Policy Brief: India, Essay Example

Background of India

India has the second largest population in the world and is BRIC country (Brazil, Russia, India and China), one of four newly economic advancing countries. Additionally, India is also one of the world’s fastest developing countries with a diversified economy mostly run by agriculture, textiles, handicrafts, and services. However, India mostly relies on agriculture for its income and wealth, but still has an extremely unbalanced distribution of social wealth (Allchin). The development path of India is analyzed in-depth for India in this policy brief, particularly as it pertains to its agricultural development, population growth, and demographic transition. This will result in the provision of a background of relevant facts about India, details about the evolution of aspects of these facts over time, and discussion of the reasons for this evolution and how it relates to India’s past and future development.

India is the largest country in South Asia and is comprised of 29 states that are largely self-controlled. The country also has 6 union territories as well as the national capital territory of Delhi, including India’s capital, New Delhi. Additionally, India is the second largest country in the world, behind China, with one-sixth of the world’s population of nearly 1.3 billion people, according to 2014 estimates (Allchin). India is also very ethnically diverse and is the home of hundreds of major and minor linguistic groups and its “Religious minorities, including Muslims, Christians, Sikhs, Buddhists, and Jains, still account for a significant proportion of the population; collectively, their numbers exceed the populations of all countries except China” (Allchin). As it relates to the country’s social economy, it shows “increasing physical prosperity and cultural dynamism”, although many parts of the country suffer from “domestic challenges and economic inequality” (Allchin).

Agricultural Development in India

At the time of India’s independence in 1947 (BBC), agriculture was the main source of the country’s national income and occupation. This equated to almost 50 percent of India’s national income coming from agriculture and about 72 percent of the country’s working population being employed in the agricultural sector. Additionally, agriculture in India grew at a rate of approximately 1 percent annually during the five decades prior to its independence and has grown at a rate of approximately 2.6 percent annually after its independence (Tripathl and Prasad). However, despite its growth, over the last two decades, India’s agricultural development has been challenged by factors such as a slowed growth rate, inter-regional and inter-sectoral equity, decline in input efficiency, and natural resource degradation. This has affected the country’s growth rate in agriculture. This is due in part to inadequate provision of public goods that are critical to the public welfare, such as extension services, surface irrigation, research and development, and rural infrastructure (Sharma).

It is significant to note that the agricultural sector currently contributes approximately 15 percent to India’s gross national product (GDP). In addition, about 50 percent of the population in India depends on agriculture and activities associated with it for their livelihoods (Sharma as cited in GOI, 2011). However, research shows that India’s agricultural sector’s contribution to the country’s GDP has actually declined in past years. For example, Agriculture contributed approximately 44 percent to India’s GDP in 1970–71 and dropped even more to 31.4 percent, two decades later in 1990–91, and it was down to 14.6 percent in 2009–10 (Sharma as cited in CSO, 2011).

Research shows that more than half of India’s workforce is dependent on agriculture for their employment and livelihoods. Additionally, agriculture continues to dominate this sector of the economy in India, even though the country’s national GDP share has declined in recent years. Rapidly growing non-agriculture sectors have not helped much, as they have failed to accelerate poverty reduction or agricultural growth. In fact, agriculture in India has faced challenges in the last two decades (Sharma).

Growth, Inequality, and Poverty

It is significant to note that stagnated growth in India’s agricultural sector is not proportionate to its population growth, particularly its poor population. Over the previous decade, India has shown significant economic progress, as the country has seen sustained growth in the economy between 2007 and 2011 with GDP growth of 8 percent per annum, for example (Home Office). However, approximately 25 percent of the world’s poor and hungry people are in India, and the country is ranked number 65 of 79 countries on the Global Hunger Index, as reported by the International Food Policy Research Institute. In addition, according to The World Bank, India has the largest population of poor in the world with 400 million (The Alarming Picture). Additionally, as it relates to poverty and inequality, India is no exception. Significant gaps between the wealthy and the poor in the country are documented, as the poor of India represent a disproportionate number of all people living in extreme poverty worldwide. This is particularly a problem in rural areas of India, especially with declines in productivity from farming and agriculture. However, even with these dire statistics, initiatives to alleviated poverty in the country has resulted in decreasing numbers of people living below the poverty line. For example, about 30% of people in India lived below the poverty line in 2009, and this had dropped to about 22% in 2011, according to the World Bank (The Alarming Picture).

Population Growth and the Demographic Transition

It is a fact that India has shown significant population growth, as 2011 census data reveals that India’s population was over 1.2 billion, which is an increase of 181 million since 2001. This amounts to roughly an 18 percent increase in the population in 10 years. Interestingly, India is home to 17.5 percent of the world’s population, even though the country is only 2.4 percent of the world’s surface (Home Office). India has some very significant population indicators compared to the rest of the world in terms of human development. For example, according to The World Bank estimates, the infant mortality rate in India, as measured by life expectancy at birth, as shown in Table 1 below, for a newborn infant relative to mortality patterns remaining the same throughout life is 66.8 years, currently. This number is expected to increase as time goes on, as shown below. Factors affecting this rate include skill of health staff, communicable diseases (particularly HIV, however, prevalence for this disease in India is low at just 0.4% as of 2014), prenatal nutrition conditions, injury, fertility rate (which is 2.7% as of 2013 (see table below in Table 2), down from 2.8% in 2006), health expenditure, immunization, and sanitation conditions. (World Bank).

As it pertains to the population growth rates, studies show that they affect economic growth rates. This has much to do with changing age structures of a country as it relates to demographic transitions that the country goes through. These transitions include high mortality and high fertility to low fertility and low mortality, and they have much to do with a country’s population age composition and how that changes over time. During the time of demographic transition such as this, the country falls into an opportunity window when the working-age population grows faster than the total population, which is the ‘demographic dividend’ (Kumar). Shifts in a population’s age distribution is seen when the relative share of younger people decreases as the relative share of older people increases. Additionally, this being coupled with declining fertility rates causes a demographic transition. India’s population growth is showing this trend, as it is projected to overrun China’s population growth rate within the next decade. And, the United Nations Population Division projects India’s population of older people will spike significantly over the next four decades (Ponnapalli, Ponnapalli and Subbiah).

Age composition changes are relevant and significant because different age groups behave differently. Additionally, a growing working-age population within the total population of a country can positively affect the country’s economic growth. This is true because, for example, first the country can realize increases in labor supply due to a larger working-age population. In addition, labor supply could increase by the addition of women to the workforce due to declining family size. This means that a population with a higher amount of children in ages 0–14 will have a greater share of income spending on bringing up this young population, which will therefore save less. Similarly, a country with a larger population of older people ages 65 and up, will spend more on health care and pensions. On the other hand, a country with a greater working-age population will be more productive, supplies more labor, saves more than they consume, and provides investment capital. Another contributor to economic growth is through increased human capital, such as the trend in India, with fewer children and longer expected working lives of the population, which means more time to recover investments. Additionally, parents are likely more apt to invest in children’s health and education (Kumar).

Research shows that an aging population represents in the completion of demographic transition within a country. Consequently, Indian states are well in advance of the demographic transition process. It is interesting to note that this progress is proportionate to specific aging indicators such as the proportion of the population from ages 0–14 and over 60, as indicated above, in past and future decades. As it relates to the growing population of the aged in India over time, the India Registrar General proposes that the composition of age structure in India is changing, and it is because of declines in fertility and improved life expectancy. Additionally, due to the elderly population trend in India, the country implemented the National Policy for Older Persons in 1999. The aging population in India, as in any country, impacts upon the medical, social, and financial aspects of a country at the household level. This is due to larger number of elderly people in the country creating the need for social services and other necessary services for this segment of the population (Ponnapalli, Ponnapalli and Subbiah).

Research shows that demographic projections until the year 2026 reveal differences in India’s pace of demographic transition, which will likely increase over the next few years. “On the one hand, some states such as Andhra Pradesh, Kerala, Karnataka, and Tamil Nadu are projected to see a decline in their share of the working-age population in total population. On the other hand, some states are likely to see a continuing increase in the share of the working-age population in total population, and will account for as much as 58 per cent of the increase in India’s working-age population (Kumar:203). This is significant because it means that in order for India to fully take advantage of the window of opportunity, as it relates to its demographic transition, it must continue to generate gainful employment opportunities to meet the demand coming up from the increase in the working-age population. This is particularly true for the four BIMARU states in India (Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh), as they are projected to have the most increase in share of working-population in relation to the total population in the coming decades. However, these four states have historically grown the slowest and have the lowest income per capita. These states also perform the poorest as far as “social and physical infrastructure, investment climate, and employment generation” (Kumar:203). What does this mean? It means that the survival of a large proportion of India’s working-age population may consequently depend to what extent the BIMARU states recognize reform, and how fast they do it. These states must attractive new investors and generate new employment opportunities, or else India’s demographic transition will realize failures in many areas (Kumar).

Conclusion

This paper has shown the purpose of a policy brief to continue developing an understanding of the chosen country of India. The paper particularly considers the development path of the country, which includes how it has changed and transitioned over the past decades and how it is projected to evolve into the future. Areas of focus include understanding the role of India’s agricultural development, both historically and currently. In addition, the paper discusses rural worlds and the inter-relationship between growth, inequality and poverty reduction. Another area of focus is examining the population growth and the demographic transition of India, as was discussed in detail. This discussion focuses on how the country’s population growth rates are changing and the implications for them in the future. Additionally, key drivers of the changing population growth rates are discussed, as well as the role of fertility rates and changing life expectancy in the country. The likelihood of how future population growth rates impact the country’s development is also discussed. The paper has provided a background of India highlighting the relevant facts for the country, details on the evolution of the aspects across time, discusses the reasons for their recent evolution, and how this relates to India’s past and future development.

India, with its unique government, politics and ethnical nuances is arguably one the world’s most interesting nations. Additionally, with its increasing economic growth rate and its large population, India is also potentially one of the strongest countries in the world as well.  India is a significant country that boasts a high level of diversity in facets such as religions, languages, and caste groups. Consequently, India is home to some of the most wealthy and poorest. As shown in this paper, India also reveals great economic, cultural, and political potential, which makes the country very influential in world affairs.

Works Cited

Allchin, Frank R. India. 2015. Web. 28 October 2015. <http://www.britannica.com/place/India>.

BBC. India profile – Timeline. 30 June 2015. Web. 28 October 2015. <http://www.bbc.com/news/world-south-asia-12641776>.

CSO. Revised Estimates of Annual National Income 2010-11 and Quarterly Estimates of Gross Domestic Product, 2010-11. Ministry of Statistics and Programme Implementation. New Delhi: Govt. of India, 2011. Print.

GOI. Faster, Sustainable and More Inclusive Growth: An Approach to the 12th Five Year Plan (Draft). Government of India. New Delhi: Planning Commission, 2011. Print.

Home Office. “India: Background information, including actors of protection, and internal relocation.” Country Information and Guidance. 2015. Print.

Kumar, Utsav. “India’s Demographic Transition: Boon or Bane?” Asia & the Pacific Policy Studies 1.1 (2014): 186-203. Print.

Ponnapalli, Ramani, Krishna Murthy Ponnapalli and A. Subbiah. “aging and the demographic transition in india and its states: a comparative perspective.” International Journal of Asian Social Science 3.1 (2013): 171-193. Print.

Sharma, Vijay P. India’s Agricultural Development under the New Economic Regime: Policy Perspective and Strategy for the 12th Five Year Plan . Working Paper. Ahmedabad: Indian Institute of Management, 2011. Print.

The Alarming Picture of Poverty in India. 24 October 2012. Web. 28 October 2015. <http://www.rediff.com/business/slide-show/slide-show-1-the-alarming-picture-of-poverty-in-india/20121024.htm>.

Tripathl, Amarnath and A. R. Prasad. “Agricultural Development in India Since Independence: A Study on Progress, Performance, and Determinants.” Journal of Emerging Knowledge on Emerging Markets 1.1 (2009): 63-92. Print.

World Bank. Life expectancy at birth, total (years). 2015. Web. 28 October 2015. <http://data.worldbank.org/indicator/SP.DYN.LE00.IN/countries/IN-8S-XN?display=graph>.