Q.Analyze critically the characteristics of developing economies with special reference to India.

A developing economy has the resources and potential to grow but still shows low per capita income, over-dependence on agriculture, rapid population growth, poverty, unemployment, inequality, capital shortage and low human development. India displays every one of these features, yet is today one of the world's fastest-growing economies.

Meaning

A developing (or underdeveloped) economy is one in which the actual level of per capita income and living standards is low compared with developed nations, but which possesses unused natural and human resources and is capable of rising growth. India is a leading example and is studied this way in TS Intermediate 2nd-year Economics, whose syllabus aligns closely with the NCERT/CBSE Economics curriculum.

Main characteristics with reference to India

1. Low per capita income: India's per capita income is far below that of developed countries, which keeps savings and the standard of living low.
2. Over-dependence on agriculture: Nearly half the workforce still depends on agriculture, though agriculture contributes a much smaller share of national income, showing disguised unemployment.
3. Rapid population growth: A high rate of population growth eats into the gains of development and raises the dependency burden.
4. Widespread poverty and inequality: A large section lives below or near the poverty line, and income and wealth are very unequally distributed.
5. Unemployment and under-employment: Open, disguised, seasonal and educated unemployment all exist together.
6. Low level of human development: Low literacy, poor health and nutrition keep India's Human Development Index (HDI) rank modest.
7. Capital deficiency and low savings: Low incomes mean low savings and low capital formation, creating a vicious circle of poverty. …