1. Features of Indian Economy
Per Capita Income
I came across India’s per capita income figures the other day, and it makes a very interesting
read. The per capita income for India for 2010 is Rs. 54,835 which grew from Rs. 46,492 the
year before.
The first thing that strikes you about this number is how low this number is – by aggregate GDP
India stands number 9 or 10 in the world, but if you take the per capita GDP then India is a lowly
138 by IMF estimates, and 109 by World Bank estimates. CIA estimates rate it at an even lower
142.
In fact, if you look at the state with the lowest GDP – Bihar at Rs. 20,069 or about $456 – and
compare that with other countries then it would come as low as 170 or so.
Bihar is also only about a seventh of Delhi’s GDP and that reflects the disparity between the
various states.
Here is the chart which breaks down the per capita income by state for 2009 and 2010. Wherever
values are zero, it means that there was no data for that state in that period, and I had to make it
zero in order to create the chart.
India Per Capita Income by State 2010

2. In this chart – Goa is doing well, and I think this is closer to reality than the high unemployment
shown in the unemployment survey.
Apart from the low number, and disparity, the third thing that strikes me is the role of cities in
the high GDP. The tallest towers belong to cities, and to me, industrialization, building cities,
and moving the workforce out of agriculture into more industries, and services seems to be the
only way to grow the GDP numbers, and generally improving the standard of living in the
country.
A look at the countries with the highest per capita GDP confirms this because there aren’t any
countries there that aren’t industrialized.
I’m interested to see what the break up of the GDP for each of these states looks like also. At
present, I don’t know if that data is available somewhere but I’ll look for it. If you know about
such a document then please do leave a link.
Finally, here is the data for the above chart in a format that you should be able to copy in Excel
easily.
S.No. State 2009 – 10 2010 – 11
1 Andhra Pradesh 51025 60458
2 Arunachal Pradesh 51405 0
3 Assam 27197 30413
4 Bihar 16715 20069
5 Jharkhand 27132 29786
6 Goa 132719 0
7 Gujarat 63961 0
8 Haryana 78781 92327
9 Himachal Pradesh 50365 58493
10 Jammu & Kashmir 30582 33056
11 Karnataka 52097 59763
12 Kerala 59179 0
13 Madhya Pradesh 27250 0
14 Chattisgarh 38059 44097
15 Maharashtra 74027 83471
16 Manipur 27332 29684
17 Meghalaya 43555 48383
18 Mizoram 45982 0
19 Nagaland 0 0
20 Odisha 33226 36923
21 Punjab 60746 67473
22 Rajasthan 34042 39967
23 Sikkim 68731 81159

3. 24 Tamil Nadu 63547 72993
25 Tripura 35799 38493
26 Uttar Pradesh 23395 26051
27 Uttarakhand 59584 68292
28 West Bengal 41219 0
29 A & N islands 74340 0
30 Chandigarh 118136 128634
31 Delhi 116886 135814
32 Puducherry 88158 98719
Standard of Living
With one of the fastest growing economies in the world, clocked at a growth rate of 8.3% in
2010, India is fast on its way to becoming a large and globally important consumer. The
Indian middle class, estimated to be 50 million people, by McKinsey is fast becoming used
to Western culture. If current trends continue, Indian per capita purchasing power parity will
significantly increase from 4.7 to 6.1 percent of the world share by 2015.[3] In 2006, 22 percent
of Indians lived under the poverty line. India aims to eradicate poverty by 2020.
The standard of living in India shows large disparity. For example, rural areas of India exist with
very basic (or even non-existent) medical facilities, while cities boast of world class medical
establishments. Similarly, the very latest machinery may be used in some construction projects,
but many construction workers work without mechanization in most projects.
In 2010, the per capita PPP-adjusted GDP for India was US$3,608.
High Poverty
Poverty is widespread in India, with the nation estimated to have a third of the world's poor.
According to a 2005 World Bank estimate, 41.6% of the total Indian population falls below
the international poverty line of US$ 1.25 a day (PPP, in nominal terms 21.6 a day in urban
areas and 14.3 in rural areas). According to a new UN Millennium Development Goals Report,
as many as 320 million people in India and China are expected to come out of extreme poverty in
the next four years, while India's poverty rate is projected to drop to 22% in 2015. [2] The report
also indicates that in Southern Asia, however, only India, where the poverty rate is projected to
fall from 51% in 1990 to about 22% in 2015, is on track to cut poverty in half by the 2015 target
date.
The 2011 Global Hunger Index (GHI) Report ranked India 15th, amongst leading countries
with hunger situation. It also places India amongst the three countries where the GHI between
1996 and 2011 went up from 22.9 to 23.7, while 78 out of the 81 developing countries studied,
including Pakistan, Nepal, Bangladesh, Vietnam, Kenya, Nigeria, Myanmar, Uganda, Zimbabwe
and Malawi, succeeded in improving hunger condition.

4. The states are listed below in increasing order of poverty based on the Multi-
dimensional Poverty Index.
Population
Number of
MPI (in Proportion Average Contribution to
States MPI MPI poor
rank millions) of poor intensity overall poverty
(in millions)
2007
— India 1,164.7 0.296 55.4% 53.5% - 645.0
1 Kerala 35.0 0.065 15.9% 40.9% 0.6% 5.6
2 Goa 1.6 0.094 21.7% 43.4% 0.0% 0.4
3 Punjab 27.1 0.120 26.2% 46.0% 1.0% 7.1
Himachal
4 6.7 0.131 31.0% 42.3% 0.3% 2.1
Pradesh
5 Tamil Nadu 68.0 0.141 32.4% 43.6% 2.6% 22.0
6 Uttarakhand 9.6 0.189 40.3% 46.9% 0.5% 3.9
7 Maharashtra 108.7 0.193 40.1% 48.1% 6.0% 43.6
8 Haryana 24.1 0.199 41.6% 47.9% 1.3% 10.0
9 Gujarat 57.3 0.205 41.5% 49.2% 3.4% 23.8
Jammu And
10 12.2 0.209 43.8% 47.7% 0.7% 5.4
Kashmir
Andhra
11 83.9 0.211 44.7% 47.1% 5.1% 37.5
Pradesh
12 Karnataka 58.6 0.223 46.1% 48.3% 4.2% 27.0
Eastern
13 44.2 0.303 57.6% 52.5% 4.0% 25.5
Indian States
14 West Bengal 89.5 0.317 58.3% 54.3% 8.5% 52.2
15 Orissa 40.7 0.345 64.0% 54.0% 4.3% 26.0
16 Rajasthan 65.4 0.351 64.2% 54.7% 7.0% 41.9
17 Uttar Pradesh 192.6 0.386 69.9% 55.2% 21.3% 134.7
18 Chhattisgarh 23.9 0.387 71.9% 53.9% 2.9% 17.2
Madhya
19 70.0 0.389 69.5% 56.0% 8.5% 48.6
Pradesh
20 Jharkhand 30.5 0.463 77.0% 60.2% 4.2% 23.5
21 Bihar 95.0 0.499 81.4% 61.3% 13.5% 77.3

5. Unequal Income Distribution
Income distribution refers to the spread of a country's income percentage throughout its
population and yields a ratio between incomes of the richest in a country to the poorest. When
income is not proportionally distributed, it is called income inequality. While many would argue
it is a very much necessary part of natural economics, as in many other countries, India’s
increasing income inequality continues to pose a significant threat. In most cases, income
inequality plays a big role in the amount of crime a country has because "as the rich get richer
and the poor get poorer" it promotes unhappiness.
A great portion of India's population is a victim of rising monetary deficits, most of which has
crossed well under the poverty threshold. While the top 10% of India’s population enjoys 31.1%
of the country’s income, the lowest 10% suffers with merely 3.6%. The following data portrays
how India’s Inequality measures ratio compares to that of other countries:
 India 8.6
 United Kingdom 13.8
 United States 15.9
 Sierra Leone 87.2
 Austria 6.9
 Slovenia 5.9
Dominance of Agriculture
India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging
and fishing accounted for 15.7% of the GDP in 2009–10, employed 52.1% of the total
workforce, and despite a steady decline of its share in the GDP, is still the largest economic
sector and a significant piece of the overall socio-economic development of India. Yields per
unit area of all crops have grown since 1950, due to the special emphasis placed on agriculture in
the five-year plans and steady improvements in irrigation, technology, application of modern
agricultural practices and provision of agricultural credit and subsidies since the Green
Revolution in India. However, international comparisons reveal the average yield in India is
generally 30% to 50% of the highest average yield in the world. Indian states Uttar Pradesh,
Punjab, Haryana, Madhya Pradesh, Andhra Pradesh, Bihar, West Bengal and Maharashtra are
key agricultural contributing states of India.
India receives an average annual rainfall of 1,208 millimeters (47.6 in) and a total
annual precipitation of 4000 billion cubic meters, with the total utilizable water resources,
including surface and groundwater, amounting to 1123 billion cubic meters. 546,820 square
kilometers (211,130 sq mi) of the land area, or about 39% of the total cultivated area, is
irrigated. India's inland water resources including rivers, canals, ponds and lakes and marine
resources comprising the east and west coasts of the Indian ocean and other gulfs and bays
provide employment to nearly six million people in the fisheries sector. In 2008, India had the
world's third largest fishing industry.

6. India is the largest producer in the world of milk, jute and pulses, and also has the world's second
largest cattle population with 175 million animals in 2008. It is the second largest producer of
rice, wheat, sugarcane, cotton and groundnuts, as well as the second largest fruit and vegetable
producer, accounting for 10.9% and 8.6% of the world fruit and vegetable production
respectively. India is also the second largest producer and the largest consumer of silk in the
world, producing 77,000 million tons in 2005.
Existence of Rich Resources
The total cultivable area in India is 1,269,219 km² (56.78% of total land area), which is
decreasing due to constant pressure from an ever-growing population and increased urbanization.
India has a total water surface area of 314,40 km² and receives an average annual rainfall of
1,100 mm. Irrigation accounts for 92% of the water utilization, and comprised 380 km² in 1974,
and is expected to rise to 1,050 km² by 2025, with the balance accounted for by industrial and
domestic consumers. India's inland water resources comprising rivers, canals, ponds and lakes
and marine resources comprising the east and west coasts of the Indian ocean and
other gulfs and bays provide employment to nearly 6 million people in the fisheries sector. In
2008, India had the world's third largest fishing industry.
India's major mineral resources include Coal (fourth-largest reserves in the world), Iron ore,
Manganese, Mica, Bauxite, Titanium ore, Chromite, Natural gas, Diamonds, Petroleum,
Limestone and Thorium (world's largest along Kerala's shores). India's oil reserves, found
in Bombay High off the coast of Maharashtra, Gujarat, Rajasthan and in eastern Assam meet
25% of the country's demand.
Rising energy demand concomitant with economic growth has created a perpetual state of energy
crunch in India. India is poor in oil resources and is currently heavily dependent on coal and
foreign oil imports for its energy needs. Though India is rich in Thorium, but not in Uranium,
which it might get access to in light of the nuclear deal with US. India is rich in certain energy
resources which promise significant future potential - clean / renewable energy resources
like solar, wind, biofuels (jatropha, sugarcane).
Unemployment and Underemployment
Unemployment has been a major problem among young Indians. There are thousands of young
who do not have a job and lakhs of people are not in the right kind of job (underemployed), just
because there are no openings for jobs in which they specialize. There are lots of talented people
who are striving to find the right kind of jobs, but land up wasting their energy in inferior kind of
jobs. This leads in under utilization of labor (also called Underemployment).
The huge population explosion in a main reason for growing unemployment and
underemployment in India. The industrial sector is growing, no doubts about it. But the

7. growths of industries are not in par with the growth of Indian population. So, industries are not in
a position to create as much as jobs required by the society. It has brought a cut throat
competition especially in highly desired fields. Only those people who have the qualification
exceeding the requirement of the industries are able to get into the jobs.
The scarcity of jobs even has lead to the corruption in hiring the employees. In many cases, the
human resource officials are taking the undue advantage of the situation, by demanding the
bribes to offer the jobs. Candidates are helplessly bribing them, as they are desperately in need of
a job. Even the jobs being offered are not always quite secure. Government jobs are often prone
to bribes.
Industries and the government should work towards creating more and more jobs to kill
the problem growing unemployment and underemployment. At the same time, the proper
control has to be taken to control the explosion of population. The control of the population
can be done only by creating the awareness amongst the public. Society itself has to take the
responsibility of controlling the excess growth of population, which has been a cause for
unemployment and for many other problems.
Infrastructural Inadequacies
Infrastructure in India include transportation, agriculture, water management,
telecommunications, industrial and commercial development, power, petroleum and natural gas,
housing and other segments such as mining, disaster management services, technology-related
infrastructure.
Important sectors in Infrastructure in India:
Within the Infrastructure of India, the transportation sector is the most important, including the
aviation, ports, roads, rail system and logistics. The agriculture sector comprises infrastructure-
related storage facilities, construction relating to agro-processing projects and reservation and
storage of perishable goods. Among others essential sectors, real-estate development, including
industrial parks, special economic zones, tourism and entertainment centers, educational
institutions and hospitals and solid waste management systems, also play significant role in
Indian economy.
Under the Infrastructure in India the most essential field in which there should be development
is in the urban infrastructure. Except for a few large projects in a handful of cities, paucity
of urban infrastructure projects is a standing problem. Although city mass transport systems
and airports have found place in developmental plans, essential services such as roads, drinking
water, sewerage management, drainage, and primary health are still greatly under developed.
However, with the economy growing at more than at the rate of 8 per cent, the government is
aiming at an economic growth rate of 8 per cent during the Eleventh Plan (2008–12), for which
the government is taking necessary steps to develop the Infrastructure in India.