the years, as production increased, the proportion of goods or inputs transacted in the market also increased.
The goal of Chinese economic reforms was to generate sufficient surplus to finance the modernisation of the mainland Chinese economy. In order to attract foreign investors, Special Economic Zones (SEZs) were set up.
Development Strategies of Pakistan
The development path of Pakistan are Mixed Economy Pakistan follows a mixed economy system where both public and private sectors co-existed.
Import Substitution :Pakistan adopted a regulatory policy framework in the late 1950s and 1960s for import industrialisation. The -policy combined tariff protection for manufacturing of consumer goods together with direct import controls on competing imports.
Green Revolution :This was introduced to increase the productivity and self sufficiency in food. This increased the output of foodgrains. This had changed the agrarian structure dramatically. In 1970’s nationalisation of capital goods took place.
Pakistan shifted its policy orientation in 1970’s and 1980’s when private sector got encouragement. During this period, Pakistan received financial support from Western. This helped the country in stimulating economic growth.
Government also offered incentives to private sector. This had a created climate for new investments. And in 1988 certain reforms were also initiated in the country.
CAUSES OF SUCCESS AND FAILURES
The development path brought structural reforms in China, India and Pakistan.
Success of Structural Reforms in China
i)There was existence of infrastructure in the areas of education and health and land reforms. ii)There was decentralised planning and existence of small enterprise.
iii)By the commune system, there was more equitable distribution of foodgrains.
iv)There was extension of basic health services in rural areas.
The failures of structural reforms in China are
i)There was slow pace of growth and lack of modernisation in the Chinese economy under the Maoist rule.
ii )Maoist vision of economic development based on decentralisation, self sufficiency and shunning of foreign technology had failed.
iii)Despite of extensive land reforms, collectivisation, the great leap forward and other initiatives, the per capita gain output in 1978 was the same
Common Success of Structural Reforms in India and Pakistan
Both India and Pakistan have succeeded in more than doubling their per capita incomes inspite of high growth rate of population.
The incidence of poverty has also been reduced significantly. However, the level of poverty is lower in Pakistan.
Both the countries have achieved self-sufficiency in the production of food.
Both the countries have succeeded in developing their service and industry sectors at a fast rate.
The use of modern technology is improving in both the countries.
Common Failures of Structural Reforms in India and Pakistan
The common failures of structural reforms in India and Pakistan are Growth rate of GDP and its sectoral constituents have fallen in 1990’s.Poverty and unemployment are still areas of major concerns in both the countries.
Areas Where Pakistan has an Edge Over India
Starting from almost the same level as India, Pakistan has achieved better results with regards to Migration of workforce from agriculture to industry, Migration of people from rural to urban areas. Access to improved water sources. Reduction in below poverty line population.
Areas where India has an Edge Over Pakistan
There is little doubt that, in the area of skilled manpower and research and development institutions.
India is better placed than Pakistan. Indian scientists excel in the areas of defence technology, space research, electronics and avionics, genetics, telecommunications, etc.
The number of Ph.Ds produced by India in science and engineering every year (about 5000) is higher than the entire stock of Ph.Ds in Pakistan.
Issues of health facilities in general and infant mortality in particular are better addressed in India.
Comparative Study
With Respect to Demographic Indicators, GDP and HDI .
I. Demographic Indicators
We shall compare some demographic indicators of India, China and Pakistan
The population of Pakistan is very small and accounts for roughly about one-tenth of China or India. Though China is the largest nation and geographically occupies the largest area among the three nations, its density is the lowest.
One child norm was introduced in China in late 1970’s to check the problem of population growth. This measure led to decline in the sex ratio. Although sex ratio is biased against females in all three countries, in recent times, all three countries are trying to adopt various measures to improve the situation.
After few decades there will be more elderly people in proportion to young people due to one child norm.The fertility rate is low in China and very high in Pakistan.Urbanisation is high in both Pakistan and China.
II. Gross Domestic Product and Sectors
According to the latest data available, we find
(i) China has the second largest GDP (PPP) of US$ 10.1 trillion whereas, India’s GDP (PPP) is US $ 4.2 trillion and Pakistan’s GDP (PPP) is 0.47 trillion US$; roughly about 10% of India’s GDP.
(ii) In 1980’s, Pakistan was ahead of India, China was having double digit growth and India was at the bottom.
Source Key indicators for Asia and Pacific 2011, Asian Development Bank, Phillipines
(iii) In 2000-10 there is a marginal decline in India and Chinas growth rates whereas Pakistan met with drastic decline in 4.7%. The reform processes introduced in 1988 in Pakistan and political instability are reasons behind this trend.
(iv) China and Pakistan have more proportion of urban people than India.
(v) In China, due to topographic and climatic conditions, the area suitable for cultivation is relatively small-only about 10% of its total land area. The total cultivable area in China accounts for 40% of the cultivable area in India.
(vi) Until the 1980s, more than 80% of the people in China were dependent on farming as their sole source of livelihood.
(vii) The government encouraged people to leave their fields and pursue other activities such as handicrafts, commerce and transport.
(viii) In 2008, with 40% of its workforce engaged in agriculture, its contribution to GDP in China is 10%. from NCERT BK
(ix) In both India and Pakistan, the contribution of agriculture to GDP was at 19 and 21% respectively. But the proportion of workforce that works in this sector is more in India. In Pakistan, about 45% of people work in agriculture whereas in India it is 56%.
(x) The sectoral share of output and employment also shows that in all the three economies, the industry and service sectors have less proportion to workforce but contribute more in terms of output.
(xi) In China, manufacturing contributes the highest to GDP at 47% whereas in India and Pakistan, it is the service sector which contributes the highest. In both these countries, service sector accounts for more than 50% of GDP. In the normal course of development, countries first shift their employment and output
With the unfolding of the globalisation process, developing countries are keen to understand the developmental processes pursued by their neighbours as they face competition from developed nations as also amongst themselves.
Development Strategies of India, China and Pakistan
India, China, Pakistan have many similarities in their development strategies which are as follows
India, Pakistan and China have started towards their developmental path at the same time. India and Pakistan became independent nations in 1947. While Peoples Republic of China was established in 1949.
All the three countries had started planning their development strategies in similar ways. India announced its Five Year Plan in 1951-56, while ’ Pakistan announced its first Five Year Plan in 1956, which is called Medium Term plan. China announced its First Five Year Plan in 1953.
India and Pakistan adopted similar strategies such as creating a large public sector and raising public expenditure on social development.
Till the 1980s, all the three countries had similar growth rates and per capita incomes.
Economic reforms took place in all the three countries. Reforms started in India in 1991, in China in 1978 and in Pakistan in 1988.
Development Strategies of India
Some of the prominent strategies of India are discussed below
1. Sound Trade System India was a country which had the history of closed trade. Because of this historical background; there is a critical challenge for India in order to make a new policy which can support the new open trade system. This new reform in economies of India has been introduced and accelerates the economic growth of India.
2. Reduction in Poverty India has adopted several poverty alleviation programmes to reduce poverty in India. -This would help in increasing per capita income, rise in nutrition level of poors and there is a subsequent fall in percentage of absolute poor in some states.
3. Rural Development Under this strategy, India adopted various measures for the development of areas that are lagging behind in the overall development of village economy.
4. Employment Generation Several economic reforms were initiated to generate employment in the country and their aim is to provide gainful self-employment and skilled wage employment opportunities.
Development Strategies of China
After the establishment of People’s Republic of China under one party rule, all the critical sectors of the economy, enterprises and lands owned and operated by individuals were brought under government control.
Certain development strategies of China are discussed below
- Great Leap Forward (GLF) This campaign initiated in 1958 aimed at industrialising the country on a massive scale.
- People were encouraged to set up industries in their backyards. In rural areas, communes were started. Under the commune system, people collectively cultivated lands.
- Great Proletarian Cultural Revolution (1966-76) In 1965, Mao Tse Tung started a cultural revolution on a large scale.
- In this revolution, students and professionals were sent to work and learn from the country side. Unlike GLF, the cultural revolution did not have an explicit economic rationale.
- 1978 Reforms Since 1978, China began to introduce many reforms in phases. The reforms were initiated in agriculture, foreign trade and investment sector. In agriculture, lands were divided into small plots which were allocated to individual households.
- They were allowed to keep all income from the land after paying taxes.
In later phase, reforms were initiated in industrial sector. All enterprises which were owned and operated by local collectives in particular, were allowed to produce goods.
At this stage, enterprises owned by government (known as State Board Enterprises – SOEs), in India we call them public sector enterprises were made to face competition.
In reform, prices were fixed in two ways, i.e., farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs on the basis of prices fixed by the government and the rest were purchased and sold at market prices.
Over the years, as production increased, the proportion of goods or inputs transacted in the market also increased. The goal of Chinese economic reforms was to generate sufficient surplus to finance the modernisation of the mainland Chinese economy. In order to attract foreign investors, Special Economic Zones (SEZs) were set up.
Development Strategies of Pakistan
The development strategies of Pakistan are summarised below
- Mixed Economy Pakistan follows a mixed economy system where both public and private sectors co-existed.
- Import Substitution Pakistan adopted a regulatory policy framework in the late 1950s and 1960s for import industrialisation. The -policy combined tariff protection for manufacturing of consumer goods together with direct import controls on competing imports.
- Green Revolution This was introduced to increase the productivity and self sufficiency in food. This increased the output of foodgrains. This had changed the agrarian structure dramatically. In 1970’s nationalisation of capital goods took place. Pakistan shifted its policy orientation in 1970’s and 1980’s when private sector got encouragement.
During this period, Pakistan received financial support from Western. This helped the country in stimulating economic growth. Government also offered incentives to private sector. This had a created climate for new investments. And in 1988 certain reforms were also initiated in the country.
Success and Failure of Strategies
The development strategies brought structural reforms in China, India and Pakistan. Follow the description of their success and failure one by one.
Success of Structural Reforms in China
The success of structural reforms in China are
- There was existence of infrastructure in the areas of education and health and land reforms.
- There was decentralised planning and existence of small enterprise.
- Through the commune system, there was more equitable distribution of foodgrains.
- There was extension of basic health services in rural areas.
Failures of Structural Reforms in China
The failures of structural reforms in China are
- There was slow pace of growth and lack of modernisation in the Chinese economy under the Maoist rule.
- Maoist vision of economic development based on decentralisation, self sufficiency and shunning of foreign technology had failed.
- Despite of extensive land reforms, collectivisation, the great leap forward and other initiatives, the per capita gain output in 1978 was the same as it was in the mid-1950s.
China has an Edge Over India
The Chinese reform process began more comprehensively during the 80s, when India was in the mid-stream of slow growth process.
Rural poverty in China declined by 85% during the period 1978 to 1989. In India, it declined only by 50% during this period, Global exposure of the economy has been far more wider in China than in India. China’s export-driven manufacturing has recorded on exponential growth, while India continues to be only a marginal player in the international markets.
Common Success of Structural Reforms in India and Pakistan
Both India and Pakistan have succeeded in more than doubling their per capita incomes inspite of high growth rate of population.
The incidence of poverty has also been reduced significantly. However, the level of poverty is lower in Pakistan.
Both the countries have achieved self-sufficiency in the production of food. Both the countries have succeeded in developing their service and industry sectors at a fast rate. The use of modern technology is improving in both the countries.
Common Failures of Structural Reforms in India and Pakistan
The common failures of structural reforms in India and Pakistan are
- Growth rate of GDP and its sectoral constituents have fallen in 1990’s.
- Poverty and unemployment are still areas of major concerns in both the countries.
Areas Where Pakistan has an Edge Over India
Starting from almost the same level as India, Pakistan has achieved better results with regards to
- Migration of workforce from agriculture to industry,
- Migration of people from rural to urban areas.
- Access to improved water sources.
- Reduction in below poverty line population.
Areas where India has an Edge Over Pakistan
There is little doubt that, in the area of skilled manpower and research and development institutions. India is better placed than Pakistan. Indian scientists excel in the areas of defence technology, space research, electronics and avionics, genetics, telecommunications, etc. The number of Ph.Ds produced by India in science and engineering every year (about 5000) is higher than the entire stock of Ph.Ds in Pakistan. Issues of health facilities in general and infant mortality in particular are better addressed in India.
III. Human Development Indicator
India, China and Pakistan have performed in some of the selected indicators of human development.
Some Selected Indicators of Human Development, 2009-10
Source Human Development Report 2011 and World Development Indicators (www.worldbank.org)
From the data we would be able to conclude
- China is moving ahead of both India and Pakistan in terms of indicators of human development.
- Pakistan is ahead of India in reducing proportion of people below the poverty line and also its performance in education, sanitation and access to water is better than that of India.
- In China, for one lakh births, only 38 women die whereas, in India 230 women die and in Pakistan 260 women die.
- India is in the worst scenario as compared to the other two countries with respect to access to improved sanitation and clean water.
Conclusion : Indian Economics part 3 explained the detail study of Rural development with reference to rural credit, agriculture marketing , It also give the idea of human capital formation along with its sources and importance of human capital for the development Indian Economics . Lastly the comparative study of economic status among Indian, Pakistan and China
Conclusion : Indian Economics Part 3
IN the conclusion we would like to say that The Indian Economics part 3 consist of wide chapters of class 12 with the basic idea covering the syllabus of the class RUEAL DEVELOPMENT , HUMAN CAPITAL FORMATION , COMPARATIVE DEVELOPMENT OF INDIA/ PAKISTAN/ CHINA which gives right pathway for understanding the chapters.