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Class 12 Development Experiences

This document compares the development experiences of India, Pakistan, and China from their independence in the late 1940s-1950s. [1] All three countries initially adopted similar mixed economy development strategies with public investment and five-year plans, though China's economy was more command-based. [2] By the 1980s, growth and incomes were similar, but China's 1978 reforms and focus on manufacturing, coupled with SEZs and rural reforms, propelled it ahead of India and Pakistan. [3] India and Pakistan saw slower growth, with Pakistan facing further political instability and debt issues.

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506 views5 pages

Class 12 Development Experiences

This document compares the development experiences of India, Pakistan, and China from their independence in the late 1940s-1950s. [1] All three countries initially adopted similar mixed economy development strategies with public investment and five-year plans, though China's economy was more command-based. [2] By the 1980s, growth and incomes were similar, but China's 1978 reforms and focus on manufacturing, coupled with SEZs and rural reforms, propelled it ahead of India and Pakistan. [3] India and Pakistan saw slower growth, with Pakistan facing further political instability and debt issues.

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Aryan ph vlogs
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BSE Class 12 Economics

Revision Notes
DEVELOPMENT EXPERIENCE OF INDIA
A COMPARISON WITH NEIGHBOURS

Development Path of India, Pakistan, and China.

(i) All three countries started their development path at the same time. India
and Pakistan got independence in 1947 and the people’s Republic of China
was established in 1949.
(ii) All three countries had started planning their development strategies in
similar ways. India announced its First Five Year Plan in 1951, Pakistan
announced in 1956 and China in 1953.
(iii) India and Pakistan adopted similar strategies, such as creating a large
public sector and raising public expenditure on social development.
(iv) Both India and Pakistan had adopted the ‘mixed economy’ model but
China had adopted the ‘Command Economy’ model of economic growth.
(v) Till the 1980s, all three countries had similar growth rates and per capita
incomes.
(vi) Economic Reforms were implemented in China in 1978, in Pakistan in
1988 and in India in 1991.

Development Strategy:

A. China

(i) After the establishment of the People’s Republic of China under one-party
rule, all the critical sectors of the economy, enterprises and lands owned and
operated by individuals, were brought under government control.
(ii) A Programme named ‘The Great leap Forward (GLF) campaign was
initiated in 1958, which aimed at industrializing the country on a massive
scale. Under this programme, people were encouraged to set up industries in
their backyards.
(iii) 1965, Mao Tse Tung introduced the ‘Great Proletarian Cultural Revolution
(1966-1976)’, under which students and professionals were sent to work and
learn from the countryside (rural areas).
(iv) In rural areas, a commune system was started, under which people
collectively cultivated lands.
(v) Reforms were introduced in China in phases.
(vi) In the initial phase, reforms were initiated in agriculture, foreign trade and
investment sectors. In the later phase, reforms were initiated in the industrial
sector.
(vii) The reforms process also involved dual pricing. This means fixing the
prices in two ways; farmers and industrial units were required to buy and sell
fixed quantities of raw materials and products on the basis of prices fixed by
the government and the rest were purchased and sold at market prices.
(viii) In order to attract foreign investors, special Economics Zones (SEZ) were
set up. SEZ is a geographical region that has economic laws different from a
country’s typical economic laws. Usually, the goal is to increase foreign
investment.

B. Pakistan

(i) Pakistan followed the mixed economy model with the co-existence of public
and private sectors.
(ii) Pakistan Introduced tariff protection for the manufacturing of consumer
goods, together with direct import controls on competing imports.
(iii) The introduction of the Green Revolution and the increase in public
investment in infrastructure in select areas, led to a rise in the production of
food grains.
(iv) In the 1970s, Capital goods industries were nationalized.
(v) In 1988, structural reforms were implemented. Major thrust areas were
denationalization and encouragement to the private sector.
(vi) Pakistan also received financial support from western nations and
remittances from emigrants to the Middle countries. This helped the country in
stimulating economic growth.

C. India

After Independence, India has adopted a mixed economy as an economic


development strategy. Both public and private sectors co-exist side by side. In
order to achieve rapid economic growth, a planned development economy
was introduced.

Economic Development Strategy after Independence:

(i) Both public and private sectors were allotted to carry business activities.
Public sector was allotted activities like coal, mining, steel, power, roads etc.
Private sector was allotted to establish industries subject to control and
regulations in the form of law.
(ii) Public sector was given major push by the Government. Maximum
revenues in this sector was invested which increased from Rs. 81.1 crore in
First Five-Year Plan (1951-56) to Rs 34,206 crores in Ninth Five-Year Plan
(1992-97)
(iii) Public sector was given importance in order to eliminate poverty,
unemployment etc.
(iv) Public sector contributed to the industrialisation of the economy. It also
helped Indian economy to achieve a considerable degree of self-sufficiency.

Comparative Study – India, Pakistan and China:

1. Demographic Indicators:

a. The population of Pakistan is very small and accounts for roughly about
one-tenth of China and India.
b. Though China is the largest nation geographically among the three, its
density is the lowest.
c. Population growth is highest in Pakistan followed by India and China. One
child norm which was introduced in China in the late 1970s is the major
reason for low population growth. But this measure led to a decline in the sex
ratio, that is the proportion of females per 1000 males.
d. The sex ratio is low and biased against females in all the three countries.
There is strong son-preference prevailing in all these countries.
e. The Fertility rate is low in China and very high in Pakistan.
f. Urbanisation is high in both China and Pakistan- with India having 28
percent of its people living in Urban areas.

2. Gross Domestic Product (GDP) and Sectors :

a. China has the second largest GDP (PPP)


of 10.1trillion(approx)in2013whereasIndia′sGDP(PPP)andPakistanGDP(PPP)
are4.2 trillion (approx) and $0.47 trillion (approx) respectively.
b. On this path of Development china’s average growth rate is about 9.5%
while India’s and Pakistan’s average growth rate is about 5.8% and 4.1%
respectively.
c. In China, in the year 2011. with 37 percent of its workforce engaged in
agriculture, its contribution to GDP is 9 percent (approx). While in India and
Pakistan the contribution of agricultural sector in GDP is about 19% and 21%
respectively. In India about 56% are engaged in agricultural sector, while in
Pakistan this figure is about 45%.
d. In china, manufacturing contributes the highest to GDP at 47 percent
whereas in India and Pakistan, it is the service sector which contributes the
highest (more than 50 percent of GDP)
e. Though china has followed the classical development pattern of gradual
shift from agriculture to manufacturing and then to services, India and
Pakistan’s shift has been directly from agriculture to service sector.
f. In the 1980s, India, China and Pakistan employed 17, 12 and 27 percent of
its workforce in the service sector respectively. In 2011, It reached the level of
25, 33 and 35 percent respectively (approx.).
g. China’s growth is mainly contributed by the manufacturing sector where as
in both India and Pakistan, the service sector is emerging as a major player of
development.

3. Human Development Indicators:

a. In most areas of human development, China has performed better than


India and Pakistan. This is true for many indicators-per Capita GDP or
proportion of population below poverty line, health indicators such as mortality
rates, access to sanitation, literacy, life expectancy or malnourishment etc.
b. Pakistan is ahead of India in reducing proportion of people below the
poverty line and also its performance in transferring labour force from
agricultural sector to industrial sector and access to water is better than India.
c. Contrary to it, India is ahead of Pakistan is education sector and providing
health services.
d. India and Pakistan are ahead of China in providing improved water
sources.

Conclusion

A. India-India performed moderately as is clear from

a. A majority of its people still depend on agriculture.


b. Infrastructure is lacking in many parts of the country.
c. It is yet to raise the level of living of more than 22% of its population that
lives below the poverty line.

B. Pakistan-Pakistan has performed poorly. The reasons for the


slowdown of growth and re-emergence of poverty in Pakistan’s
economy are:

(i) Political instability.


(ii) Volatile performance of agriculture sector.
(iii) Over dependence on remittances.
(iv) Growing dependence on foreign loans on the one hand and increasing
difficulty in paying back the loans on the other.
C. China-China has performed comparatively the best as is clear from:

a. Success in raising the level of growth along with alleviation of poverty.


b. It used the market mechanism to create additional social and economic
opportunities without political commitment.
c. By retaining collective ownership of land and allowing individuals to
cultivate lands, China has ensured social security in rural areas.
d. Public intervention in providing social infrastructure has brought about
positive results in human development indicators in China.

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