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International Referred Research Journal, January, 2012, ISSN- 0975-3486, RNI : RAJBIL 2009/30097, VOL- III * ISSUE 28

IntroductionIndia became only the second country in the

world after China to cross the one billion mark. Thepopulation of the country rose by 21.34 % in 1991 -2001,"Population in itself is NOT the problem. Lackof basic education and poor economic conditions arethe main factor for growth of population. The fast rateof growth of population has affected the quality of lifeof the people. The time has come when future citizens

while in educational institutions should understandvarious issues related to the population problem. "Thebirth rate in India (31 per thousand people) is greaterthan that of China (20 per thousand people). If thistrend continues, India will beat up China by 2025.A.D.

India has been slow to urbanize. As of 2010,30 per cent of India's population is conservatively clas-sified as ?urban'. This is much lower than in othermajor developing countries, e.g. 45 per cent in China,54 per cent in Indonesia, 78 per cent in Mexico, and87 per cent in Brazil. All these countries have muchhigher per capita incomes but differences in the defi-nition of ?urban' also contribute to India's low level ofurbanization, If villages with more than 10,000 per-sons in India were to be classified as ?urban', thiswould imply a level of urbanization in India in 2010of over 35 per cent, but it would still be much lowerthan in other countries. Structural transformation istypically associated with urbanization during the pro-cess of economic growth, and India is no exceptionHowever, the relatively high growth phase of the In-dian economy since the beginning of the 1980s hasbeen associated with less urbanization than would benormally ?expected'.

The urban share of the gross domestic prod-uct (GDP) for the Indian economy is not available ona regular and consistent basis, and the underlying data

base for estimating this share is very weak. Estimatesby the Central Statistical Organization (CSO), avail-able for a few years, indicate that this share increasedfrom 37.7 per cent in 1970-71 to 52 per cent in 1999-2000. The Mid-Term Appraisal of the Eleventh FiveYear Plan puts the urban share of GDP at 62-63 percent in 2009-10. The document further projects thisshare to increase to 75 per cent in 2030.India is one ofthe fastest growing economies in the world today. After

Research PaperCommerce

January, 2012

Population Growth In India AndIts Impact On Indian Economy

* Dr. Sushama Deshmukh

* Associate Professor ,HOD of Commerce Dept. Mahila Mahavidyalay, Amravati

recording a growth rate of 5.5 per cent per annumduring 1981-2001, there was further acceleration inGDP growth to 7.7 per cent per annum during2001-11.The economy has weathered the impact of the globalslowdown of 2008 much better than most and is wellon its way to resuming its journey to 8-9 per cent perannum GDP growthEconomy of India

The Economy of India is the ninth largest in

the world by nominal GDP and the fourth largest bypurchasing power parity (PPP) The country is one ofthe G-20 major economies and a member of BRICS,and ASEAN. The country's per capita GDP (PPP) was$3,408 (IMF, 129th in the world) in 2010, making ita low-Income country. India recorded the highestgrowth rates in the mid-2000s, and is one of the fastest-growing economies in the world. The growth was ledprimarily due to a huge increase in the size of themiddle class consumer population, a large workforcecomprising skilled and non-skilled workers, goodeducation standards and considerable foreign invest-ments. India is the seventeenth largest exporter and

eleventh largest importer in the world. Economicgrowth rates are projected at around 7.5%-8% for thefinancial year 2011-2012.Challenges before Indian economy:1. Population explosion: According to 2001 census ofIndia, population of India in 2001 was 1,028,610,328,growing at a rate of 2.11% approx. Such a vast popu-lation puts lots of stress on economic infrastructure ofthe nation. Thus India has to control its growing popu-lation.2. Poverty: As per records of National Planning Com-mission, 36% of the Indian population was living BelowPoverty Line in 1993-94. Though this figure has de-creased in recent times but some major steps are neededto be taken to eliminate poverty from India.3. Unemployment: The increasing population is press-ing hard on economic resources as well as job oppor-tunities. Indian government has started various schemessuch as Jawahar Rozgar Yojna, and Self EmploymentScheme for Educated Unemployed Youth (SEEUY).But these are proving to be a drop in an ocean.4. Rural urban divide: It is said that India lies in vil-lages, even today when there is lots of talk going about

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International Referred Research Journal, January, 2012, ISSN- 0975-3486, RNI : RAJBIL 2009/30097, VOL- III * ISSUE 28migration to cities, 70% of the Indian population stilllives in villages. There is a very stark difference inpace of rural and urban growth. Unless there isn't abalanced development Indian economy cannot grow.These challenges can be overcome by the sustained

and planned economic reforms.Rural population and their development

Over seventy per cent of India's populationstill lives in rural areas. There are substantial differ-ences between the states in the proportion of rural andurban population, Such as varying from almost 90 percent in Assam and Bihar to 61 per cent in Maharashtra.Agriculture is the largest and one of the most impor-tant sectors of the rural economy and contributes bothto economic growth and employment. Its contributionto the Gross Domestic Product has declined over thelast five decades but agriculture still remains the sourceof livelihood for over 70 per cent of the country's popu-

lation. A large proportion of the rural work force issmall and consists of marginal farmers and landlessagricultural labourers. There is substantial underemployment among these people; both wages andproductivity are low. These in turn result in poverty; itis estimated that 320 million people are still livingbelow the poverty line in rural India.

Though poverty has declined over the lastthree decades, the number of rural poor has in factincreased due to the population growth. Poor tend tohave larger families which puts enormous burden ontheir main resources, and prevent them from breakingout of the shackles of poverty. In States like Tamil

Nadu where replacement level of fertility has beenattained, population growth rates are much lower thanin many other States; but the population density ishigh and so there is a pressure on land. In States likeRajasthan, Uttar Pradesh, Bihar and Madhya Pradeshpopulation is growing rapidly, resulting in increasingpressure on land and may be result land fragmenta-tion. Low productivity of small land holders leads topoverty, low energy intake and under nutrition, andthis, in turn, prevents the development thus creatinga vicious circle. In most of the states non-farm employ-ment in rural areas has not grown very much andcannot absorb the growing labour force. Those whoare getting educated specially beyond the primary level

may not wish to do manual agricultural work. Theywould like better opportunities and more remunera-tive employment. In this context, it is imperative thatprogrammes for skill development, vocational train-ing and technical education are taken up on a largescale in order to generate productive employment inrural areas. The entire complete range of existingpoverty alleviation and employment generation

programmes may have to be restructured to meet thenewly emerging types of demand for employment.Rural poor have inadequate access to basic minimumservices, because of poor connectivity, lack of aware-ness, inadequate and poorly functional infrastructure.

There are ongoing efforts to improve these, but withthe growing aspirations of the younger, educated popu-lation these efforts may prove to be inadequate to meetthe increasing needs both in terms of type and qualityof services. Greater education, awareness and betterstandard of living among the growing younger agegroup population would create the required conscious-ness among them that smaller families are desirable;if all the felt needs for health and family welfare ser-vices are fully met, it will be possible to enable themto attain their reproductive goals, achieve substantialdecline in the family size and improve quality of life.

Structural transformation is typically associ-

ated with reduced dependence of the population onagriculture and increased migration from low-produc-tivity agriculture to high-productivity sectors of in-dustry and services in search of employment. Sincethese sectors are based in urban areas, rapid economicgrowth is normally associated with urbanization. TheIndian experience of economic growth and structuraltransformation in the period 1980-2005 (for whichemployment data are also available by sector), how-ever, is associated with only a moderate decline in theshare of agriculture in total employment in the economy.

Table 1.1 Growth Rates of GDP at Constant Prices*(Per cent per annum)

Year Agriculture Industry Construction Services GDP

1951-61 3.1 6.1 6.8 4.2 3.91961-71 2.5 5.4 5.6 4.8 3.81971-81 1.8 4.4 3.3 4.4 3.21981-91 3.5 6.7 4.7 6.6 5.41991-01 2.8 5.7 5.1 7.3 5.62001-11 3.1 6.9 10.0 9.4 7.7

2001-02 6.3 2.4 4.0 7.2 5.82002-03 -7.2 6.8 7.9 7.5 3.82003-04 10.0 6.0 12.0 8.5 8.52004-05 0.0 8.5 16.1 9.1 7.52005-06 5.8 8.1 16.2 10.6 9.52006-07 4.0 10.7 11.8 11.2 9.72007-08 4.9 7.4 10.1 10.9 9.02008-09 1.6 2.6 7.2 9.7 6.72009-10 0.4 8.3 7.0 10.1 8.0

2010-11 5.4 8.2 8.0 9.6 8.6Source: CSO.

The decline in the agricultural sector's share in em-ployment in the 1980s was very small, and even in thedecade from 1993-94 to 2004-05 when it was faster,the share only fell from 64 per cent to 52 per cent. Theindustrial sector failed to exercise a pull away fromagriculture as the share of industry in total employ-ment in the economy actually decreased, contrary to

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International Referred Research Journal, January, 2012, ISSN- 0975-3486, RNI : RAJBIL 2009/30097, VOL- III * ISSUE 28

what would be expected in any normal process of eco-nomic growth. Services were the principal sector re-cording a sharp increase in the share of total employ-ment. Since GDP growth was coming from highlyskilled services such as information technology (IT),

telecom, and banking, or from sophisticated manufac-turing industries like engineered goods and pharma-ceuticals, it did not draw much labour from rural ar-eas. Overall, the growth of urban population whichhad already decelerated from 3.9 per cent per annumin the 1970s to 3.2 per cent per annum in the 1980s,further slowed down to 2.8 per cent per annum in the1990s .Urbanization and Economic Growth

Only 30 per cent of India's population livesin urban areas. This is much lower than in China,Indonesia, South Korea, Mexico, and Brazil. Some ofthis may be due to much lower per capita incomes in

India. The Committee's projections suggest that India'surban population as presently defined will be close to600 million by 2031, more than double that in 2001.Already the number of metropolitan cities with popu-lation of 1 million and above has increased from 35 in2001 to 50 in 2011 and is expected to increase furtherto 87 by 2031. The expanding size of Indian cities willhappen in many cases through a process of peripheralexpansion, with smaller municipalitiesand large villages surrounding the core city becomingpart of the large metropolitan area, placing increasingstrain on the country's urban infrastructure. Futuregrowth is likely to concentrate in and around 60 to 70

large cities having a population of one million or more.Decentralization of municipal governance and greaterreliance on institutional financing and capital mar-kets for resource mobilization are likely to increase thedisparity between the larger and smaller urban cen-ters. A satisfying outcome will depend on the formu-lation of effective public policies to accelerate all-rounddevelopment of smaller urban centers and to refashionthe role of the state as an effective facilitator to com-pensate for the deficiencies of market mechanisms inthe delivery of public goods.

Three decades of rapid economic growthwould normally have propelled migration from ruralareas but growth in India has not had this effect thus

far. This is because industrialization has been capitalintensive and the services boom fuelled by the knowl-

edge economy has also been skill intensive. A few cit-ies of India have acted as centers of knowledge andinnovation. As more cities provide economies of ag-glomeration and scale for clusters of industries andother non-agricultural economic activity, the urban

sector will become the principal engine for stimulat-ing national economic growth. Industrialization willabsorb more people as India advances further in itsintegration with the world economy. At the presentjuncture, India faces the challenge of continuing on itshigh growth trajectory while making growth morebroad-based and labour-intensive. The fortunes of theagricultural sector are crucially linked to the mannerin which growth in the industry and services sectorsunfolds. People living in rural areas typically tap theopportunities that cities provide for employment, en-trepreneurial avenues, learning, and monetary repa-triation. As urbanization grows, demand for food items

other than food grains, i.e. vegetables, lentils, milk,eggs, etc., also grows. This leads to investments ininfrastructure, logistics, processing, packaging, andorganized retailing. These investments and other eco-nomic inter-linkages connect and build synergy be-tween rural and urban centers. Of course, governmentpolicy should also focus on enhancing the productivepotential of the rural economy. From the report, thatIndia's urban future promises to be an inclusive one,with the benefits extending to rural areas as well. Al-ready, there is evidence to suggest that rising standardsof living in India's urban areas in the post-reform pe-riod have had significant distributional effects favor-

ing the country's rural poor.SummaryPopulation, which is engaged in any economic

activity (employed persons) and population seekingwork (unemployed) constitute Labour Force. India hasthe second largest labour force in the world. Projectionof labour force is pre-requisite ensuring optimal uti-lization of available human resources. Manpower de-velopment is then taken up to provide adequate labourforce, of appropriate skills and quality to different sec-tors so that there is rapid socioeconomic developmentand there is no mismatch between skills required andskills available. Planning also attempts to provideenabling environment for employment generation (both

self employment and wage employment) in public,private and voluntary sectors in urban and rural areas.

1. Anoop Kumar-Report of the Committee on India Vision 2020 2. Report on Indian Urban Infrastructure and Services March 20113. EconomicSurvey of India 20114. Indian Economy Since Independence 19th ed.Editor : Uma Kapila

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