Basic Features Nature of Indian Economy- 1 Video Lecture - 60-Day Revision

0:0:0: India what at the moment it is not an
0:0:3: underdeveloped economy but when we had
0:0:6: attained independence British shores has
0:0:8: left had left us in a very bad state we
0:0:12: were a poor country which was half of
0:0:14: the tide high population and backward
0:0:16: economy so at that time we were called
0:0:22: as underdeveloped economy the first
0:0:29: thing that we had read in the previous
0:0:32: slide was that a country is called
0:0:36: underdeveloped because it has
0:0:38: agriculture as the main occupation the
0:0:41: same thing applies to India even in the
0:0:45: 1950s in agriculture was the main
0:0:49: occupation of the people of that country
0:0:51: of our country nearly seventy two
0:0:55: percent of the population this I am
0:0:57: talking about 50s nearly seventy two
0:1:2: percent of the population was dependent
0:1:5: on agriculture that was their main
0:1:8: occupation now when I talk about
0:1:11: agriculture I do not mean the people who
0:1:14: are doing farming agriculture means
0:1:17: agriculture and allied industry allied
0:1:27: industry means supporting industry then
0:1:30: you are in agriculture you know not only
0:1:34: need farmers who need fertilizers also
0:1:36: which are produced you need tractors and
0:1:40: all these equipments which are produced
0:1:42: you need seeds so and then when the crop
0:1:45: is grown you have to keep it in
0:1:46: warehouse so all the Allied industry are
0:1:49: talking about agriculture in a light
0:1:51: industry so 72% of the population was
0:1:53: involved in that sector even now 49
0:2:1: percent of the people are involved in
0:2:4: agriculture though over the years there
0:2:8: has been increase in absolute number or
0:2:11: the number of
0:2:12: people that have been working in the
0:2:13: agriculture percentage-wise we have come
0:2:15: down but as the population has increased
0:2:17: the absolute number of people that are
0:2:20: engaged in agricultural activity has
0:2:22: increased but what is interesting is
0:2:26: that people working on the farm sector
0:2:31: it has come down and people working on a
0:2:36: non farm sector they are associated with
0:2:39: agriculture industry but they are not
0:2:41: working on the farms that has gone up so
0:2:46: ours is a country which is dependent
0:2:48: which was always and still is dependent
0:2:50: on agriculture earlier there were 72
0:2:52: percent of people which were involved in
0:2:54: agricultural activities and now they are
0:2:57: like in 2000 present loosely present 49
0:3:2: percent of people are dependent on
0:3:4: agriculture the next is poverty if a
0:3:9: country is poor it is considered to be
0:3:12: an underdeveloped country now in the
0:3:15: context of India poverty is something
0:3:18: that we feel the moment we step out of
0:3:21: our house you see so many poor people
0:3:24: around us you see people begging on the
0:3:26: streets you see people sleeping on the
0:3:29: footpath and people actually settled
0:3:31: under the flyover with their whole
0:3:33: family which really shows that they do
0:3:36: not have a proper house or proper
0:3:40: facilities so there is possible poverty
0:3:43: all around us now how do we classify
0:3:47: poverty or poor is a very broad term how
0:3:51: do you how do you see that a person is
0:3:55: poor because the person who comes to
0:3:58: your house to work your maid she is also
0:4:1: poor your driver is also not a rich man
0:4:3: he is also poor and the man that is
0:4:6: begging on the street he is also poor so
0:4:9: how we decide that this is really poor
0:4:13: this is the poorest and then I start not
0:4:15: so poor than living a better life for
0:4:18: that we do it with the help of poverty
0:4:21: line we do it with the help of 4 with
0:4:26: line now what is poverty line poverty
0:4:30: line is the income income in economics
0:4:37: is denoted by the letter y so now
0:4:40: whenever I write Y irony income so
0:4:45: poverty line is the minimum is the
0:4:48: income that a person must have in order
0:4:51: to consume a minimum level of nutrition
0:5:2: which is essential for his subsistence
0:5:8: or survival so poverty line is that
0:5:19: income that a person must have in order
0:5:23: to consume minimum level of nutrition
0:5:26: which is essential for his subsistence
0:5:28: like you have you should have that much
0:5:32: amount of money so that you can buy at
0:5:35: least or you can consume a minimum level
0:5:38: of nutrition which is very essential for
0:5:40: your subsistence or survival now in
0:5:46: India if you earn rupees 32 per day you
0:5:56: are not poor that is you are above
0:5:58: poverty line so people who are earning
0:6:1: less than less than 32 rupees so in
0:6:10: India if a person is earning rupees 32
0:6:15: per day he is not poor or he is above
0:6:21: poverty line
0:6:22: so a person who is earning less than 32
0:6:25: rupees per day falls under below poverty
0:6:29: line poverty is widespread in our
0:6:35: country nearly 22 percent of often
0:6:40: is poor when we had attained
0:6:45: independence or during 1950s 50% of the
0:6:49: population was below poverty line and
0:6:51: you imagine half of the population was
0:6:54: not even getting minimum level of
0:6:57: nutrition which was required for
0:6:59: survival and even now 22% of the
0:7:3: population is living below poverty line
0:7:5: which is really sad and then we drop off
0:7:9: poverty in the word context every third
0:7:13: person that you meet is an Indian which
0:7:16: is also quite shameful so we can
0:7:20: conclude that there is widespread
0:7:21: poverty in India which can be measured
0:7:24: with the help of poverty line which is
0:7:27: determined by the income that is
0:7:30: essential for consuming a minimum level
0:7:34: of nutrition which is required for
0:7:36: survival and most important 22% of our
0:7:41: population lives below poverty line and
0:7:45: every third person that you need poor
0:7:49: person that you meet in the world or
0:7:51: every third poor person in the world is
0:7:53: Indian next we talk about population
0:8:3: population has always being a matter of
0:8:8: concern for our country even in 1950s we
0:8:12: were an overpopulated country and the
0:8:15: problem has only multiplied with tongue
0:8:19: why has it multiplied because earlier
0:8:24: the death rate was high because of poor
0:8:28: medical facilities the epidemics we were
0:8:31: spread thousands of people used to die
0:8:33: and they were not proper medical
0:8:36: facilities in the rural sector so due to
0:8:39: lack of proper medical facilities there
0:8:41: were the death rate was high and now
0:8:45: what has happened with time the medical
0:8:48: facilities have improved the death rate
0:8:51: has fallen down
0:8:53: but there has not been a considerate or
0:8:56: corresponding fall in the birth the
0:8:59: birth rate has grown at a rate of around
0:9:3: 2% so you understand when the death rate
0:9:8: is falling less and less people are
0:9:10: dying and the birth rate is increasing
0:9:12: more and more people are being born so
0:9:14: what is going to happen there is going
0:9:16: to be population explosion only so this
0:9:20: is the reason why our country has faced
0:9:22: this problem of overpopulation which if
0:9:26: not control can turn out to be a major
0:9:29: problem because everything in economics
0:9:32: is selected which we will talk about
0:9:34: later
0:9:35: now the next important point that needs
0:9:38: to be taken up in population is that the
0:9:40: dependency ratio is 50 7.5 percent now
0:9:45: what is this dependency ratio the word
0:9:49: itself suggests dependency dependent the
0:9:53: population that is dependent or the
0:9:56: population that is not in a stage of
0:9:59: working like the children and the
0:10:3: elderly
0:10:4: so people who come and below who are
0:10:8: below 15 years of age and what above 64
0:10:12: years of age they are dependent
0:10:14: population they are not working they are
0:10:17: dependent and the rest of the population
0:10:19: is working so the dependency ratio you
0:10:22: can see is very high nearly 50% of the
0:10:25: population or less than 50% of the
0:10:27: population is working and the rest of
0:10:30: the population is not working they are
0:10:32: dependent so what will happen obviously
0:10:34: poverty will also increase as I told you
0:10:37: everything is linked higher population
0:10:40: is a problem the dependency ratio is
0:10:43: higher that is also a problem that the
0:10:45: major population is not working
0:10:48: so population is a problem of a country
0:10:52: and that is why we are we were known as
0:10:55: underdeveloped economies now the fourth
0:11:0: point that we take up is per capita
0:11:3: income
0:11:6: our per capita income is low now before
0:11:17: we understand that per capita income is
0:11:19: low let us understand what per capita
0:11:22: income is all about as the word itself
0:11:27: it is very clear per capita income or
0:11:30: the per person income purpose per capita
0:11:34: income means the average income of an
0:11:37: Indian how do you calculate that the
0:11:42: total income that is incurring in our
0:11:44: country that is the national income
0:11:46: divided by population as an income can
0:11:51: be divided by the number of people we
0:11:53: get that what is going to be the
0:11:55: population of one person average income
0:11:57: so this is per capita income per capita
0:12:1: income is the per person income the
0:12:3: average per person income of an Indian
0:12:6: is slope as you can see why is it low
0:12:9: with this low because the population is
0:12:12: high then the population factor is high
0:12:15: your income is going to be low so let us
0:12:19: understand this with the help of a very
0:12:21: simple example suppose the total income
0:12:24: of a family is fifty thousand and there
0:12:28: are three members in the family so per
0:12:31: person average income comes out to be
0:12:34: nearly sixty thousand fifty thousand
0:12:36: divided by three you get nearly sixteen
0:12:39: thousand you can spend on one person
0:12:41: what kind of life they will be leading a
0:12:44: very good and a happy life now suppose
0:12:47: we increase the number of people in that
0:12:50: family suppose now there are ten members
0:12:52: in that family the average income
0:12:55: automatically comes down to five
0:12:57: thousand so their standard of living
0:12:59: also Falls and if you see it in the
0:13:3: context of Indian economy there are a
0:13:6: hundred people living in that family so
0:13:8: automatically it comes down to five
0:13:10: hundred rupees so the average income has
0:13:13: falled as the population increases your
0:13:16: average income comes down one
0:13:19: second dependency ratio also comes into
0:13:23: play if the population lesser population
0:13:27: is working the income generated will
0:13:29: also be less and you have to distribute
0:13:32: it among people who are not working so
0:13:35: that way is also your natural gum Falls
0:13:37: when the working population is less and
0:13:40: your dependent population is more so
0:13:43: these are the two factors which have led
0:13:45: to the fall off or which are which is
0:13:48: the reason why a per capita income is
0:13:51: low at present the per capita income of
0:13:55: a country is dollar 1499 which is very
0:14:2: less and you compare it to developed
0:14:5: economies like America but even when you
0:14:9: compare it with many developing
0:14:11: economies like Thailand Indonesia even
0:14:14: Sri Lanka and China our per capita
0:14:17: income is low and the major reason for
0:14:20: this is that our population is very high
0:14:24: now per capita income everything as I
0:14:29: told you is associated when a family
0:14:32: earns less it saves lives when it saves
0:14:35: less it invests less and when you invest
0:14:39: less there is less capital formation in
0:14:42: the economy this this is what happens in
0:14:45: the larger context also in the people of
0:14:48: a country and they have low per capita
0:14:49: income their saving capabilities are
0:14:52: also low their investment is also low in
0:14:55: the economy and the capital formation of
0:14:58: the economy is also low which leads to
0:15:1: backwardness or development at a very
0:15:4: slow pace then also you become an
0:15:7: underdeveloped economy next point that
0:15:13: we are going to take up this production
0:15:16: techniques the production techniques in
0:15:20: India are backward or primitive in fact
0:15:24: India is the only country where along
0:15:27: with the modern techniques you have you
0:15:29: we still use primitive methods
0:15:31: especially in the
0:15:32: love agriculture and even in the
0:15:34: industrial sector the technology used is
0:15:37: very backward why so he calls the
0:15:40: capital formation of the countries low
0:15:43: then you do not have enough money to
0:15:46: invest on research and development then
0:15:48: how can you have better techniques of
0:15:50: production you need to invest on these
0:15:53: factors in order to have a better
0:15:55: technique of production and when you
0:15:58: have better technique of production your
0:16:0: productivity increase you will grow and
0:16:3: if you do not have better techniques of
0:16:5: production your deck production video
0:16:7: and automatically you'll do backward
0:16:9: will be in a state of backwardness the
0:16:15: next point that is we have to take up is
0:16:17: very important and very chronic problem
0:16:21: unemployment what is unemployment
0:16:28: unemployment is when people who are
0:16:35: willing and able to work do not have
0:16:47: work they do not have work to do
0:16:51: or they are not employed that is a stage
0:16:53: of unemployment and this is one of the
0:16:57: major problems that our country faces
0:17:0: there are people who are willing and
0:17:2: able to work but they do not have work
0:17:4: they do not have work does not mean that
0:17:7: there is no work for them it is that
0:17:9: don't do not have work like justifies
0:17:12: their ability if a man who is in a
0:17:15: position who's qualified enough to get
0:17:17: 400 EES fifty thousand a month and he is
0:17:20: getting rupees 10,000 a month then he is
0:17:23: considered to be unemployed because you
0:17:25: do not get job opportunities or not
0:17:28: enough to justify your abilities so this
0:17:32: is a problem of unemployment which is
0:17:34: very chronic medium unemployment is
0:17:39: measured in India by an organization
0:17:43: national
0:17:44: s-so National Sample Survey office it
0:17:48: conducts surveys and in the 68 round of
0:17:53: survey that NSSO did in the year 2013
0:17:58: the unemployment rate came out to be
0:18:2: five point six percent five point six
0:18:6: percent means that in thousand number of
0:18:11: people or the labor force fifty six
0:18:15: people are unemployed this is what rate
0:18:19: of unemployment means thousand people
0:18:23: who are working on who are in a position
0:18:27: to work fifty-six people do not get
0:18:29: unemployment as we can see it has come
0:18:33: down in 1990 2000 it was seven point
0:18:36: three one or seventy three percent
0:18:38: seventy three people were unemployed in
0:18:40: 2004 and five then there was recession
0:18:44: in the economy that person number was
0:18:47: eighty two among thousand people eighty
0:18:49: two people who are unemployed so it has
0:18:52: come down but still it is a long way to
0:18:54: go another major problem that Indian
0:18:57: economy faces is is of disguised
0:19:0: unemployment now what is this guy is
0:19:2: unemployment this guy's as the word
0:19:6: itself suggests is you disguise you are
0:19:9: in a different form we cannot recognize
0:19:12: you this is disguise to disguise in a
0:19:15: different so it is this guy's
0:19:17: unemployment is it is there but we
0:19:20: cannot recognize that this is
0:19:21: unemployment to specify or to make this
0:19:26: small here let me give an example
0:19:30: suppose in a farm or order form seven
0:19:34: people are working and they are
0:19:39: producing say 100 kg of rice now if on
0:19:48: the same farm we employ three more
0:19:53: people suppose ten people start working
0:19:55: and the
0:19:57: production remains the same so we will
0:19:59: say now ten people are employed
0:20:1: employment has increased from seven
0:20:3: people but has the productivity
0:20:5: increased no the productivity remains
0:20:7: the same so their contribution is nil or
0:20:11: zero this is disguised unemployment
0:20:14: where it appears that a person is
0:20:16: employed but his contribution in the
0:20:18: productivity is nil and this is rampant
0:20:22: in India especially in the field of
0:20:24: Agriculture where it just appears that
0:20:26: there are too many people working on the
0:20:28: farm
0:20:28: but actually they are not increasing the
0:20:30: productivity they are not having a
0:20:32: positive impact on the productivity this
0:20:35: is disguised unemployment which is a
0:20:38: major challenge Anneka on