Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

Economics Class 11 Short

Notes
(IN JUST 26 PAGES)

Note: these short notes are created from

NCERT Class 11th so that NCERT does
not goes untouched during preparation
of Prelims and Mains.

Today NCERT Plays an important role to

crack UPSC. These short notes are an
endeavour in that field only

Class 11th NCERT (Indian Economic

Development) has total 8 chapters
(NOTE: Some chapters had been omitted in the name of RATIONALISATION)
The INDEX From the Older Version has been included (It does include everything
from the New Rationalised NCERT Too) (Before rationalisation, there were 10
chapters and now there are 8 chapters but we have included all the chapters to
avoid unnecessary omission)

CH 1: INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

CH 2: INDIAN ECONOMY 1950-1990
CH 3: LIBERALISATION, PRIVATISATION AND GLOBALISATION: AN
APPRAISAL
CH 4: POVERTY
CH 5: HUMAN CAPITAL FORMATION IN INDIA
CH 6: RURAL DEVELOPMENT
CH 7: EMPLOYMENT: GROWTH, INFORMALISATION AND OTHER ISSUES
CH 8: INFRASTRUCTURE
CH 9: ENVIRONMENT AND SUSTAINABLE DEVELOPMENT
CH 10: COMPARATIVE DEVELOPMENT EXPERIENCES OF INDIA AND ITS
NEIGHBOURS

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 Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

CH 1: INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

Muslin: A type of cotton textile originated in Bengal (Dhaka → capital of Bangladesh)

● ‘Daccai Muslin’ → gained worldwide fame as an exquisite type of cotton textile.
● Malmal: The finest variety of muslin
British Colonial Rule → sole purpose → to reduce the country to being a feeder economy
for Great Britain’s own rapidly expanding modern industrial base.
● Transforming the country into a net supplier of raw materials and consumer of finished
industrial products from Britain.
National and Per Capita Income Estimates: Individual attempts which were made to
measure such incomes by Dadabhai Naoroji, William Digby, Findlay Shirras, R.C. Desai and
V.K.R.V. Rao (considered most significant)
Agricultural Sector → 85% of the population relied on agriculture for livelihoods.
● Continued to experience stagnation and low productivity due to following reasons:
○ Various systems of land settlement
■ Zamindari system (Bengal Presidency) → Agricultural profits did not
go to cultivators but zamindars.
■ Revenue Settlement → Dates for depositing specified sums of
revenue were fixed, failing which the zamindars were to lose their rights
→ Zamindars focused only on rent collection and neglected agricultural
improvements.
○ Low levels of technology
○ Lack of irrigation facilities
○ Negligible use of fertilisers,
● In absolute terms, the sector experienced some growth due to the expansion of the
aggregate area under cultivation.
● Commercialisation of agriculture → Relatively higher yield of cash crops in certain
areas of the country.
● India’s agriculture was starved of investment in terracing, flood-control, drainage and
desalination of soil.
Industrial Sector → India could not develop a sound industrial base under colonial rule.
● Primary motive behind the policy of systematically de-industrialising India
1. To reduce India to the status of a mere exporter of important raw materials for
the upcoming modern industries in Britain
2. To make India a vast market for British goods, ensuring industrial expansion
benefits.
● Decline of Indigenous Handicrafts
○ Led to massive unemployment in India.
○ Created new demand in the consumer market as local goods supply diminished
which was met by increased imports of cheap manufactured goods from Britain.

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

● Modern industry took root in India → Late 19th Century → Very low progress
○ Cotton textile mills → mostly Indian-owned → Maharashtra and Gujarat.
○ Jute mills → mainly foreign-controlled → Bengal.
○ Iron and Steel Industry → Early 20th century.
■ Tata Iron and Steel Company (TISCO) established in 1907.
○ Sugar, cement, paper industries came up after the Second World War.
○ There was hardly any capital goods industry to help promote further
industrialisation in India.
■ Capital goods industry: Industries which can produce machine tools
which are used for producing articles for current consumption.
● Industrial Growth and GDP/GVA contribution remained small.
● Area of operation of the public sector was very limited → railways, power generation,
communications, ports, etc.
Foreign Trade: Structure, composition and volume was adversely affected by restrictive
policies of commodity production, trade and tariff.
● India became an exporter of primary products and importer of finished goods.
● Suez Canal → 1869 → intensified British control over India’s foreign trade.
○ Location: Isthmus of Suez, northeastern Egypt
■ North Port → Said (Mediterranean Sea)
■ South → Gulf of Suez (Red Sea)
○ Purpose:
■ Direct trade route between European/American ports and ports in South
Asia, East Africa, and Oceania.
■ Eliminates the need to navigate around Africa.
○ Significance:
■ Significantly reduced transportation costs.
■ Facilitated easier access to the Indian market.
● Most important characteristic → generation of a large export surplus.
○ This export surplus did not result in any flow of gold or silver into India.
○ Export surplus funded expenses of offices set up in Britain, expenses on war
fought by Britain and the import of invisible items → drain of Indian wealth.
Demographic Conditions
● First census → 1881 → revealed the unevenness in India’s population growth
● 1921 → India entered the second stage of demographic transition.
● Neither the total population of India nor the rate of population growth at this stage was
very high.
● Overall literacy level < 16% (female literacy level was around 7%)
● Water and air-borne diseases were rampant and took a huge toll on life.
● Infant mortality rate was quite alarming → about 218 per thousand.
● Life expectancy was also very low → 32 years
● Occupational Structure:

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

○ Agriculture sector accounted for the largest share of the workforce.

○ There was the growing regional variation
■ In the Madras Presidency (present-day states of Tamil Nadu, Andhra
Pradesh, Kerala and Karnataka), Maharashtra and West Bengal
reliance on agriculture declined, boosting manufacturing and services
sectors.
■ In Orissa, Rajasthan and Punjab, reliance on agriculture declined.
Infrastructure: Basic infrastructure developed to subserve various colonial interests.
● Roads → Built to mobilise the army within India and draw out raw materials from the
countryside to the nearest railway station or port.
● Railways → Introduced in India in 1850 → one of the most important contributions
○ Affected the structure of the Indian economy in two important ways
■ Enabled people to undertake long distance travel and thereby break
geographical and cultural barriers.
■ Fostered commercialisation of Indian agriculture which adversely
affected the comparative self-sufficiency of the village economies.
○ India’s export trade expanded but its benefits rarely reached Indians.
● Waterways → Proved uneconomical → Coast Canal on the Orissa coast
● Telegraph → Introduced to maintaining law and order
● Postal Services → Despite serving a useful public purpose, remained inadequate.

Ch 2: INDIAN ECONOMY 1950 – 1990

Market economy/Capitalism: Economy in which decisions about production and

distribution are dependent on the market forces of supply and demand.
● Only those consumer goods which are in demand are produced i.e., goods that can be
sold profitably either in the domestic or in the foreign markets.
● Distributed is based on the basis of affordability and are willing to purchase.
Socialist society: Economy in which the government decides what goods are to be
produced in accordance with the needs of society.
● Distribution is based on what people need and not on affordability.
● A socialist society has no private property since everything is owned by the state
Mixed Economy: Economies in which the government and the market together answer the
questions about the production and distribution of goods.
● The market will provide whatever goods and services it can produce well, and the
government will provide essential goods and services which the market fails to do.
Indian Economy: India would be a mixed economy → ‘socialist’ society with a strong public
sector but also with private property and democracy → the government would ‘plan’ the
economy with the private sector being encouraged to be part of the plan effort.
● Reflections of socialism:
○ The ‘Industrial Policy Resolution’ of 1948

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

○ Directive Principles of the Indian Constitution

○ 1950 → Planning Commission was set up (Chairperson → Prime Minister)
Mahalanobis → Architect of Indian Planning
● Established the Indian Statistical Institute (ISI) in Calcutta
● Started a statistical journal → Sankhya
Plan: Spells out as to how the resources should be distributed in the country.
Perspective plan → Specified what is to be achieved over a period of 20 years.
● Abolished in 2017
● The five-year plans were supposed to provide the basis for the perspective plan.
Five-year Plans → Borrowed from former Soviet Union
● Goals → All the plans have given equal importance to all these goals.
○ Growth: Increase in capacity to produce goods and services within country.
■ Implication → Increase in the efficiency and size of productive capital
and services like transportation and banking.
■ Indicator → GDP → market value of all the goods and services
produced in the country during a year.
■ Structural composition of the economy: Contribution made by each
sector of the economy.
○ Modernisation: Adoption of new technology to increase output and changes
in social outlook.
○ Self-reliance: Avoiding imports of locally producible goods to reduce
dependency on foreign resources, especially for food, technology and capital
to protect India's sovereignty from potential external influence.
■ The first seven five year plans gave more importance to self-reliance
○ Equity: Ensure that benefits of economic prosperity reach the poor sections.
■ Every Indian should be able to meet his or her basic needs
■ Inequality in the distribution of wealth should be reduced.
Agriculture → Facing the problem of growth and equity solved by following measures:
● Land Reforms: Change in the ownership of landholdings.
○ Steps were taken to abolish intermediaries and to make the tillers the owners
of land → to give incentives to tillers to invest in making improvements provided
sufficient capital was made available to them.
○ Land ceiling: Fixing the maximum size of land which could be owned by an
individual → to reduce the concentration of land ownership in a few hands.
○ Failures → Zamindars continued to own large areas of land using loopholes in
legislation
■ Tenants were evicted and landowners claimed to be self-cultivators.
■ Big landlords delayed legislation by challenging it in courts, using the
time to transfer lands to relatives and evade rules.
○ Success → Kerala and West Bengal

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

● Green Revolution → Shifted stagnation through large increase in food grains

production using high yielding variety (HYV) seeds, especially for wheat and rice.
○ 1st phase (mid 1960s- mid1970s)
■ The use of HYV seeds was restricted to the more affluent states such
as Punjab, Andhra Pradesh and Tamil Nadu.
■ Use of HYV seeds proved beneficial for wheat-growing regions only.
○ 2nd Phase (mid-1970s to mid-1980s)
■ HYV technology spread to a larger number of states
■ Benefited more variety of crops
■ Enabled India to achieve self-sufficiency in food grains
○ Marketed surplus: The portion of agricultural produce which is sold in the
market by the farmers → increase growth in agricultural output.
■ Farmers sold surplus rice and wheat → a decline in food grain prices.
○ Government procured sufficient amount of food grains to build a stock which
could be used in times of food shortage.
○ Risks involved and solution opted by Indian government
■ Possibility of growing disparities between small and big farmers as only
the big farmers could afford the required inputs → loans at a low interest
rate and subsidised fertilisers were provided to small farmers
■ HYV crops were more prone to attack by pests → minimised with the
services rendered by government established research institutes.
● Between 1950 and 1990: The proportion of GDP contributed by agriculture declined
significantly but not the population depending on it → the industrial sector and the
service sector did not absorb the people working in the agricultural sector.
Industry → 2nd Five year plan → The government would control vital industries, requiring
private sector policies to be complementary with public sector goals.
● Private sector lacked capital to invest in developmental industrial ventures.
● Small market discouraged industrialists to undertake major projects.
● Basis → Industrial Policy Resolution (IPR), 1956
○ Built the basis for a socialist pattern of the society.
○ Classification of Industries → 3 categories
1. Exclusively state owned industries.
2. Industries in which the private sector could supplement the efforts of the state
sector, with the state taking the sole responsibility for starting new units.
3. Private sector industries → State control through a system of licences
a. Licence was required for new industry → To promote regional equality
● It was easier to obtain a licence if the industrial unit was
established in an economically backward area
● Industries in backward areas were given certain concessions
such as tax benefits and electricity at a lower tariff.

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

b. Licence was required for expanding output or diversifying production

(producing a new variety of goods) → to ensure that quantity of goods
produced was not more than requirement of economy.
● Small-scale Industry: Defined with reference to the maximum investment allowed on
the assets of a unit → at present the maximum investment allowed is 1 crore.
■ Karve Committee (1955) → Suggested possibility of using small-scale
industries for promoting rural development.
■ More ‘labour intensive’ → generate more employment
■ Inability to compete with bigger firms → reservation of a certain number
of products for the small-scale industry
■ Were given concessions → lower excise duty and interest rates
Trade → Import Substitution Strategy → 1st to 7th FYPs
● Aimed at replacing or substituting imports with domestic production
● Protection from imports take two forms
1. Tariffs: Tax on imported goods; they make imported goods more expensive
and discourage their use.
2. Quotas: Specify the quantity of goods which can be imported.
● Developing industries were protected to grow competitive over time against more
established global economies’ products.
● There was possibility of foreign exchange being spent on import of luxury goods if no
restrictions were placed on imports
● Hardly any promotion of exports until the mid-1980s
Effect of Policies on Industrial Development
○ Rise in the industry’s share of GDP → important indicator of development.
○ Witnessed 6% annual growth rate of the industrial sector
○ Diversification of the Indian industries was ensured
○ Small-scale industry promotion allowed people without large capital to start
businesses
○ Protection from foreign competition fostered growth in indigenous electronics
and automobile industries otherwise impossible.
Structural change: At higher levels of development, the service sector contributes more to
the GDP than the other two sectors.
Prices as Signals: Supply ↓ → price ↑
● Subsidies do not allow prices to indicate the supply of a good.

CH 3: LIBERALISATION, PRIVATISATION AND GLOBALISATION: AN

APPRAISAL
India’s Economic Crisis,1991 → related to external debt
● Government was not able to make repayments on its borrowings from abroad
● Forex reserves dropped to levels that were not sufficient for even a fortnight
● The crisis was further compounded by rising prices of essential goods.

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

● Background
○ Development policies required the Government to overspend to tackle
unemployment, poverty, and population growth, which didn’t yield revenue.
○ Insufficient revenue was generated from internal sources like taxation.
○ PSU’s income was insufficient to cover the government's rising expenses.
○ Forex borrowed was spent on meeting consumption needs.
○ By the 1980s, expenditure far exceeded revenue, leading to unsustainability.
○ Prices of any essential goods rose sharply.
○ Imports grew at a very high rate without matching growth of exports
○ There was insufficient foreign exchange to pay interest on international debt.
● Support from World Bank and IMF: Received $7 billion as loan to manage the crisis.
○ India was required to liberalise and open its economy to avail loans.
○ India agreed to the conditionalities and announced the New Economic Policy.

Another name of World Bank → International Bank for Reconstruction and Development
(IBRD)
IMF → International Monetary Fund
New Economic Policy (NEP), 1991: The policies aimed to foster a competitive economy
by removing barriers from entry and growth of firms.
● This set of policies can broadly be classified into two groups:
○ Stabilisation Measures: Short-term measures aimed to address balance of
payments issues by maintaining sufficient forex reserves and to control rising
inflation effectively.
○ Structural Reform Measures: Long-term measures, aimed at improving the
efficiency of the economy and increasing its international competitiveness by
removing the rigidities in various segments of the economy.
○ The government initiated a variety of policies which fall under three heads viz.,
liberalisation, privatisation and globalisation.
Liberalisation:
● Measures introduced in 1980s → Industrial licensing, export import policy, technology
upgradation, fiscal policy and foreign investment.
● Reform policies initiated in 1991
○ Deregulation of Industrial Sector:
■ Industrial licensing required to start or close a firm or to determine
production was abolished for almost all product categories except
alcohol, cigarettes, hazardous chemicals, industrial explosives,
electronics, aerospace and drugs and pharmaceuticals.
■ Private sector was allowed in all areas except defence equipment,
atomic energy generation and railway transport.
■ Many goods produced by small scale industries were dereserved.
■ In many industries, market has been allowed to determine the prices.

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

○ Financial Sector: Includes financial institutions such as commercial banks,

investment banks, stock exchange operations and foreign exchange markets.
■ Controlled in India by the Reserve Bank of India (RBI) through reserve
ratios, fixed interest rates, nature of lending, etc.
■ Reforms
● Role of RBI was reduced from regulator to facilitator.
● Establishment of private sector banks, Indian and foreign.
● Foreign investment limit in banks was raised to around 74%.
● Banks meeting specific criteria were allowed new branches and
adjust networks without RBI approval.
● Though banks were allowed to generate resources from India
and abroad, certain aspects were retained with the RBI to
safeguard the interests of the account-holders and the nation.
● Foreign Institutional Investors (FIIs) such as merchant bankers,
mutual funds and pension funds were allowed to invest in Indian
financial markets
○ Tax Reforms: Reforms in government’s taxation and public expenditure
policies which are collectively known as its fiscal policy.
■ There are two types of taxes
1. Direct taxes: Taxes on incomes of individuals as well as profits of
business enterprises.
2. Indirect taxes: Taxes levied on commodities.
■ Reforms
▪ Continuous reduction in income taxes to prevent tax evasion. ➔
Moderate rates of income tax encourage savings and voluntary
disclosure of income.
▪ Corporation tax (very high earlier) has been gradually reduced.
▪ Indirect taxes were reformed to facilitate the establishment of a
common national market for goods and commodities.
• In 2016, GST was introduced, aimed at boosting revenue,
reducing tax evasion, and creating a unified tax system.➔
Procedures were simplified to encourage compliance.
○ Foreign Exchange Reforms:
■ Rupee was devalued to resolve the BOP crisis.
■ This led to an increase in the inflow of foreign exchange.
■ Forex rate determination was freed from government’s control →
Markets determine exchange rates based on the demand and supply of
foreign exchange.
○ Trade and Investment Policy Reforms:
■ Import licensing was abolished except in case of hazardous and
environmentally sensitive industries.

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

■ Quantitative restrictions on imports of manufactured consumer goods

and agricultural products were also fully removed from April 2001.
■ Export duties have been removed to increase the competitive position
of Indian goods in the international markets.
■ Aims
● To increase international competitiveness of industrial
production, foreign investments and technology.
● To promote the efficiency of the local industries and the adoption
of modern technologies.
● Dismantling of quantitative restrictions on imports and exports
● Reduction of tariff rates
● Removal of licensing procedures for imports
Privatisation: Shedding of the ownership or management of a government enterprise.
● Government companies can be converted into private companies in two ways:
1. By withdrawal of the government from ownership and management of PSUs.
2. By outright sale of public sector companies.
● Disinvestment: Privatisation of PSUs by selling off part of the equity to the public.
○ Purpose → to improve financial discipline and facilitate modernisation.
● Government envisaged that privatisation could boost the inflow of FDI.
● It was also envisaged that private capital and managerial capabilities could be
effectively utilised to improve the performance of the PSUs.
● Government declared some PSUs as maharatnas, navratnas and miniratnas which
were given greater managerial and operational autonomy to enhance their profits,
efficiency, professionalism and competitiveness.

Navratnas → Nine Jewels in the Imperial Court of King Vikramaditya who were
eminent persons of excellence in the fields of art, literature and knowledge.
Globalisation: Integration of the economy of the country with the world economy.
● It aims to create an integrated and interdependent world linked by networks and
activities beyond economic, social, and geographical boundaries.
● Outcome of the policies of liberalisation and privatisation.
● Outsourcing: Company hires regular service from external sources.
○ Has intensified, in recent times, due to growth of fast modes of communication,
particularly Information Technology (IT).
● World Trade Organisation (WTO) → founded in 1995 as the successor to GATT.
○ General Agreement on Trade and Tariff (GATT) → established in 1948 with
23 countries to administer all multilateral trade agreements by providing equal
market access to all countries.
○ Expected to establish a rule-based trading regime in which nations cannot
place arbitrary restrictions on trade.
○ Ensure production and trade of services, to ensure optimum utilisation of world
resources and to protect the environment

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

○ WTO agreements cover trade in goods and services to facilitate international

trade (bilateral and multilateral) through removal of tariff and non-tariff barriers
and providing greater market access to all member countries.
Assessment of economic reforms
● Growth and Employment → GDP growth rate has increased but sufficient
employment opportunities have not been generated in the country.
● Agriculture sector → Growth rate has been decelerating.
○ Public investment in infrastructure, which includes irrigation, power, roads,
market linkages and research and extension has been reduced.
○ Partial removal of fertiliser subsidy has led to increase in the cost of production
has severely affected the small and marginal farmers.
○ Policy changes such as lifting of import barriers on import of agricultural
products, low minimum support price,etc. have adversely affected Indian
farmers due to increased international competition.
○ Export-oriented policy strategies has shifted focus on production cash crops
from production of food grains → pressure on prices of food grains.
● Industrial sector → Recorded a slowdown due to decreasing demand because of
cheaper imports, inadequate investment in infrastructure etc.
● Disinvestment → Every year government fixes a target for disinvestment of PSUs.
○ Assets of PSUs have been undervalued leading to substantial loss.
○ Disinvestment proceeds were used to cover revenue shortfalls instead of
developing PSUs or social infrastructure.
● Fiscal Policies → Economic reforms have placed limits on the growth of public
expenditure especially in social sectors.
○ The tax reductions aimed at yielding larger revenue and to curb tax evasion
have not resulted in increase in tax revenue.
○ Tariff reduction limited scope for raising revenue through custom duties.
○ Tax incentives provided to foreign investors to attract foreign investment
reduced the scope for raising tax revenues.
○ This has a negative impact on developmental and welfare expenditures.

CHAPTER 4: POVERTY
Background
● In pre-independent India, Dadabhai Naoroji was the first to discuss the concept of a
Poverty Line.
○ The weighted average of consumption of the three segments gives the average
poverty line, which comes out to be three-fourth of the adult jail cost of living
● In 1962, the Planning Commission formed a Study Group to find number of poors.
● Task Force on Projections of Minimum Needs and Effective Consumption
Demand → Formed in 1979 to estimate poverty
Poverty: Inability to fulfil the minimum requirements of life.

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

Chronic poor: Those who are always poor and those who are usually poor
● Example: Casual workers.
Transient Poor: Those who are moving in and out of poverty and occasionally poor.
● Churning poor: Those who regularly move in and out of poverty
○ Example: small farmers and seasonal workers
● Occasionally poor: Those who are rich most of the time but may sometimes have a
patch of bad luck
Never Poor: These are categorised as non-poor people.
Poverty Line: Monetary value (per capita expenditure) of the minimum calorie intake that
was estimated at 2,400 calories for a rural person and 2,100 for a person in the urban area.
Sen Index → Developed by Amartya Sen (Nobel Laureate)
Head Count Ratio: When the number of poor is estimated as the proportion of people below
the poverty line
Official data on poverty → made available to the public by the Planning Commission.
● It is estimated on the basis of consumption expenditure data collected by the National
Sample Survey Organisation (NSSO).
Causes of Poverty
● Social, economic and political ● Low capital formation
inequality ● Lack of infrastructure
● Social exclusion ● Lack of demand
● Unemployment ● Pressure of population
● Indebtedness ● Lack of social/welfare nets.
● Unequal distribution of wealth
Approaches to reduce Poverty
1. Growth oriented development: The effects of economic growth — rapid increase in
gross domestic product and per capita income — would spread to all sections of
society and trickle down to the poor sections also.
2. Specific poverty alleviation programmes: Expanding self employment programmes
and wage employment programmes are being considered as the major ways of
addressing poverty.
○ Rural Employment Generation Programme (REGP): Aims at creating self
employment opportunities in rural areas and small towns.
■ The Khadi and Village Industries Commission is implementing it.
■ One can get financial assistance in the form of bank loans to set up
small industries.
○ Prime Minister’s Rozgar Yojana (PMRY): The educated unemployed from
low income families in rural and urban areas can get financial help to set up
any kind of enterprise that generates employment.

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Economy Short Notes - Neelesh Kumar Singh (AIR 442 UPSC CSE 2021)

○ Swarna Jayanti Shahari Rozgar Yojana (SJSRY): Aims at creating

employment opportunities in urban areas (both self-employment and wage
employment).
○ Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA),
2005: Provide guaranteed wage employment to every household whose adult
volunteer is to do unskilled manual work for a minimum of 100 days in a year.
3. Meeting the minimum needs of the poor: to provide minimum basic amenities to the
people.
○ Social Assistance Programme: Elderly people, poor destitute women and
widows who do not have anyone to take care of them are given pension to
sustain themselves.

CH 5: HUMAN CAPITAL FORMATION

Sources of Human Capital
● Investment in education → Increase future Income
● Investment in health → Increase the supply of healthy labour force.
○ Sick labourer → abstain from work → loss of productivity
○ Forms of health expenditure
■ Expenditure on preventive medicine (vaccination)
■ Expenditure on curative medicine (medical intervention during illness)
■ Expenditure on social medicine (spread of health literacy)
■ Expenditure on provision of clean drinking water and good sanitation
● On-the-job training → Enhanced labour productivity
○ Forms
■ On campus training under the supervision of a skilled worker
■ Off-campus training under supervision of professionals.
● Migration → Enhanced earnings
● Information → Necessary to make decisions regarding investments in human capital
as well as for efficient utilisation of the acquired human capital stock.
Physical capital and Human Capital
● Similarities
○ Capital formation of both are outcomes of conscious investment decisions.
○ Both forms of capital depreciate with time
● Differences

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Human capital Physical capital

Formation is a social and conscious process. Formation is mainly an economic and

technical process.

Intangible: not sold in the market; only the services Tangible: can be easily sold in the market.
of the human capital are sold.

Inseparable from its owner. Separable from its owner.

Not perfectly mobile between countries as movement Completely mobile between countries except
is restricted by nationality and culture for some artificial trade restrictions

Formation is to be done through conscious policy Formation can be built even through imports
formulations in consonance with the nature of the
society and economy and public or private
expenditure.

Depreciation takes place with ageing but can be Continuous leads to depreciation and change
reduced through continuous investment in education, of technology makes it obsolete.
health, etc. which also facilitates coping with change
in technology.

External benefit: Benefits not only the owner but also Private benefit: Benefits flow to those who
the society in general. pay the price for it.

Economic Growth: Increase in real national income of a country.

● Educated individuals contribute more to economic growth than illiterate ones.
○ Educated person generates more income than the illiterate.
○ Education provides knowledge to understand changes in society and scientific
advancements, thus, facilitate inventions and innovations.
○ Availability of educated labour force facilitates adaptation to new technologies.
● Causality between human capital and economic growth flows in either directions
○ Higher income causes the building of high level of human capital.
○ High level of human capital causes growth of income.
● 7th FYP → A large population when trained and educated become an asset in
accelerating economic growth and in ensuring desired social change.
The National Education Policy 2020
● Rapid change in knowledge landscape → many unskilled jobs may be replaced by
machines, while the demand for a skilled workforce will be increased.
● Climate Change and Environmental deterioration → sizeable shift in how we meet the
world’s needs → need for new skilled labour.
● Epidemics and pandemics → Social issues → heightens the need for multidisciplinary
learning
Human Development and Human Capital:
● Differences

Human Development Human Capital

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Considers education and health as integral to Considers education and health as a

human well-being as it helps in making other means to increase labour productivity.
valuable choices.

Treats human beings as ends in themselves. Treats human beings as a means to an

end — increase in productivity.
State Of Human Capital Formation In India
● Expenditures on both education and health are to be carried out simultaneously by all
the three tiers of the government.
● National Council of Educational Research and Training (NCERT), University
Grants Commission (UGC) and All India Council of Technical Education (AICTE)
facilitate institutions which come under the education sector.
● National Medical Commission and Indian Council for Medical Research (ICMR)
facilitate institutions which come under the health sector
Growth in Government Expenditure on Education → expressed in 2 ways
1. As a percentage of ‘total government expenditure’ → indicates the importance of
education in the scheme of government.
2. As a percentage of GDP → expresses how much of people’s income is being
committed to the development of education.
● Share of total education expenditure
○ Elementary education → major
○ higher/tertiary education → least.
● ‘Expenditure per student’ → tertiary education > elementary education
● The Education Commission (1964–66) → at least 6 % of GDP be spent on education
to make a noticeable rate of growth in educational achievements.
● 86th Amendment, 2002 → Made free and compulsory education a fundamental right
of all children in the age group of 6-14 years.
● Government of India has started levying an ‘education cess’ on all Union taxes.
● Educational Achievements in India → Indicators
○ Adult literacy level
○ Primary education completion rate
○ Youth literacy rate
● Indian education pyramid is steep → lesser and lesser number of people reaching
the higher education level
● Unemployment among educated youth is the highest.

CH 6: RURAL DEVELOPMENT
Rural Development: Development of areas that are lagging behind in the overall
development of the village economy.
● Challenging areas which need fresh initiatives for development in rural India
○ Development of human resources
■ Literacy → female literacy, education and skill development

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■ Health → sanitation and public health

○ Land reforms
○ Development of the productive resources of each locality
○ Infrastructure development → electricity, irrigation, credit, marketing,
transport facilities, facilities for agriculture research and extension, and
information dissemination
○ Special poverty alleviation measures → access to productive employment
opportunities
● Provide rural workers resources and tools to boost productivity and growth.
● Provide opportunities to diversify into various non-farm productive activities such as
food processing.
● Provide better and more affordable access to healthcare and sanitation facilities at
workplaces and homes
● Education for all would also need to be given top priority for rapid rural development.
Credit and Marketing in Rural Areas
● Growth of rural economy depends primarily on infusion of capital periodically to realise
higher productivity in agriculture and non-agriculture sectors.
● In 1969,India adopted social banking and multi agency approach to adequately meet
the needs of rural credit.
● National Bank for Agriculture and Rural Development (NABARD) → set up in 1982
→ Apex body to coordinate the activities of all institutions involved in the rural financing
system.
● Green Revolution → led to the diversification of the portfolio of rural credit towards
production oriented lending.
● Institutional structure of rural banking → multi-agency institutions → commercial
banks, regional rural banks (RRBs), cooperatives and land development banks
expected to dispense adequate credit at cheaper rates.
● SHGs: Emerged to fill the gap in the formal credit system
○ Promote thrift in small proportions by a minimum contribution from each
member
○ From the pooled money, credit is given to the needy members to be repayable
in small instalments at reasonable interest rates
● Micro-credit programmes: Renovating fund provided to take up self
employment → Community Investment Support Fund (CISF)
● Helped in the empowerment of women
● Borrowings are mainly confined to consumption purposes and negligible
proportion is borrowed for agricultural purposes.
● Kudumbashree: Women-oriented community-based poverty reduction
programme → Kerala.

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○ In 1995, a thrift and credit society was started as a small savings bank
for poor women with the objective to encourage savings and mobilised
Rs 1 crore as thrift savings.
○ Thrift and credit societies → largest informal banks in Asia in terms
of participation and savings mobilised.
Deposit mobilisation — lending to worthwhile borrowers and effective loan recovery.
Jan Dhan Yojana
● All the adults are encouraged to open bank accounts.
● Bank account holders can get Rs. 1-2 lakh accidental insurance coverage
● Overdraft facilities for Rs. 10,000 can be availed
● Wages and social security payments of the government are transferred to bank
accounts.
● No need to keep minimum bank balance
Agricultural Marketing: Process that involves the assembling, storage, processing,
transportation, packaging, grading and distribution of different agricultural commodities across
the country.
● Measures initiated to improve the marketing aspect
○ Regulation of markets to create orderly and transparent marketing conditions.
○ Provision of physical infrastructure facilities like roads, railways, warehouses,
godowns, cold storages and processing units.
○ Cooperative marketing, in realising fair prices for farmers’ products,
○ Policy instruments
■ Assurance of minimum support prices (MSP) for agricultural products
■ Maintenance of buffer stocks of wheat and rice by Food Corporation of
India
■ Distribution of food grains and sugar through PDS.
● Emerging Alternate Marketing Channels → If farmers directly sell their produce to
consumers, it increases their income.
○ Apni Mandi → Punjab, Haryana and Rajasthan
○ Hadaspar Mandi → Pune
○ Rythu Bazars (vegetable and fruit markets) → Andhra Pradesh and
Telangana
○ Uzhavar Sandies → Tamil Nadu
○ National and multinational fast food chains are entering in contracts with
farmers to cultivate farm products of the desired quality by providing them
seeds,inputs and assured procurement of the produce at pre decided prices
Diversification: Includes two aspects
1. Diversification of crop production
2. Shift of workforce from agriculture to allied and non-agriculture sectors.
● Reduce the risk from agriculture sector
● Provide productive sustainable livelihood options to rural people.

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● Provide supplementary gainful employment → seasonal nature of agriculture

● Provide higher levels of income for rural people to overcome poverty.
● Alternate employment opportunities → overcrowdedness in agriculture
Tamil Nadu Women in Agriculture (TANWA) → Project initiated in the late 1980s to
train women in latest agricultural techniques and in organic farming.
● Encouraged women to actively participate in raising agricultural productivity and family
income.
Animal Husbandry → In India, mixed crop-livestock farming system is prevalent.
● Provides increased stability in income, food security, transport, fuel and nutrition for
the family without disrupting other food-producing activities.
● Poultry → largest share → 51.44%.
● Operation Flood: System whereby all the farmers can pool their milk produced
according to different grading (based on quality), processed and marketed to urban
centres through cooperatives,
○ Farmers are assured of a fair price and income.
● Major milk producing states → Gujarat, Madhya Pradesh, Uttar Pradesh, Andhra
Pradesh, Maharashtra, Punjab and Rajasthan.
Fisheries
● Fsh production from inland sources → 70% of the total value of fish production
● Total fish production → 1% of the total GDP.
● Major fish producing states → West Bengal, Andhra Pradesh, Kerala, Gujarat,
Maharashtra and Tamil Nadu
● Major problems
○ Rampant underemployment
○ Low per capita earnings
○ Absence of mobility of labour to other sectors
○ High rate of illiteracy and indebtedness
Horticulture: Cultivation of fruits, vegetables, tuber crops, flowers, medicinal and aromatic
plants, spices and plantation crops.
● Contribution in India → 1/3rd of the value of agriculture output
● India → second largest producer of fruits and vegetables
○ World leader → mangoes, bananas, coconuts, cashew nuts and spices.
Role of IT in Rural development
● Governments can predict areas of food insecurity and vulnerability using appropriate
information and software tools → to prevent the likelihood of an emergency
● Can disseminate information regarding emerging technologies and its applications,
prices, weather and soil conditions for growing different crops.
● Can help in releasing the creative potential and knowledge embedded in the society.
● Has potential for employment generation in rural areas.

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Saansad Adarsh Gram Yojana (SAGY), 2014

● MPs need to identify and develop one village from their constituencies.
● Village can have a population of 3,000-5,000 in plains and 1,000-3,000 in hills.
● Should not be MPs' own or their spouse's village.
● MPs are expected to facilitate a village development plan, motivate villagers to take up
activities and built infrastructure in the areas of health, nutrition and education.
Organic Farming: Whole system of farming that restores, maintains and enhances the
ecological balance.
● Organic foods command higher price → 10-100% more than conventional ones.
● Green status → given to retail chains and supermarkets to sell organic food.
● Benefits
○ Substitute costlier agricultural inputs with locally produced organic inputs that
are cheaper → generate good returns on investment.
○ Generates income through exports.
○ Has more nutritional value than chemical farming.
○ Requires more labour input → attractive proposition for India.
○ Produce is pesticide-free and produced in environmentally sustainable way.
● Shortcomings
○ Yields from organic farming are less than modern agricultural farming in the
initial years.
○ Have more blemishes and a shorter shelf life than sprayed produce.
○ Choice in production of off-season crops is quite limited in organic farming.

CH 7: EMPLOYMENT: GROWTH, INFORMALISATION AND OTHER

ISSUES
Economic Activities: Activities which contribute to the gross national product.
Workers: All those who are engaged in economic activities, in whatever capacity.
● Rural Workers → ⅔ of the total workforce.
● Men → 78.3% of the total workforce.
● Women → More participation in workforce in rural areas than urban areas.
Worker-population ratio: Indicator used for analysing the employment situation in country.
● (Total number of workers ÷ population) × 100
● Indicates the proportion of population actively contributing to a country's production.
● A higher ratio indicates greater workforce engagement; lower ratios suggest less
population involvement in economic activities.
● Primary sector is the main source of employment for majority of workers.
Population: Total no. of people residing in a particular locality at a particular point of time.
Status of worker in an enterprise → quality of employment in a country.
● Indicates attachment a worker has with his or her job.
● Indicates authority worker has over the enterprise and over other co-workers.

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● Self-employed: Workers who own and operate an enterprise to earn their livelihood.
● Casual wage labourers: Work casually and get a remuneration for the work done.
● Regular salaried employees: When a worker is engaged by someone or an
enterprise and paid his or her wages on a regular basis.
● Self-employment → major source of livelihood for both men and women → accounts
for more than 50 per cent of the workforce.
● Casual wage work → second major source for both men and women.
● Self employed and casual wage labourers → rural areas > urban areas
3 Sectors and 8 Industrial Divisions of Economy
● Primary sector
▪ Agriculture
▪ Mining and Quarrying
● Secondary Sector
▪ Manufacturing
▪ Construction
▪ Electricity, Gas and Water Supply
● Tertiary Sector
▪ Trade
▪ Transport and Storage
▪ Servicess
Jobless Growth: Increase in total output of an economy (GDP) without generating enough
employment opportunities.
Casualisation of workforce: Process of moving from self-employment and regular
salaried employment to casual wage work → noticed during 1972-94.
Formal Sector Establishment: All the public sector establishments and those private
sector establishments which employ 10 hired workers or more.
● The information relating to employment in formal sector is collected by Union Ministry
of Labour through employment exchanges located in different parts of the country.
● Only 9.7% of the total workforce is employed in the formal sector.
Unemployment
● National Statistical Office → Unemployment is a situation in which all those who,
owing to lack of work, are not working but either seek work through employment
exchanges, intermediaries, friends or relatives or by making applications to
prospective employers or express their willingness or availability for work under the
prevailing condition of work and remunerations.
● Economists → Unemployed person is one who is not able to get employment for even
one hour in half a day.
● Types of unemployment
○ Open unemployment
○ Disguised unemployment
○ Seasonal unemployment

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● Sources of Data on Unemployment:

1. Reports of Census of India
2. National Sample Survey Organisation’s Reports of Employment and
Unemployment Situation
3. Annual Reports of Periodic Labour Force Survey
4. Directorate General of Employment and Training Data of Registration with
Employment Exchanges.
Mahatma Gandhi National Rural Employment Guarantee Act 2005 → Promises 100
days of guaranteed wage employment to all rural households who volunteer to do unskilled
manual work.
Direct employment generation by government: Government directly provides
employment to people in various departments for various purposes or through employment
generation programmes.
Indirect employment generation by government : When the increase in output from
government enterprises increases, raise output of private enterprises and hence increase the
number of employment opportunities in the economy.

CH8: INFRASTRUCTURE
Kerala → popularly known as ‘God’s own country’.
Infrastructure: Provides supporting services in the main areas of industrial and agricultural
production, domestic and foreign trade and commerce.
Morbidity: Proneness to fall ill.
Types of Infrastructure
1. Economic Infrastructure: Infrastructure associated with energy, transportation and
communication.
2. Social Infrastructure: Infrastructure related to education, health and housing.
Importance of Infrastructure
1. Raises on Productivity 4. Facilitates Outsourcing
2. Raises Size of the Market 5. Generates Linkages in Production
3. Raises Ability to Work
The State of Infrastructure in India
● India invests 3.3% percent of its GDP on infrastructure, which is far below that of China
and Indonesia.
● As income rises, infrastructure needs shift from basics like irrigation, transport, and
power in low-income countries to more service-oriented needs such as
telecommunications which dominate in high-income economies.
Energy → Life line of entire production activity.
● Sources of Energy:
○ Conventional sources of energy: These are the energy sources which are
popularly in use for a very long time. These are of two types:

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■ Commercial sources: They are bought and sold → coal, petroleum and
electricity → Generally exhaustible (with the exception of hydropower).
■ Non-commercial sources: They are found in nature/forests → firewood
agricultural waste and dried dung → Generally renewable.
○ Non-conventional sources of energy: These are the energy which have been
discovered or explored in the recent past.
● Power/Electricity
○ The most visible form of energy, which is often identified with progress in
modern civilization.
○ The growth rate of demand for power is generally higher than the GDP growth
rate.
○ India’s energy policy encourages two energy sources— hydel and wind —as
they do not rely on fossil fuel and, hence, avoid carbon emissions.
○ Some Challenges in the Power Sector
■ India's installed capacity to generate electricity is not sufficient to feed
the annual economic growth. Even the installed capacity is
underutilised.
■ State Electricity Boards (SEBs) which distribute electricity incur loss
due to transmission and loss in distribution, wrong pricing of electricity
and other inefficiencies.
■ Private sector power generators are yet to play their role in a major way,
same is the case with foreign investors.
■ There is general public unrest due to high power tariffs and prolonged
power cuts in different parts of the country.
■ Thermal power plants which are the mainstay of India's power sector,
are facing shortage of raw material and coal supplies.
Health: It is a state of complete physical, mental & social well-being.
● State of Health Infrastructure
○ The Union Government evolves broad policies and plans through the Central
Council of Health and Family Welfare.
○ At the village level, a variety of hospitals known as Primary Health Centres
(PHCs) have been set up.
○ There are large number of hospitals run by voluntary agencies and the private
sector, equipped with professionals and para medical professionals trained in
medical, pharmacy and nursing colleges.
○ About 70% of the hospitals running in India belong to private sector. Nearly
60% of dispensaries are run by the same private sector.
○ Private sector has also been contributing significantly in medical education and
training, medical technologies and diagnostics, manufacture and sale of
pharmaceuticals, hospital construction and medical services.
● Health System in India → three tier system

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1. Primary Health Care

○ Includes
■ Education concerning prevailing health problems and methods of
identifying, preventing and controlling them.
■ Promotion of food supply and proper nutrition and adequate supply of
water and basic sanitation.
■ Maternal and child health care.
■ Immunisation against major infectious diseases and injuries.
■ Promotion of health and provision of essential drugs.
○ Auxiliary Nursing Midwife (ANM): First person who provides primary health
care.
2. Secondary Healthcare: Health care institutes having better facilities for surgery, X-
ray, ECG (Electro Cardio Graph) are called secondary healthcare institutes.
○ They function both as primary health care providers and also provide better
health care facilities.
○ They are mostly located in districts and headquarters in big towns.
3. Tertiary Healthcare: Hospitals which have advanced level equipment and medicines
and undertake all the complicated health problems, which could not be managed by
primary and secondary hospitals.
○ Includes many premier institutes which not only impart quality medical
education and conduct research but also provide specialised health care.
○ Example: All India Institute of Medical Sciences (AIIMS)
● Indicators of Health in Health Infrastructure
○ Health status of the country can be assessed through indicators such as infant
mortality and maternal mortality rates, life expectancy and nutrition levels,
along with the incidence of communicable diseases.
○ India’s expenditure on the health sector is only 1.9% of total GDP. This is very
low as compared to other countries, both developing and developed.
○ India has about 17% of the world’s population but it bears a significant share of
the global burden of disease.
■ Global Burden of Diseases (GBD): Indicator used by experts to gauge
the number of people dying prematurely due to a particular disease as
well as the number of years spent by them in a state of disability owing
to the disease.
● Urban-rural and Poor-rich Divide
○ Only one-fifth of total hospitals are located in rural areas.
○ Rural India has about half the number of dispensaries.
○ People in rural areas do not have sufficient medical infrastructure.
○ The PHCs located in rural areas do not offer even X-ray or blood testing
facilities which, for a city dweller, constitutes basic healthcare.
○ There is a shortage of doctors in rural areas.

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● Women’s Health
○ More than 53% of women between the age group of 15 and 49 years suffer
from anaemia caused by iron deficiency.
○ It has contributed significantly to maternal deaths.
○ Abortions are major cause of maternal morbidity and mortality in India

Ch 9: ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

Environment: Total planetary inheritance and the totality of all resources including all the
biotic and abiotic factors that influence each other.
Functions of the Environment
● It assimilates waste.
● It sustains life by providing genetic and biodiversity.
● It also provides aesthetic services like scenery etc.
● It supplies resources.
○ Renewable resources: Resources that can be used without the possibility of
the resource becoming depleted or exhausted as continuous supply of the
resource remains available.
○ Non-renewable resources: Resources which get exhausted with extraction
and use, for example, fossil fuel It assimilates waste It sustains life by providing
genetic and bio diversity It also provides aesthetic services like scenery etc.
○ The environment performs these functions uninterruptedly as long as the
demand on these functions is within its carrying capacity → Resource
extraction is below the rate of regeneration of the resource and the wastes
generated are within the assimilating capacity of the environment.
Absorptive Capacity: Ability of the environment to absorb degradation.
Global Warming: Gradual increase in the average temperature of the earth’s lower
atmosphere as a result of the increase in greenhouse gases.
● Long-term results of global warming
○ Melting of polar ice → rise in sea level → coastal flooding
○ Disruption of drinking water supplies dependent on snow melts.
○ Extinction of species as ecological niches disappear.
○ More frequent tropical storms.
○ Increased incidence of tropical diseases.
● Kyoto Protocol, 1997 → Reductions in emissions of greenhouse gases by
industrialised nations.
Ozone Depletion: Phenomenon of reductions in the amount of ozone in the stratosphere.
● Caused by high levels of chlorine and bromine compounds in the stratosphere.
● The origins of these compounds are chlorofluorocarbons (CFC), used as cooling
substances in air conditioners and refrigerators, or as aerosol propellants, and
bromofluorocarbons (halons), used in fire extinguishers.

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● Ozone layer prevents most harmful wavelengths of ultraviolet light from passing
through the Earth’s atmosphere.
● Montreal Protocol → Ban the use of chlorofluorocarbon (CFC) compounds, as well
as other ozone depleting chemicals such as carbon tetrachloride, trichloroethane (also
known as methyl chloroform), and bromine compounds known as halons.
Deccan Plateau → Black Soil → cultivation of cotton
Indo-Gangetic plains → One of the most fertile, intensively cultivated and densely
populated regions in the world.
Indian Iron ore reserves → 8% of the world’s total iron-ore reserves
Chipko Movement → Aimed at protecting forests in the Himalayas.
Appiko (Karnataka) → On 8 September 1983, when the felling of trees was started in Salkani
forest in Sirsi district, 160 men, women and children hugged the trees and forced the
woodcutters to leave.
Central Pollution Control Board → set up in 1974 → Address water and air pollution
● Identified 17 categories of industries as significantly polluting.
Threat to India’s Environment: 2 dimensions
1. Threat of poverty induced environmental degradation.
2. Threat of pollution from affluence and a rapidly growing industrial sector.
Sustainable Development: Development that meets the needs of the present generation
without compromising the ability of the future generation to meet their own needs.
● Our Common Future → United Nations Conference on Environment and Development
(UNCED) → meeting the basic needs of all and extending to all the opportunity to
satisfy their aspirations for a better life.
● Edward Barbier → Development which is directly concerned with increasing the
material standard of living of the poor at the grass root level.
● Brundtland Commission → emphasises on protecting the future generation.
● Sustainable Development Goals (SDGs) → In 2015, the UN formulated 17 goals
intended to be achieved by the year 2030.

Ch 10: DEVELOPMENT EXPERIENCES OF INDIA: A

COMPARISON WITH NEIGHBOURS

Development Path
● All three countries began their development journeys at the same time. India and
Pakistan gained independence in 1947, and China established the People's Republic
of China in 1949.
● All three countries had begun to plan their development strategies similarly. India
unveiled its first Five Year Plan in 1951, Pakistan in 1956, and China in 1953.
● India and Pakistan pursued similar strategies, such as establishing a large public
sector and increasing government spending on social development.
● While India and Pakistan followed the ‘mixed economy' model, China followed the
‘command economy' model of economic growth.

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● Before the 1980s, all three countries had comparable growth rates and per capita
incomes.
Development Strategies of China
● Giant Leap Forward, 1958: Campaign aimed at massively industrialising the country
by encouraging people to establish large-scale industries in their own backyards.
● Commune system: People collectively cultivated lands.
● Great Proletarian Cultural Revolution (1966-1976): Revolution started by Mao in
which students and professionals were sent to the countryside to work and learn.
● 1978 Reforms: To generate enough surplus to finance the modernization of the
Chinese economy on the mainland.
Development Strategies of India
● New trade reform has been implemented since 1991 and has accelerated India's
growth.
● To reduce poverty, several poverty alleviation programs have been implemented.
● Variety of measures to develop areas that are lagging behind in the overall
development of the village economy.
● Economic reforms have been initiated to generate employment in the country, to
provide gainful self-employment and skilled wage employment opportunities.
Development Strategies of Pakistan
● Pakistan has a mixed economy in which the public and private sectors coexist.
● In the late 1950s and early 1960s, a regulatory framework for import industrialization
was established. The policy combined tariff protection for consumer goods
manufacturing with direct import controls on competing imports.
● Green Revolution was implemented to increase food productivity and self-sufficiency,
and increased food grain output.
● In the 1970s, nationalisation of capital goods industries took place.
Demographic indicators
● Pakistan's population is very small, accounting for roughly one-tenth of that of China
and India.
● Though China is the largest nation and geographically occupies the largest area
among the three nations, its density is the lowest
● Population growth is highest in Pakistan followed by India and China.
● Sex ratio is low and biased against females in all three countries
● Fertility rate in China is low, but it is very high in Pakistan.
● China and Pakistan have more urban populations than India.
Gross Domestic Product (GDP) and Sectors
● China has the world's second-largest GDP (PPP).
● In China, manufacturing accounts for the majority of GDP, whereas in India and
Pakistan, the service sector accounts for the majority of GDP.
● There has been a decline in Pakistan and China’s growth rates, whereas, India met
with moderate increase in growth rates.
● In all the three countries the service sector is emerging as a major player of
development.
● Growth of the agriculture sector, which employs the largest proportion of the
workforce in all the three countries, has declined.
Human Development Indicators
● China outperformed India and Pakistan in following areas of human development:
○ Per capita GDP
○ Proportion of the population living in poverty
○ Health indicators → mortality rates, access to sanitation, literacy, life
expectancy, and malnourishment.
● China and Pakistan are ahead of India in reducing the proportion of people below the
poverty line and also their performance in sanitation.
● All the three countries report providing improved drinking water sources for most of
its population
Liberty Indicators

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● Extent of democratic participation in social and political decision-making’

● Extent of Constitutional protection given to rights of citizens
● Extent of constitutional protection of the Independence of the Judiciary and the Rule
of Laws

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