Q.1 What are the common characteristics of
underdeveloped countries? 10
Answer:
India is a low income developing
economy. There is no doubt that one-fourth of its population lives in pathetic
condition. It is important to understand the basic characteristics of the
Indian economy, considering it as one of the poor but developing economics of
the world.
1.
Low per capita income
The
level of income as measured by per capita real GNP is very low in
underdeveloped countries. The per capita income of India in 2005 was $ 720
except for few countries; the per capita income of the Indian people is the
lowest in the world.
2.
Low level of living
Since about
three-fourth of world population lives in underdeveloped countries which have
less than one-fifth share in world income, it is obvious that a vast majority
of people in these countries must be living under conditions of poverty,
malnutrition, disease, squalor, illiteracy, etc. even basic necessities of
subsistence such as minimum food, clothing and shelter are not easily
accessible to the poor masses.
3.
High rate of population growth
Low productivity
combined with high growth rates of population is largely responsible for low
income and poor living standards. High growth rate of population means more
people to be fed, clothed and provided other necessary goods year after year.
In India rate of growth of population which was about 1.31 per cent per annum
during 1941-50 has risen to 1.93 per cent during 1991-2001.
4.
High levels of unemployment and underemployment
Unemployment levels
are high in the underdeveloped countries. Due to lack of capital and low level
of development in various economic sectors. Thus, countries have not been able
to make fuller use of their labour force.
5.
Predominance of agriculture in the economy
Since majority of
people (around 80 per cent of total population) live in rural areas and work in
agriculture, this is the biggest source of employment and biggest contributor
to national income.
6.
Low rate of capital formation
Another
one of the basic characteristic of the Indian economy is the existence of
capital deficiency. Capital deficiency is an important characteristic of
underdeveloped economy. Capital formation or investment is low in India, low
capital formation leads low productivity which leads to low incomes and the low
income leads to low saving, and then low saving leads to low rate of capital
formation. Thus it forms the vicious circle of poverty.
7.
Maldistribution of wealth/Assets
RBI
survey of assets of rural and urban households for the period July 1991 to June
1992 brings out the existence of sharp inequalities in asset distribution.
The
socio-economic indicators of consumption are characteristic of underdeveloped
economy in India
Underdevelopment
also finds expression through several socio-economic indicators, such as per
capita intake of calories, fats and protein, population per TV set and
physician. In the table below for selected countries indicate that India is far
behind the developed countries so far as these indicators of standard of living
are concerned. Illiteracy rate is also very high in India- 35% in 2001, as
against less than 5 per cent in developed countries.
Q.2 What is human development?
Answer:
World Bank in its 1991 'World Development
Report' asserted on the following:
"The challenge of development is to improve the quality of
life. Especially in the World's poorest countries a better quality of life
generally calls for higher incomes, but it involves much more. It encompasses
as ends in themselves better education, higher standards of health and
nutrition, less poverty, a cleaner environment, more equality of opportunity,
greater individual freedom, and a richer cultural life".
Therefore the present day economists are of the view that:
"Development must be conceived of as a multidimensional
process which could involve major changes in social structures, popular
attitudes, and national institutions, as well as the acceleration of economic
growth, the reduction in inequality, and the eradication of poverty.
Development, in its essence, must represent the whole gamut of change whereby
unsatisfactory life is replaced by a materially and spiritually better
life".
Therefore, for the sake of good socio-economic life Prof.
Goulet and others present three basic components or core values of
economic development.
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