Features of Indian and Mixed Economy

The Indian Economy is considered one of the world’s developing economies. There are different essential features that affect the Indian Economy. They are overpopulation, low per capita income, mixed economy, agriculture, infrastructure, etc. That’s why it is also known as the mixed economy. Also, initiatives by the government to improve the employment rate and cultural and economic factors have a significant role. Furthermore, poor infrastructure in healthcare, education, and finances has a significant effect on the Indian Economy. 

These are the salient features of the Mixed Economy of India. 

Planned Economy 

India is one of the prime examples of the Planned Economy. Every development process till now has been introduced by the five-year plan. Thus, the first five-year plan was introduced from 1951 to 1956. With these plans, effective methods are applied to achieve financial growth. 

Also, these plans help the government to make specific efforts to fulfill the goals. After drafting the plan, they are reviewed carefully to analyse its shortfalls and positive effects. In this way, necessary changes are made in the next plan and achieve better results. 

Hence, India’s planned economy has helped improve the per capita income significantly. Large companies also view India as a lucrative market for their growth due to effective planning. 

Low Per Capita Income

India has a low per capita income, which is the ratio of the national income to the population. Thus, it gives the appropriate idea about an individual’s average earnings in India. Compared to other developing countries, India’s per capita income is much lower. 

It is estimated that the per capita income of an Indian citizen from 2012 to 2013 was up to Rs. 39,168. In this way, the monthly income becomes around Rs. 3,264. In countries like the USA, the per capita income is around 15 times higher. Also, China has three times more per capita income than India. Hence, India needs to improve its low per capita income to reduce poverty. 

Poverty and Unequal Distribution of Income

Another crucial feature of the mixed economy is poverty and unequal distribution of income. According to the reports by the Government of India, around 269.3 million people are considered to be poor. People are termed poor when they are not getting the required food. 

Thus, they need to consume a minimum of 2100 calories in the urban area. And for the rural area, the minimum calorie intake should be 2400. Along with that, people in rural areas need Rs. 816 and in urban areas, Rs. 1000 per head. 

Hence, those who can’t have this income come below the poverty line. Along with that, the unequal distribution of wealth is also a significant factor. The Labour force also requires skilled workers; otherwise, it will lead to unemployment. Overall, it will affect the poverty rate. 

Overpopulation

After China, India has the largest population in the world. According to the census of 2011, the population of India stands at more than 125 crores. Thus, it is clear that India’s mixed economy is suffering from overpopulation. 

One of the primary reasons for the overpopulation is the declining death rate compared to the birth rate. The birth rate is calculated by dividing the number of people dying among 1000 people. On the other hand, the birth rate is calculated by the number of births happening in every 1000 people. 

As of 2010, the birth rate in 1000 people was 22.1 persons. But, the death rate was just 7.2 persons in every 1000 population. However, a lower death rate signifies that the health care system for the public has improved. But, a large population can also put a burden on health care, education, infrastructure, etc. 

Increased Capital Formation 

The lack of capital stock, such as machinery, land, equipment, etc., was a significant problem during the independence. For that, economic activities like consumption production, etc., required investments and savings. 

But, the required income was not generated during the first four decades after independence. It also requires around 14 percent of its GDP for investment. However, India’s saving rate as of 2011 is around 31.7 percent. 

Agriculture 

Most of India’s population depends on agricultural activities. According to 2011, around 58 percent of India’s population depends on agriculture. But still, the GDP in this sector is less than 17 percent.

The lack of advanced irrigation facilities and technology is the crucial reason for slow agricultural growth. Thus, important initiatives by the government and training can improve the agricultural sector. 

Conclusion

In conclusion, the Indian Economy is also called the mixed economy. It is a developing economy across the world. The essential features affecting the Indian Economy are overpopulation, agriculture, and low per capita income. It also includes a planned economy, poverty, and unequal distribution, which are also essential factors of the Indian Economy. India’s planned economy has helped achieve significant growth in the past years. However, the low decline in death rate is the primary cause of overpopulation. Along with that, India’s 58% population depends on agriculture but still needs massive development. 

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