NCERT Summary: India’s Economic Interaction with the World- 1 | Indian Economy for UPSC CSE PDF Download

Developmental Path - A Snapshot View

• India: India adopted a mixed economy model after gaining independence in 1947. The country's development strategies, especially in the early years, included the creation of a large public sector and increased public expenditure on social development. India announced its first Five-Year Plan in 1951, focusing on economic and social development. Over the years, India's planning process evolved, and currently, it follows the Tenth Five-Year Plan (2002-07).

• China: The People's Republic of China, established in 1949, initially implemented a command economy, bringing critical sectors and enterprises under government control. The Great Leap Forward (1958) aimed to industrialize rural areas and establish communes. The Cultural Revolution (1966-76) followed, involving sending students and professionals to learn and work in the countryside. China's significant industrial growth, however, traces back to the reforms initiated in 1978. These reforms phased in changes, initially in agriculture and later in the industrial sector. Special economic zones were established to attract foreign investment.

• Pakistan: Pakistan, like India, adopted a mixed economy model with a combination of public and private sectors. In the late 1950s and 1960s, it pursued import substitution industrialization policies. The Green Revolution led to increased food grain production, changing the agrarian structure. In the 1970s, capital goods industries were nationalized, followed by denationalization and encouragement to the private sector in the 1980s. Financial support from Western nations and remittances from emigrants to the Middle East stimulated economic growth. Reforms were initiated in 1988.

1. Demographic Indicators:

   • Population: India and China are two of the most populous nations globally. Pakistan's population is significantly smaller, accounting for about one-tenth of China or India. China is the most populous among the three, while Pakistan has the smallest population.

   • Population Density: China, despite being geographically the largest, has the lowest population density among the three. India and Pakistan have higher population densities.

   • Population Growth: Pakistan has the highest population growth rate, followed by India and China. China implemented the one-child norm in the late 1970s, contributing to its lower population growth. The resulting decline in the sex ratio is attributed to son preference in all three countries.

   • Fertility Rate: China has a low fertility rate, while Pakistan has a high fertility rate. India falls somewhere in between.

   • Urbanization: Urbanization is high in both Pakistan and China. India has a lower percentage of people living in urban areas compared to its neighbors.

2. Future Implications:

   • China's one-child policy and its resulting demographic shift may lead to a higher proportion of elderly people in the future, necessitating social security measures with fewer workers.

   • The demographic differences between the three nations have implications for their respective economic and social policies, especially in areas such as healthcare, employment, and social security.