Ques: Can growth process be initiated entirely by market process,in less developed

economy like India?Why or why not.How does planning supplement in market

mechanism in this regard?
Ans: Growth process can be initiated by market process in less developed economy like
India this can be well explained with the help of following points.
1. A Quarter Century of Growth with Stability (1980-2005) :
The Indian economy has been growing at an average growth rate of about 6.0
per cent over a period of 25 years since 1980-81 (India’s fiscal year is from 1st
April to 31st March).

The important point to note is that not only the growth rate of the Indian
economy has been high during this period, but there has been considerable
amount of stability also. A remarkable feature of India's growth experience has
been its resilience to both global and domestic shocks.

Several hypotheses are given to explain this level of consistency in India's growth
rate despite the fact that we faced several exogenous shocks like contagion effect
of international financial crises, security tensions, international sanctions, poor
rainfall, etc.
2. Recent Acceleration of Growth and Confidence:
A notable recent development is that India is also becoming a major hub for
manufacturing and export of manufactured products and some examples of
global competitiveness of Indian industry may be in order. Steel production in
India is now amongst the lowest-cost production in the world. Pharmaceutical
and biotech firms are likewise very competitive internationally. In recent years,
we have witnessed the coming of age of the Indian IT multinationals, indigenous
players beginning to build noticeable presence in other locations – through cross-
border acquisitions, off-shore winning of contracts and organic growth in other
low-cost locations.
3. Explorations on the Financial Sector:
A.strong banking sector-
The banking system in India has undergone significant changes during last 16
years. There have been new banks, new instruments, new windows, new
opportunities and, along with all this, new challenges.
B. Financial markets : Efficient and developing
A wide range of regulatory and institutional reforms were introduced in a planned
manner over a period to improve the efficiency of financial markets. These
included development of market micro structure, removal of structural
bottlenecks.
FEATURES OF INDIAN ECONOMY:
 Mass Poverty and Low Per Capita Income
 Inequalities in income distribution
 Inadequate Capital Formation
 Predominance of Agriculture
 Demographic Peculiarities
 Unemployment and Underemployment
 Technological Backwardness
INDIA AS PROGRESSIVE NATION:
 Sustained Growth
 Self reliance and minimal dependence
 Agriculture Transformation
 Industrial Changes
 Infrastructural revolution
 Changes in Foreign Trade
 Strong Fundamentals
 Expansion of Education
 Reduction in Poverty
 More Employment
NATIONAL INCOME:

 GDP growth rate approx. 9% per annum

 8.7% increase in National Income
 7.2% increase in per capital income
 Agriculture growth in 2.6%
 Industry growth is 9.4%
 Services Sector growth is 10.7%
REGIONAL IMBALANCES:
Goa, Haryana, Maharashtra, Punjab and Gujarat having max. per capita
income in India

 Bihar, UP, MP, Orissa and Jharkhand having min. per capital income in
India
INFRASTRUCTURE IN INDIA
 Low priority in Plans
 Huge requirement of Investment
 Long Gestation Period
AGRICULTURE IN INDIA:
 India has been ranked no. 1for:
 Total irrigated area
 Pulses
 Jute
 Spices
11TH 5 YEAR PLAN FOR AGRICULTURE
 Second Green Revolution
 Growth rate to increase by 4%
 Focus on agricultural research
 Increase in irrigation faciltiies
 Development of modern agricultural markets
PROBLEMS IN INDIAN ECONOMY: Problem of Poverty
 Problem of Population
 Problem of Unemployment
 Regional Imbalances
 Inequalities of Income and Wealth in India
 Foreign Trade & Balance of Payments