NABARD ESI Notes – Study Material & PDFs
As we all know The National Bank for Agriculture and Rural Development (NABARD) conducts the NABARD Grade- A (Assistant Manager) exam almost every year. Aspirants preparing for the NABARD Grade- A 2023 must focus on the Economic & Social Issues (ESI) section of the paper as ESI is one subject that is tested in both Phases I & II in the NABARD Grade A exam.
“Features & Nature of Indian Economics” is a very important topic of the Economic & Social Issues (ESI) section, asked under the NABARD Grade-A Exam. In the NABARD Grade A exam, 40 marks are allocated to this section. The section includes topics like Nature and features of Indian Economics. It is important that you prepare NABARD comprehensive notes and build a clear concept of the subject. For that, today, we are providing you with NABARD ESI Notes on – What are the Features & Nature of the Indian Economy? Read on to know all about it.
NABARD ESI Notes 2023 – Features & Nature of Indian Economy
Indian Economy is a subject that includes a wide range of topics starting from the economic condition of British India, Five-year Planning after independence, economic policy, globalization policy, national income, poverty, food security, employment, infrastructure, rural development, and budget, to Microeconomics and Macroeconomics. Indian Economy is an essential part of Social Science that makes us understand the economic functioning and conditions of our country in the context of past, present, and future.
Nature of the Indian Economy
Since independence India has been a ‘Mixed Economy’. India’s large public sectors were responsible for rendering the country a ‘mixed economy’ feature. Indian economy is basically based in the contribution of service sector (currently provides 60% share of GDP) and near about 53% of its population is dependent on the Agriculture. As soon as the time is passing, the share of Agriculture is decreasing and share of service sector is increasing. Currently India is called a developing economy of the world.
A mixed economy relies on free enterprise to drive a country’s financial markets. At the same time, the government dictates federal fiscal and social policy to prevent economic inefficiency and provide general welfare for a country’s citizens. There is no one definition of what a mixed economy is, but in modern western economies, it typically refers to an economic system that marries a profit-motivated, capitalist free market economy and the civic welfare concerns of a socialist economy. Countries like the United States, United Kingdom, Germany, France, Russia, and China currently have mixed economies.
- Mixed economic systems are typically driven by privately-owned, profit-driven economic entities with some degree of public policy intervention from the state to prevent inefficiency, economic collapse, and unemployment. This means that private enterprises have the economic freedom to claim private ownership of the means of production and seek profit, while governments also have the power to institute economic policies and limit or control economic activities.
- Mixed economies also allow the government to intervene in the free market to improve the allocation of resources and promote economic planning, government intervention, and government subsidies in certain fields like mail delivery, libraries, and education.
Characteristics of a Mixed Economy
The important characteristics of mixed economy are as follows:
1. Co-existence of the public and Private Sectors:
The important characteristics of mixed economy are that in this economy both private sector and public sector function together. The heavy industries such as defence equipment, atomic energy, heavy engineering industries etc., come under the control of public sector, on the other hand, the consumer goods, small and cottage industries, agriculture, etc., are assigned to the private sector. The government helps the private sector by providing several facilities, of their development.
2. Economic Welfare:
It is the most important criterion of the success of a mixed economy. Public Sector seeks to avoid regional inequalities, provides large employment opportunities and often its price policy is guided by considerations of economic welfare rather than by profit motive. Private activities are influenced through monetary and fiscal policies to make them contribute to economic welfare of the society at large level.
3. Economic Planning:
In Mixed economy, the Government adopts the instrument of economic planning. This is necessary for the public sector enterprises which have to work according to some plan and to achieve certain pre-determined objectives.
In the same way, the Private Sector cannot be left to develop in its own way. To ensure a co-ordinated and fast economic development the programmes of both the sector are drawn in such a way that growth in one complements the growth in the other.
4. Free and Controlled Economic Development:
The Mixed Economic System considered to be more appropriate to remove the demerits of the capitalist and communist economic systems. Encouragement is given to free economic activities and at the same time steps are also taken to control economic activities.
Features of Indian Economy
1. Gross Domestic Product
India had a GDP of 2.26 lac crore dollars in the year 2016. It showed a healthy growth rate of 7.1%. The World Bank has forecasted a healthy growth rate of 7.3% in the year 2018-19 as well and this augments well for the Indian economy. It is predicted that if the current flow of events continues, by 2028 India will be the third largest economy in the world, overtaking Japan’s economy.
2. Low Per Capita Income
While our GDP is quite healthy, the per capita income of Indians is very low in comparison to other developed economies. One reason is the vast 1.2 billion population of India. For the first time in 2016-17, the per capita income rose above 1 lac, roughly recorded at 1861.50$. To better understand the low levels, the same per capita income in the USA was $ 52,195.
3. The Indian Economy is a Mixed Economy
In the Indian economy, both private sector and public sector companies co-exist in perfect harmony. The big industries, especially those for vast public use, are public sector companies. Some examples are MTNL, Mahanagar Gas etc. And the economy has seen a huge boost in the private sector as well since the liberalization in 1991. Hence India is the perfect example of a mixed economy.
4. Agriculture is the most important sector
It would not be incorrect to call the Indian economy an agricultural-based economy. Agriculture to date employs more than fifty percent of India’s workforce either directly or indirectly. The agricultural sector contributes to some 18% of our GDP. In 2017 it accounted for 12.7% of our total exports as well.
5. Uneven Wealth Distribution
The income and wealth disparity in the Indian economy is one of the worst in the world. According to some reports, the top 1% of the rich population has amassed 53% of the wealth in India. And even with the fast-growing economy, the rich just become richer and the poor stay the same. It is the second worst unequal wealth distribution in the world after Russia.
6. Human Capital
One major advantage of India’s vast population is within the scope of human capital. And most of these human resources are youths. They are educated and skilled, giving India a huge advantage in the global market. They now need adequate employment opportunities to be successful.
7. Immense Growth of the Service Sector
India has one of the fastest-growing service industries in the world. Due to the immense growth in sectors like e-commerce, IT sectors, BPO etc., the service sector of India is booming. It employs nearly 28.6% of the total population and contributes 54% of the GVA.
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