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Raj Chhabra-221194 - CA2 Indian Eco

India has seen significant GDP growth since the 1990s, primarily driven by the service sector, but this growth has not resulted in adequate employment opportunities or improvements in rural agriculture. The country faces challenges such as rising inequality, stagnation in formal employment, and an agrarian crisis leading to increased rural distress. To ensure sustainable development, a balanced approach prioritizing inclusive economic policies is essential.

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19 views2 pages

Raj Chhabra-221194 - CA2 Indian Eco

India has seen significant GDP growth since the 1990s, primarily driven by the service sector, but this growth has not resulted in adequate employment opportunities or improvements in rural agriculture. The country faces challenges such as rising inequality, stagnation in formal employment, and an agrarian crisis leading to increased rural distress. To ensure sustainable development, a balanced approach prioritizing inclusive economic policies is essential.

Uploaded by

rajchhabra1604
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Indian Economy in the Era of Contemporary Globalization: Key Insights

-​ Raj Chhabra (221194)

1. Growth Performance & Structural Shifts

●​ India has experienced high GDP growth rates since the 1990s, attributed to
economic liberalization.
●​ The growth pattern has been service-driven, with the tertiary sector’s share
increasing from 41% (1991) to 54% (2005-06).
●​ Unlike historical global patterns, India’s services sector growth has outpaced
industrial and agricultural growth.
●​ The IT sector has shown impressive growth, but its sustainability remains uncertain.

2. Employment & Labour Market Challenges

●​ Economic growth has not translated into sufficient employment generation.


●​ Employment growth in the 1990s was significantly lower than in the 1980s,
particularly in rural areas.
●​ Formal employment has stagnated, with a shift towards self-employment and
informal work.
●​ Real wages for workers, especially in organized manufacturing, have declined
despite increased productivity.

3. Agrarian Crisis & Rural Distress

●​ Agriculture has suffered stagnation, with declining growth rates and food grain
production.
●​ Rural distress is evident in high farmer suicides due to debt, fluctuating prices, and
reduced state support.
●​ Institutional credit for farmers has declined, increasing dependence on informal
money lenders.
●​ Government spending on rural development has fallen drastically, exacerbating
agricultural distress.

4. Inequality, Poverty, and Social Indicators

●​ Economic liberalization has led to rising inequality, with disparities between urban
and rural India growing.
●​ Hunger and malnutrition remain severe, with nearly 50% of children underweight.
●​ India’s performance on Millennium Development Goals (MDGs) has been mixed, with
slow progress in health and education.
●​ Gender disparity, social exclusion of marginalized communities (SCs, STs), and lack
of access to basic services continue to hinder inclusive development.

5. Challenges in Infrastructure & Policy Gaps


●​ Poor infrastructure, particularly in power and transport, remains a bottleneck for
sustained growth.
●​ The decline in public investment in agriculture, education, and healthcare has
weakened long-term development prospects.
●​ Economic policies have favored corporate and urban growth, often at the expense of
rural and marginalized populations.

Conclusion

●​ While India’s GDP growth has been impressive, the benefits have been unevenly
distributed.
●​ The agrarian crisis, employment stagnation, and rising inequality challenge the
sustainability of the growth model.
●​ The focus on neoliberal policies has weakened state intervention in crucial sectors,
leading to development deficits.
●​ Addressing these challenges requires a balanced approach that prioritizes inclusive
and broad-based economic development.

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