FEATURES OF INDIAN ECONOMY

Let us now list the features of Indian economy as follows:

 (i) HEAVY POPULATION PRESSURE :

      India is maintaining a very high rate of growth of population since 1950. Thus the pressure of population in our country is very heavy. This has resulted from a Very High Level Of Birth Rates coupled with a falling level of death rates prevailing in our country.

      In India, the rate of growth of population has been gradually increasing from 1.31 per cent annually during 1941-50 to 2.5 per cent annually during 1971-81 to 2.11 per cent annually during 1981-91 and then finally to 1.77 per cent during  2001-2011.

      The prime cause behind this rapid growth of population is the steep fall in its death rate from 49 per thousand during 1911-20 to 7.1 per thousand in 2011. On the other hand, compared to its death rate, the birth rate of our population has gradually declined from 49 per thousand during 1911-20 to 21.8 per thousand in 2011.

      This imposes a greater economic burden on the economy of our country as to maintain such a rapidly growing population we require Food, Clothing, Housing, Schooling, Health Facilities etc.

 (ii) DEPENDENCE OF POPULATION ON AGRICULTURE

      Indian economy is characterised by too much dependence on agriculture and thus it is primary producing. Out of the total working population of our country, a very high proportion of it is engaged in agriculture and allied activities, which contributed a large share in the national income of our country.

 In 2004, nearly 58 per cent of the total working population of our country was engaged in agriculture and allied activities and was contributing about 21.0 per cent of the total national income.

      In most of the countries of Asia, Middle East and Africa, from two-thirds to four- fifths of their total population are solely dependent on agriculture. In most of the developed countries like U.K., U.S.A. and Japan, the percentage of active population engaged in agriculture ranges between 1 to 5 per cent.

      In India 58 per cent of its active population is engaged in agriculture but agriculture contributes only about 21 per cent of the national income of our country. Moreover, low agricultural productivity, lack of modernisation and lack of diversification in its output are some of the basic problems from which our agricultural sector is suffering.

      Thus our agricultural sector is overburdened as the majority of our active population is depending on agriculture.

(iv) POVERTY AND INEQUALITY INCOME DISTRIBUTION

      Unequal Asset Distribution is the primary cause of inequality in income distribution in rural areas. This inequality also highlights the fact that the resource base of 50 percent of households in India is weak. It is so weak that it can barely provide them with anything above the subsistence level of income.

      Poverty goes with inequality in Income And Wealth Distribution. Very few in India possess materials and wealth while majority have control over no or very little wealth in terms of land holding, house, fixed deposits, shares of companies, savings etc. Only top 5 percent of households control about 38 percent of total wealth in India while the bottom 60 percent of household has control over only 13 percent of the wealth. This indicates concentration of economic power in a very few hand.

PLANNED ECONOMY

      India is a planned economy. Its development process has been continuing through five year plan since the First Plan Period During 1951-56. The advantage of planning is very well known. Through planning the country sets its priorities first and provides the financial estimates to achieve the same. Accordingly efforts are made to mobilise resources from various sources at least cost.

      India has already completed eleven five year plan periods and the twelfth plan is in progress. After every plan a review is made analysing the achievements and short falls.

DIGITAL ECONOMY

 DEFINITION

Digital economy refers to an economy that is based on digital computing technologies, although we increasingly perceive this as conducting business through markets based on the internet.

The Digital Economy is worth three trillion dollars today. It is widely accepted that the growth of the digital economy has widespread impact on the whole economy. Various attempts at categorizing the size of the impact on traditional sectors have been made.

OPPORTUNITIES IN INDIA

Digital economy has the power to change the lives of millions of people in India.  India is developing a “mobile-first” digital culture, with smartphones  fuelling a boom in ecommerce and other forms of business. With a rapidly growing middle class, and a young, tech-savvy population, online personal services are about to take a big jump.

International companies are looking to increase their investment in India’s digital economy.  Improved telecom infrastructure as well as affordable smart phones now gives the opportunity to benefit from services such as banking and retail. According to industry experts, India has the potential to grow to USD 2 to 3 to 4 trillion digital economies by 2022.  Digital economy has the potential to generate huge employment opportunities. Digital skilling has lot of potential as India has rich talent pool that can be used to meet global demand

As the central bank, the RBI has been playing a vital role in promoting payment and settlement of monetary transactions involving the banking system. RBI has developed a well-structured payment and settlement system that facilitate the transfer of money all across the country.

In the payment and settlement front, initiatives taken by RBI in the mid-eighties and early-nineties focused on technology-based solutions for the improvement of the payment and settlement system infrastructure, coupled with the introduction of new technologies. One such important development was the introduction of electronic fund transfer.