Indian Economy and Development Issues
Indian Economy and Development Issues applies economic ideas to India’s growth, structural change and social development. BIEAP tests planning, liberalisation, poverty, employment, human development and sustainable development.
Core rules
- India adopted Five-Year Plans in 1951; NITI Aayog replaced the Planning Commission in 2015.
- The 1991 reforms introduced liberalisation, privatisation and globalisation (LPG), reducing licensing and opening the economy.
- Structural change involves a falling share of agriculture and rising shares of industry and services in output, though employment shifts more slowly.
- Poverty is measured by income or consumption thresholds; human development uses health, education and income.
- The Human Development Index is a composite of life expectancy, education and per capita income indices.
- MGNREGA (2005) guarantees rural wage employment. Disguised unemployment means more workers than needed on a task.
- Sustainable development meets present needs without compromising future generations.
Worked example
Suppose HDI dimension indices are 0.70 for health, 0.60 for education and 0.50 for income. The HDI is the simple average: (0.70 + 0.60 + 0.50)/3 = 0.60. A country can improve HDI through health, schooling or income, not income alone.
Traps
Do not equate economic growth with development; growth is one dimension. Do not confuse disguised unemployment with open unemployment. Do not treat the service-sector output share as proof that most workers are in services. Planning ended, but NITI Aayog is a policy think tank, not the old Planning Commission.