As a result of the worldwide pandemic, the CBSE course structure for class 12th economics has been revised and reduced, keeping in mind the disturbances and anomalies caused by the nationwide lockdown of 2020. Economics is an important subject for humanities and commerce students; scoring well in this subject is essential if you wish to pursue higher studies. That is why, in this blog, we will cover the important topic of Developmental Experience of India: A Comparison with Neighbours, class 12 Indian economy chapter 3 notes so that you can prepare better for your 12th boards!
Must Read: Economics Project for Class 12
This Blog Includes:
A Comparison with Neighbours
According to class 12 Indian economy chapter 3 notes, A developmental comparison of experiences of India and its neighbours is extremely important for various reasons:
- It helps nations comprehend their strengths and weaknesses vis-à-vis their neighbours.
- Nations face competition from developed as well as developing nations.
- It is important to study your neighbour’s economic activities because major regional economic activities impact the overall human development of the region.
While all the three nations: India, Pakistan and China began in their developmental path in the 1940s and devised similar developmental strategies for economic growth. All were inspired by the Soviet model of development and adopted their Five Year Plans. The Indian government initiated the Five Year Plan in 1951, following its footsteps, Pakistani government too initiated the Five-year plan (Renamed as the Medium Term Development Plan). China launched its model in 1953. Let us understand Pakistan and China’s development strategies and how different their trajectories have been from India’s.
India and China
In class 12 Indian economy chapter 3 notes, let us first compare India and China and their development process.
- In 1949, the People’s Republic of China was formed. The party aimed to bring development to all the sectors of the economy. Based on socialism principles, the party took ownership of every sector, enterprise, and land in the country.
- In 1958, The Great Leap Forward (Second Five Year Plan) was started to bring industrialisation to the country.
- In urban areas, people were encouraged to have industries in their backyard while the commune system was set up in rural areas. People collectively cultivated land, and in 1958, there were 26, 000 communes.
- There were several drawbacks the campaign faced; a drought that killed 30 million people in China and conflict with Russia which meant that the latter would remove its officials who were there to help with the industrialisation process.
- Mao launched the Great Proletarian Cultural Revolution to revive the economy and the Chinese revolution traditions.
- From 1978 onwards, major reforms were introduced in industries, agriculture, trade, and investment to accelerate economic growth.
- Reforms led to commune lands’ changes were divided into small plots and given to individual households for cultivation. Farmers could use the income generated from the land if they paid the taxes while private enterprises were encouraged to produce goods. The system of dual pricing was introduced, which introduced competition and eventually, once the production increased, Special Economic Zones came about to encourage foreign investors.
Also Read: Class 12 Macroeconomics
India and Pakistan
Moving forward in class 12 Indian economy chapter 3 notes, we compare and study the development path of India and Pakistan.
- There are many similarities between India and Pakistan’s economic development, especially since both adopted the mixed economic model for development.
- In the initial years of the 1950s and 1960s, Pakistan adopted a regulated policy framework. It meant tariff protection for manufacturing consumer goods and direct imports on competing imports.
- Pakistan introduced the Green Revolution changed the agrarian system and led to mechanisation, an increase in public investment in infrastructure, and foodgrains’ production.
- In the 1970s, Pakistan introduced nationalisation of capital goods industries.
- The late 1970s and 1980s saw a major shift in the country’s economic policies as it moved towards denationalisation and encouragement of the private sector.
- Pakistan’s economy depended on monetary help from western and remittances from Pakistani emigrants working in the Middle-east.
- In the 1980s, the country focused on widening the private sector and foreign investments.
Going further in class 12 Indian economy chapter 3 notes, let us compare some of the demographics of India and her neighbours. The important points of comparison are mentioned below.
- In terms of population, Pakistan’s population is very small when compared to India and China.
- In terms of density, China has the lowest population density despite being the largest country.
- In terms of population growth, Pakistan is at the forefront followed by India and China. The poor growth rate and decline in sex ratio in China are largely due to the infamous one-child policy of the 1970s.
- Poor sex ratio is common to all the Asian nations because of the patriarchal nature of these societies.
- The fertility rate is an important demographic indicator. In China, the fertility rate has declined and in Pakistan, it is fairly high.
- Urbanisation is all these countries have unfolded differently, for instance, China has the most number of people living in urban settlements, followed by Pakistan and then India.
Check Out: Nature and Scope of Economics
Economic Growth: GDP and Sectors
According to class 12 Indian economy chapter 3 notes, the GDP and its sectors play an important role in the economic growth of a country.
- China’s performance in terms of Gross Domestic Product is better than the other nations. China has the second-largest GDP in the world.
- In the 1980s, China managed to maintain its GDP in double digits while other developing nations struggled immensely. Pakistan’s GDP growth in the same period was better than India’s, but India has maintained steady growth while China and Pakistan have seen a steady decline.
- When it comes to the agriculture sector contributed to the GDP or Gross Value Added, In case of China, it is 7 per cent while the percentage of the workforce involved is 26 per cent for the year 2018– 19. Agricultural contribution in Indian economy is chalked up at 16% with 43% of Indians involved in the workforce while Pakistan sees 24% contribution from the agriculture sector and 41% citizen involvement in the workforce.
- Industry sector’s contribution to the GVA is significant in all the countries. 24 % of Pakistan’s workforce is engaged in the industrial sector, but it produces 19 per cent of GVA. In India, the industry makes up 25 per cent of the GVA. The industrial sector in China employs only 28% of people, yet its contribution to the economy is immense, at 41%.
- The service sector is the best performing sector, and its contribution to GVA is impressive.
- Both India and Pakistan are making a direct shift from agriculture to the service sector, unlike China, which has made a gradual shift from agriculture to industry and then services.
Human Development Indicators
According to class 12 Indian economy chapter 3 notes, human development is a powerful tool in assessing any country’s growth thus, let us compare these countries’ development in the field.
- China is ahead of India and Pakistan when it comes to various human development indicators.
- China has the best statistics when it comes to income indicators and outranks India or Pakistan’s by a significant margin.
- When it comes to better sanitation, quality education, improved mortality rates, life expectancy or malnourishment, China is at the forefront.
- Pakistan provides better sanitation services and has seen a decline in terms of poverty in the country.
- The number of maternal deaths in India and Pakistan is extremely high.
- All countries have had success in providing improved drinking water sources.
- India has the largest poor population when compared to the two countries.
However, it is important to note that human development indicators are incomplete and limited without the inclusion of ‘liberty indicators’. These are important indicators for assessing the level of democracy, constitutional freedom and rights that the people of a nation enjoy.
Must Read: Difference Between Micro and Macro Economics
Knowing the development strategies of other countries is important because it acts as a guide and helps you learn from their experiences. The various development strategies incorporated in class 12 Indian economy chapter 3 notes are mentioned below.
- Unimpressive growth rate and slow development of the Chinese economy aggravated the new leaders of China. They deemed the Maoist vision of economic development as ineffective and outdated and launched structural reforms in 1978, resulting in positive growth in the country.
- While in Pakistan, the reforms had an opposite impact. They worsened the economic indicators and the economy. The reason for this was the re-emergence of poverty, low foreign exchange earnings, dependency on foreign aid and agricultural dependency on a good harvest rather than technology.
So, this was all about the class 12 Indian economy chapter 3 notes. Hopefully, this blog covered all the essential points and was great for a quick revision. If you feel overwhelmed about your career prospects, post 12th or wish to study abroad then get in touch with Leverage Edu and clear all your doubts! Sign up for a free session today!