The document discusses several key characteristics of the Indian economy as a developing country including low per capita income, prevalence of unemployment and poverty, low levels of technology, and demographic trends like a large and growing population and rural predominance. It also discusses India's ranking in the UN's Human Development Index and problems associated with high population like poverty, unemployment, and income inequality. Causes, types, and impacts of poverty and unemployment are examined. Measures taken by the government to address unemployment are also outlined.

1. `

2.  The basic characteristics of India as a developing
economy are:
• Low per capita income
• Occupational pattern – primary producing
• Heavy population pressure
• Prevalence of chronic unemployment and under-employment
• Need for a steady improvement in the rate of capital formation
• Inequal distribution of wealth and/or assets
• Poor quality of human capital
• Prevalence of low levels of technology
• Low level of living of an average Indian
• Demographic characteristics of an underdeveloped country

3. Demographic features of Indian economy:
1. Large Size and Fast Growth:
2. Second Stage of Demographic Transition:
3. Rapidly Rising Density:
4. Sex Ratio Composition Unfavourable to Female:
5. Bottom heavy Age Structure
6. Predominance of Rural Population:
7. Low Quality Population:

4. HUMAN DEVELOPMENT INDEX
 The human development index was first used by the Pakistani Economist Mahbub
Ul Haq, in the year 1990.
 It combines indicators of life expectancy, education or access to knowledge and
income
 HDI acts as a measuring tool that helps in gauging socio-economic conditions of
nations every year and also keeps track of the same.
 India 131st rank among 189 countries.
 The HDI is calculated by taking the geometric mean of the life
expectancy, education and income indexes. The geometric mean
for three numbers is calculated by taking the product of the
numbers and finding the cube root.

5. Problems associated with High
Population
Poverty
Unemployment
Inflation
Income inequality

6. Poverty
 Poverty: According to the World Bank, Poverty is pronounced deprivation in well-
being and comprises many dimensions. It includes low incomes and the inability to
acquire the basic goods and services necessary for survival with dignity.
 Poverty Line: The conventional approach to measuring poverty is to specify a
minimum expenditure (or income) required to purchase a basket of goods and
services necessary to satisfy basic human needs and this minimum expenditure is
called the poverty line.
 Poverty Line Basket: The basket of goods and services necessary to satisfy basic
human needs is the Poverty Line Basket (PLB).
 Poverty Ratio: The proportion of the population below the poverty line is called
the poverty ratio or headcount ratio (HCR).
 Out of the total population living in the rural parts of India, 25.7% is living below
the poverty line whereas in the urban areas, the situation is a bit better
with 13.7% of the population living below the poverty line.

7. Causes for Poverty in India
 Demographic
 Economic- poor agricultural infrastructure, Unequal
distribution of assets, Unemployment, inflation and
price hike, faulty economic liberalisation.
 Social- Education and illiteracy, outdated social
customs, lack of skilled labour, Gender inequality,
Corruption, Individual, Political

8. Effects of Poverty
Effect on health
Effects on society: violence and crime
rate, Homelessness, Stress, Child labour,
terrorism
Effect on economy

9. Unemployment
 Unemployment is defined as a situation where there is
existence of people of working age and are able to work but
is not able to get meaningful or gainful job which ultimately
results into huge wastage of manpower resources.
 Unemployment in developed economies is deficiency of
effective demand.
 Unemployment in India is result of shortage of capital
equipment and other resources accompanied by high rate of
growth of population.

11. Unemployment rate in India
• The National Statistical Office (NSO)
data has revealed that the
unemployment rate for the people
above 15 years in urban areas slipped
from 10.3% to 8.7% between October
and December 2021.

12. Types of Unemployment
Demand deficient
Frictional
Structural
Seasonal
Voluntary

13.  1. Demand deficient unemployment
Demand deficit unemployment is the biggest cause of unemployment that typically happens
companies experience a reduction in the demand for their products or services, they respond
production, making it necessary to reduce their workforce within the organization. In effect,
 2. Frictional unemployment
Frictional unemployment refers to those workers who are in between jobs. An example is a
fired and is looking for a job in an economy that is not experiencing a recession. It is not an
usually caused by workers trying to find a job that is most suitable to their skills.
 3. Structural unemployment
Structural unemployment happens when the skills set of a worker does not match the skills
or alternatively when workers are available but are unable to reach the geographical location
4. Seasonal Unemployment:
It occurs when people are unemployed at particular times of the year when demand for
number of job opportunities decreases
 5. Voluntary unemployment
Voluntary unemployment happens when a worker decides to leave a job because it is no
example is a worker whose take-home pay is less than his or her cost of living.

14. Measures taken by the Government
 Employment Guarantee Scheme(EGS) -1972
 Swarna jayanthi Gram Swarozgar Yojana(SGSY)- 1999
 Swarna Jayanthi Shahari Rozgar Yojana(SJSRY)- 1997
 Pradhan Manthri Rozgar Yojana(PMRY)- 1993
 Training Rural Youth for Self Employment(TRYSEM) - 1979
 Jawahar Rozgar Yojana(JRY)- 1989
 Mahatma Gandhi a National Rural Employment Guarantee Scheme
(MGNREG)- 2009
 Deen Dayal Grameen Kausalya yojana - 2014
 National policy for skill Development and Entrepreneurship - 2015
 Start up India Initiative- 2016
 Pradhan Mantri Kaushal Vikas Yojana- 2020

15. Causes of Unemployment
Backwardness in
Agriculture
Insufficient industrial
development
Migration of labour
Emphasis on capital
intensive Technique
Government policy
towards private
sectors
High rate of
Population
Defective educational
System
Slow growth of
Indian economy
Decline of Cottage
and small scale
industries
Caste system and
personal bias
Capital formation

17. Introduction & Meaning
 Inflation is an economic indicator that indicates the rate of rising prices of
goods and services in the economy. Ultimately it shows the decrease in
the buying power of the rupee. It is measured as a percentage.
 This percentage indicates the increase or decrease from the previous
period. Inflation can be a cause of concern as the value of money keeps
decreasing as inflation rises.
• India inflation rate for 2021 was 5.13%, a 1.49% decline from 2020.
• India inflation rate for 2020 was 6.62%, a 2.89% increase from 2019.
• India inflation rate for 2019 was 3.73%, a 0.21% decline from 2018

18. Deflation
• Deflation is the general decline of the price level of goods
and services.
• Deflation is usually associated with a contraction in the
supply of money and credit, but prices can also fall due to
increased productivity and technological improvements.
• Whether the economy, price level, and money supply are
deflating or inflating changes the appeal of different
investment options.

19. Measurement of Inflation in India
Wholesale Price Index
Consumer Price Index
https://rbi.org.in

20. Causes for Inflation
Demand pull
effect
Cost push
effect
Exchange
National Other

21. Types of
Inflation
Creeping Inflation- upto 3%
Chronic Inflation – Consistent without decrease
Walking Inflation- 3% to 10%
Moderate Inflation- Creeping+ Walking <=10%
Running Inflation- 10% to 20%
Galloping Inflation- > 20% <1000%
Hyperinflation- >1000%

22. Causes of Inflation
Demand-pull Inflation: It occurs when the demand for goods or services is higher when compared to the
production capacity. The difference between demand and supply (shortage) result in price appreciation.
Cost-push Inflation: It occurs when the cost of production increases. Increase in prices of the inputs (labour,
raw materials, etc.) increases the price of the product.
Built-in Inflation: Expectation of future inflations results in Built-in Inflation. A rise in prices results in higher
wages to afford the increased cost of living. Therefore, high wages result in increased cost of production,
which in turn has an impact on product pricing. The circle hence continues.

24. India is the sixth wealthiest country in the world with a total wealth of
$8,230 billion, while the US is the richest nation globally, says a
report.
According to the AfrAsia Bank Global Wealth Migration Review, the
US is the wealthiest country in the world with a total wealth of
$62,584 billion, followed by China ($24,803 billion) at the second
place and Japan ($19,522 billion) at the third place

25. Meaning of income inequality

26. Causes for income inequality
The main reasons are the following:
1. Unemployment
2. Inflation
3. Tax Evasion
4. Tax evasion
5. New Agricultural strategy
6. Private Ownership property
7. Private ownership of industries, trade and real estates
8. Menace of parallel economy

27. Consequences of inequality
Inequality stifles growth
Increases crime rate
Decreases health
Economic Inequality Political inequality

28. Measure to reduce Inequalities
1. Promotion of labour intensive Manufacturing
2. More inclusive growth
3. Skill development
4. Progressive Taxation
5. Equal Opportunity for all