A presentation on

Patterns of, trends in, and development strategies of economic development in India

since independence

By:Arjun Kafle

MBA 1st semesterFMS, BHU

Concept of Economic development:

•Economic development- growth plus progressive changes in certain crucial variables which determines the well being of the people.

•much more than growth. It typically refers to improvements in literacy rates, life expectancy, and poverty rates.

•economic growth-increase /growth of a specific measure such as national income, gross domestic product, or gross national product.

Economic development indicators:The various indicators of economic development are as follows:

•Literacy rates,

•Poverty,

•Life expectancy,

•Infrastructure, etc.

Some aspects of Indian economy

•Low per capita income•Disparities in income distribution•Dominance of agriculture and heavy population pressure on agriculture•Over-population•Unbalanced economic development•Existence of traditional society•Limited availability of transport and communication facilities

Literacy and economic development:

• simple definition-literate person-both read and write a simple statement relevant to everyday life.

Trends in literacy in India:

•Education progress was too slow before independence.

Literacy rates at different years:

Year Literacy rate (%)1881 3.21931 7.21947 12.21951 18.331961 28.31971 34.451981 43.571991 52.212001 68.84

Line chart representation of Literacy rate:

Government strategies to increase literacy rates:

• Sarva Siksha Abhiyan:Launched in 2001 to ensure that all children in the age group 6-14 years attend school and complete eight years of schooling by 2010.

• Siksha sahayog yojana: Lunched in 31 December 2001, the objective of this was to lessen the burden of parents in meeting the educational expense of their children. Centre-state 80-20% partnership

•District primary education: Central government sponsored program, launched in 1994, has opened more than 160,000 new schools.

•National literacy mission: Launched in 1998, this mission aims to attaining a literacy rate of 75% by 2007.

•Mid-day launch program: Launched in 1995, this program aims to attract students to school by offering meal, especially in rural areas.

•Kerala - 90.86%, and Bihar - 47% .

• Kottayam district of Kerala is first district in India to achieve highest literacy rate i.e. 90.52%.

Poverty and economic development:

•Meaning: failing to reach certain minimum consumption standard.

• 27.5% of Indians still lived below the national poverty line in 2004-05.

• 75% of the people living below poverty line are in rural areas.

•Wealth distribution is fairly uneven in India, with the top 10% of income groups earning 33% of the income.

• ¼ of the nations population earns less than the government-specified poverty threshold of $0.40/day.

Historical trends of poverty statistics:

Year Poverty rate(%)1951 47.01954-55 64.01960-61 45.01977-78 51.31983 44.51987-88 38.91993-94 36.02004-05 27.5

Line representation of poverty rate:

Government strategies to alleviate poverty:

• key objective of governments in its five-year plan.

• To reduce poverty, the government has given importance to education, reservation of seats in government jobs, and increasing empowerment of women.

• adding 60-70 million people in its middle class every year.

Contd…….

•Rural employment program & Food for work program:

Launched in 1980’s, which attempt to use the unemployed people to generate productive assets and build rural infrastructure.

•Rural employment guarantee bill:

Passed in august 2005 by Parliament of India, biggest program to alleviate poverty in terms of cost and coverage- promises 100 days of minimum wage employment to every rural household in 200 of India's 600 districts

Life expectancy and economic development:

Region Life expectancy at Birth Population>65 years

World 66 years 7%

India 60-61 years 4%

Life expectancy of various states:(source : registrar general of India (2003)

State Total Male Female

Andhra Pradesh 63.1 61.6 64.1

Assam 57.2 57.1 57.6

Bihar 60.2 60.7 58.9

Gujarat 62.8 61.9 63.7

Haryana 64.5 64.1 65.0

Himachal Pradesh 65.6 65.1 65.8

Karnataka 64.0 62.4 65.5

Kerala 73.5 70.6 76.1

Madhya Pradesh 56.4 56.5 56.2

Maharashtra 65.8 64.5 67.0

Orissa 57.7 57.6 57.8

Punjab 68.1 66.9 69.1

Rajasthan 60.5 59.8 60.9

Tamilnadu 58.4 63.7 65.7

Uttar Pradesh 63.4 58.9 57.7

West Bengal 61.7 62.8 64.3

Infrastructure and economic development:

• After independence, development of infrastructure was completely in the hands of public sector and was plagued by beauracratic inefficiencies, corruption, etc.

• After liberalization in 1991, private sector including foreign investment was allowed to invest in infrastructure sector which has helped to sustain growth rate of close to 9% for past few years.

• worlds second position in roadways construction

Contd……..

•At present, infrastructure has been expanding at a rapid pace to support the economic growth at nearly 9%. • six core infrastructure industries registered a robust increase of 9.6% during march 2008.

Infrastructures planned for future:

• 40,000 MW hydro power generation capacity during the 12th and 13th plan.

•Constructing freight corridors between Mumbai-Delhi and Ludhiana-Kolkata.

Contd………

Contd……..

•Modernization and redevelopment of 21 railway stations.

•Modernization and redevelopment of 4 metro and 35 non-metro airports.

•Six laning 6500 km of golden quadrilateral and selected national highways .

•Constructing 165,244 km of new rural roads.

• Planning commission,

• National development council, and

• State plans

• Established in march 1950.

• To make assessment of the material, capital and human resources of the country.

• To formulate the plan for the most effective and balanced utilization of the country’s resources.

•To indicate those factors to the government whose prove an obstacle in the economic development.

•To evaluate the from time to time the progress achieved in every stage of plan and also to suggest remedial measures.

•To advise the centre and the state government from time to time on special matters referred to the commission.

• One of the most important committee working under planning commission.

• Presided by prime minister and consists of union ministers, state chief ministers, members of planning commission.

• The secretary of the planning commission also acts as the secretary of this council.

Contd…….

Objectives of NDC

•To prescribe guidelines for the formulation of the national plan including the assessment of the resources for the plan.

•To consider the national plan as formulated by the planning commission.

•To consider important questions of the social and economic policy affecting national development.

•To review the working of the plan from time to time and to recommend such measures as are necessary for achieving the aims and targets set out in the national plan.

State plans

• Plans are made by state governments in coordination with central government and planning commission.

• Successful implementation of the plans made by planning commission/central government depends upon the successful implementation of state plans.

• State plans account for about one half of the outlay of the government under a five year plan.

Objectives of Indian plans

• Proper utilization of the national resources in accordance of the national priorities and fast development of the economy.

• Alleviation and ultimate removal of unemployment and poverty. • Improvements in the standard of living in general. • Reduce inequalities of income and wealth.

•Increase production to the maximum possible extent so as to achieve higher level of national and per capita income.

5 year plan Year Emphasis

First 1951-56 Agricultural sector

Second 1956-61 Basic and heavy industries

Third 1961-66 Export promotion

Fourth 1969-74 Self-reliance

Fifth 1974-79 Growth with social justice

Sixth 1980-85

Seventh 1985-90 Food, work , and productivity

Eighth 1992-97 Human development

Ninth 1997-2002

Tenth 2002-07 Growth with equity & distributive justice.

Eleventh 2007-12

The objectives of the tenth five year plans are as follows:

• GDP growth rate at 8%.• Reduction of poverty ratio to 20% percent.• Universal access to primary education.• Increase in literacy to 72 percent.• Reduction of IMR to 45 per 1000.• Reduction of MMR to 20 per 1000.• Increase in forest and tree cover by 25 percent.• Clearing of major polluted rivers by 2007

Target 2002-07 Actual 2002-07

Growth rate 8.00 7.80

Growth in agriculture 4.00 3.42

Growth in industry 8.9 8.74

Domestic savings 23.31 26.62

Average inflation 5.00 5.02

S.N. 5 year plan Target Actual

1 First 2.1 3.61

2 Second 4.5 4.27

3 Third 5.6 2.84

4 Fourth 5.7 3.30

5 Fifth 4.4 4.80

6 Sixth 5.2 5.66

7 Seventh 5.0 6.01

8 Eighth 5.6 6.68

9 Ninth 6.5 5.35

10 Tenth 8.0 7.8

11th five year plan (2007-2012)•Vision-To reduce poverty

•Growth rate of 10%

•Agriculture growth at 4%per year

•Growth of industrial sector to 10% and manufacturing sector to 12%

•Double per capita income by 2016-17

•Reduce educated unemployment rate to below 5%

•Reduce drop out rate of school children to 20% from 52% now.

•Literacy rate to be increased to 80%Contd………………..

•clean drinking water to all by 2009

•Electricity connection to all by 2009

•A telephone in every village by November 2007

•Broad band connectivity to all villages by 2011-2012

•Achieve WHO standard air quality in major cities by 2011-12.

INDIA VISION -2020

•Released on January 23, 2003 by planning commission

•Expected annual growth rate to be 9%

•Full elimination of unemployment, illiteracy, & poverty

•Per capita income to get doubled by 2020

•1.35 billion population of the country to have better living conditions by 2020

•With 2% annual employment generation rate, 20 crore new employment opportunities to be created by 2020