Indian banks and their dynamic policies affect the economic system of India the impact is on per capita income, income distribution, dominance of agriculture and impact on industrialization. India is an underdeveloped economy because of the following reasons. The standard of living of people is increasing
Indian banks and their dynamic policies affect the economic system of India the impact is on per capita income, income distribution, dominance of agriculture and impact on industrialization. India is an underdeveloped economy because of the following reasons. The standard of living of people in generally low and the productivity of labor are also considerably low. The problem of unemployment and underemployment is quite high. Agriculture is the main occupation of the people. Poverty is wide spread. Other than that each economy has low participation in foreign trade, their social life is traditional.
India is an underdeveloped economy which is moving towards development. Per capita income level is much low in India as compared with other developed countries. According to world development report India’s per capita income was 530$ in 2003. The per capita income in India is about 1/71 when compared to US. High degree of disparity in income and wealth distribution is found in India. Though the objective of socialistic society was adopted in second five year plan but truly speaking it has not been achieved yet. According to the data shown by NSS 40 % of rural population possesses only 5% of all the rural assets while on the other hand, 8% of the top house hold possesses 46% of the total rural assets. Dominance of agriculture and large population lead a great impact on agriculture.
On the other hand land labor ration is not favorable in India. India is over populated in every decade population get increased by about 24% growth rate. India has not yet achieved the goal of balanced economic development. Savings are low in India due to low national income and high consumption expenditure. India lacks in large industrialization based on modern and advanced technology, which fails to accelerate the pace of development in the economy. Economic vicious circles are still in operation in Indian economy and as a result poverty has become both cause and effect in the counter. Indian economy facers a number of market imperfection like lack of mobility among production factors from one place to the other and lack of specialization which hinder the optimum utilization of available resources. The Indian traditional society is still facing a number of social problems like traditional society is still facing a number of social problems like traditions and customs, malpractices, superstitious etc which adversely affect the process of economic development in the country like India.
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