LESSON 1 MEANING OF UNDERDEVELOPMENT

LESSON 1 MEANING OF UNDERDEVELOPMENT --Neha Gupta The term underdevelopment refers to that state of an economy where levels of living of masses are extremely low due to very low levels of per capita income resulting from low levels of productivity and high growth rates of population. Underdeveloped countries are now known as developing countries signifying that such nations are capable of and are indeed making serious efforts to overcome their problems of poverty and low income. U.N. Classification According to the United Nations definition, an underdeveloped country is one which has a real per capita income that is lower in relation to the real per capita income of the USA, Canada, Australia and Western Europe. Emphasis here is on the low income level relative to the advanced countries and lack of any perceptible success in making substantial improvements in quality of life of the masses. In simple words, underdeveloped country is just another name by which a poor backward country is known. Basic Characteristics of the Indian Economy as Developing Economy India is a low income developing economy. There is no doubt that one-fourth of its population lives in pathetic condition. It is important to understand the basic characteristics of the Indian economy, considering it as one of the poor but developing economics of the world. 1. Low per capita income. The level of income as measured by per capita real GNP is very low in underdeveloped countries. The per capita income of India in 2005 was $ 720 except for few countries; the per capita income of the Indian people is the lowest in the world. During 1990-2005, Indian economy has grown at a faster rate than the developed economics. Even then the difference in per capita income between India and the developed economy is quite large. For example in year 2002, per capita GNP as measured in us dollars was $ 480 in India as compared to $35060 for USA, $ 25250 for UK. 2005 Exchange Purchasing power rate base parity basis Switzerland 54,930 37,080 USA 43,740 41,950 Japan 38,980 31,410 Germany 34,580 29,210 U.K. 37,600 32,690 India 720 3,460 China 1,740 6,600 Source: Complied from World development report(2007) Low income results in lower living standards, poor diet, malnutrition, inadequate housing and virtual absence of health facilities leading to high incidence of disease, high infant mortality, 1

poor health, widespread illiteracy, and low expectancy of life. In brief, quality of life is extremely poor in less developed countries as compared to the developed nations. 2. Low level of living Since about three-fourth of world population lives in underdeveloped countries which have less than one-fifth share in world income, it is obvious that a vast majority of people in these countries must be living under conditions of poverty, malnutrition, disease, squalor, illiteracy, etc. even basic necessities of subsistence such as minimum food, clothing and shelter are not easily accessible to the poor masses. In 1999 the average calorie intake of food is only 2,496 as compared to over 3,400 calories per day in most developed countries. Nearly, 28 percent of the population of India lives below the poverty line in 2004-2005. According to world developing indicators, 46 percent of the child population in India suffers from malnutrition. The average protein content of the Indian diet is only 59 grams per day as against more than double the level in developing countries. According to censes of 2001, only 36 per cent of the household had access to safe drinking water, implying tap water. It is one of the reasons for the low level of efficiency of the Indian workers. Conditions of housing facility are equally bad. According to census report of 2002, only about 52 per cent of the household were living in the permanent houses, about 30 per cent living in semi-permanent house and 18 per cent were living in temporary houses. The condition of housing is much worse in rural areas than the housing facility in urban areas. The working group on housing for the tenth plan has observed that around 90 percent of the housing shortage pertains to weaker sections. The government should take big step to make a programme for housing for the weaker sections. Another very revealing fact of the census (2001(is that 34.5 per cent of household did not own any of the specified assets, i.e., radio, Transistor, television, telephone, bicycle, scooter. The reasons for this mass poverty and low living standards in India are found in their slow growing economics and rapidly growing population. 3. High rate of population growth Low productivity combined with high growth rates of population is largely responsible for low income and poor living standards. High growth rate of population means more people to be fed, clothed and provided other necessary goods year after year. In India rate of growth of population which was about 1.31 per cent per annum during 1941-50 has risen to 1.93 per cent during 1991-2001. The annual average rate of growth of population during 2000-05 has further decline to 1.5 per cent. The chief cause of this change is due to declined in birth rate from 49 per thousand during 1911-20 to 24.8 per thousand in 2005. The fast rate of growth of population necessitates a higher rate of economic growth in order to maintain the same standard of living of the population. The requirements of food, clothing, shelter, medicine, schooling etc. all has to rise. However, a rising population leads to an increase in the labour force. The rapid growth of labour force creates a higher supply of labour than its demand leading to unemployment. 4. High levels of unemployment and underemployment Unemployment levels are high in the underdeveloped countries. Due to lack of capital and low level of development in various economic sectors. Thus, countries have not been able to make fuller use of their labour force. On the other hand, rapidly increasing population leads to a sharp rise in labour force, and low level of economic activity fails to absorb this addition to 2

labour supply. In India labour is an abundant factor which is difficult to provide gainful employment to the entire working population. Moreover, in the agriculture sector of the Indian economy, a much larger number of labourers are engaged in production than are really needed. The marginal product of labour in agriculture is almost negligible; it may be Zero or might be negative. Thus there exists disguised unemployment in agriculture sector. Disguised unemployment in rural areas is the result of heavy pressure of population on land and the absence of alternative employment opportunities in our villages. The planning commission on the basis of the NSS data has estimated that at the beginning of the tenth plan is 2001-02, on the current daily basis, 35 million persons were unemployed. The unemployed and under-employed together, they account for 9.21 per cent of the labour force. Moreover, 35 million persons will be added to the labour force during 2002-2007. Thus, the provision of employment to those suffering from open unemployment and under- employment becomes a major task of the planning process in India. 5. Predominance of agriculture in the economy Since majority of people (around 80 per cent of total population) live in rural areas and work in agriculture, this is the biggest source of employment and biggest contributor to national income. In India, in 2004 about 58 per cent of the working population was engaged in agriculture and its contribution to national income was 21 per cent. It means that two-thirds to more than four-fifths of the population earn their livelihood from agriculture but in Latin American countries from two-thirds to three- fourth of population depends on the agriculture. This can be explain better in figures which are as follows: Percent of active population engaged in agriculture and industrial origin of GDP in 2004 Country Active Industrial origin of GDP population percentage distribution engaged in agriculture agri. Industry services U.K. 1 1 26 73 U.S.A. 4 1 22 77 Japan 5 1 31 68 Thailand 45 10 44 46 Pakistan 52 22 25 53 China 47 13 46 41 India 58 21 27 52 The reason of predominance of agriculture in the developing countries is that the low income people spend a larger part of their income on food and other agriculture products which are the most basic necessities. Not much income is left for spending on non-agricultural goods. From the point of view of occupational pattern, the Indian economy is primary producing because agriculture contributes 21 percent of national income while 58 per cent of the labour force is engaged in agriculture. 3

6. Low rate of capital formation Another one of the basic characteristic of the Indian economy is the existence of capital deficiency. Capital deficiency is an important characteristic of underdeveloped economy. Capital formation or investment is low in India, low capital formation leads low productivity which leads to low incomes and the low income leads to low saving, and then low saving leads to low rate of capital formation. Thus it forms the vicious circle of poverty. Table shown below reveals that gross capital formation in India was less than that of developed countries. India needs to keep its gross capital formation as high as possible in order to cover depreciation and maintain the same level of living. Gross capital formation and gross domestic saving as per cent of gross domestic product Country Gross capital Gross domestic Formation Saving 1990 2003 1990 2003 U.S.A. 18 18 16 14 U.K. 20 16 18 13 Japan 33 24 34 26 Germany 24 18 24 22 China 35 44 38 47 India 24 24 23 22 7. Maldistribution of wealth/assets RBI survey of assets of rural and urban households for the period July 1991 to June 1992 brings out the existence of sharp inequalities in asset distribution. In rural areas 27 per cent of households owing less than Rs. 20,000 worth of assets accounted for 2.4 per cent of total assets. This implies that nearly 51 per cent of the bottom households owned just 10 per cent of total assets. As against it, 9.6 per cent of the total assets worth Rs. 2.5 lakhs and above accounted for nearly 49 per cent of total assets. Percentage distribution of households and assets in India (1991-1992) Rural (%) urban (%) Asset Group households assets households assets Less than Rs. 20000 27.0 2.4 33.5 1.4 Rs 20,000- Rs 50,000 23.8 7.5 17.2 3.9 Rs 50,000- Rs 1,00,000 20.9 14.0 16.0 8.0 Rs 1,00,000-Rs 2,50,000 18.8 27.3 19.0 20.8 Rs 2,50,000 & above 9.6 48.8 14.2 65.8 All Classes 100.0 100.0 100.0 100.0 Inequality in asset distribution is the principal cause of unequal distribution of income in the rural areas. It also signifies that the resource base of 50 per cent of the households is so week that it can hardly provide them anything above the subsistence level of income. This finding of 4

the reserve bank is also supported by the National Sample survey which reveals that 60 per cent of the poor rural households owned only 9.3 per cent of area. 8. The socio-economic indicators of consumption are characteristic of underdeveloped economy in India Underdevelopment also finds expression through several socio-economic indicators, such as per capita intake of calories, fats and protein, population per TV set and physician. In the table below for selected countries indicate that India is far behind the developed countries so far as these indicators of standard of living are concerned. Illiteracy rate is also very high in India- 35% in 2001, as against less than 5 per cent in developed countries. Socio-economic indicators of standard of living (1999) Country Per capita daily intake Per 1000 persons Fats Protein calories TV Physician (gms) (gms) sets (1998) India 45 59 2,496 69 0.4 China 71 77 2,897 272 2.0 Japan 83 96 2,932 707 7.3 USA 143 112 3,699 847 2.5 UK 141 93 3,276 645 1.5 As a developing economy, during the last over five decades of development, India has been able to improve its GDP growth rate which was only 3.5 per cent during 1950-51 to 1970-71 to a level of nearly 7 percent during 2000-01 to 2004-05. However, human development report (2005), India ranks at No. 127 in the world. Its record in terms of removing malnutrition is poor, as 46 per cent of the child population suffers from it. According to 2001 census, only 52 per cent of the population has access to safe drinking water. Although poverty has been reduced to a level of 26 per cent, but still 260 million persons are still poor and the burden of poverty is quite massive. The rate of unemployment at a level of 9.2 per cent in 2001-02 is very high. To sum up, Indian economy has made commendable progress on many fronts, but it has miles to go to remove poverty, malnutrition and providing shelter and drinking water to its entire population. 5

LESSON 2 UNIT III: POPULATION POPULATION AND ECONOMIC DEVELOPMENT Studying this chapter should enable you to understand: Theory of Demographic Transition Demographic Profile of India Population Growth and Economic Development Population Policy of India - Dr. Anupama Rajput Introduction The size and composition of a country s population can exert a powerful influence on a country s development. The population size, composition, and distribution influence the range of industries a country can support and the pool of talent that are available in the country. In size of population, India is the second largest country in the world after China, constitutes 2.4 per cent of the world s land area and supports 16.25 per cent of the world s population. The population growth in India has proved to be more an obstacle to its development efforts rather than a contributory factor in economic growth. Theory of Demographic Transition The theory of demographic transition states the impact of economic development on the population growth of a country. The earliest systematic discussion on the theory of population growth is provided by Malthus in 1798. Malthus stated that population growth always exceeds the growth of means of subsistence and warned that the uncontrolled population had to be corrected by nature which would be very painful. Economists however, argued that the population growth is a transitory phenomenon that is explained by the theory of Demographic transition. According to this theory there are three distinct stages of population growth: First Stage: High Birth-Rate and High Death-Rate In the first stage of population growth, the birth rate and death rate are high. This keeps population growth as low. The economy during this stage is underdeveloped with low level of income. The high birth-rate occurs due to traditional religious beliefs, agrarian economic structure, wide spread illiteracy, absence of awareness about family techniques, early age of marriage, attitude towards children and family size etc. The large size of family is expected to provide economic advantage as children contribute at an early age and considered as traditional source of security in the old age of parents. The death rate on the other hand is also high mainly due to ill nourished diet, lack of sanitation and medical facilities. The famines and epidemics also caused high death rates. During this stage the population remains low; however the potential for the population rise is very large due to high birth rate. 6

Second Stage: Falling Death Rate and High Birth Rate At this stage the death rates start falling rapidly but birth rate remains stable. The rapid decline in death rate occurs due to improved economic development that result in the availability of better food, adequate clothing, housing, improved medical and public health facilities, greater awareness about health and hygiene. The birth rate in this stage remains at high levels mainly because of factors such as better education, change in attitude towards family size and increasing level of urbanization take time to show results. In fact, the high growth potential of the first stage is realized in the high actual growth. The high birth rate and falling death rate contributes to the rapid population growth. The second stage is also termed as the stage of Population Explosion. Third Stage: Low Birth-Rate and Low Death Rate During this stage, the economic development process transforms the country from agrarian to industrialized economy accompanied by the fast urbanization. The birth rate witness a fall as problems of urbanization such as housing problem, increased cot of living etc., compel people to follow small family norms. Further, the expansion of education causes attitudinal changes and the advantage of small family is recognized. Since death rate remained quite low and birth rate falls steadily this stage is characterized by slow population growth rate. The theory of demographic transition explains the transformation of traditional high birth and death rate economy into low birth and death rate economy. Population and Economic Development According to the neo-classical growth model, population is beneficial to an economy due to the fact that population growth is correlated to technological advancement. Rising population promotes the need for some sort of technological changes in order to meet the rising demand for certain goods and services. The shortage in goods and services caused by the high demand for products and services, force up prices for the natural resources. The increased prices will trigger a search for new ways to satisfy the increasing demand in order to meet expectations. Sooner or later new sources and innovative substitutes will be found. The new discoveries lead to cheaper natural resources that existed before the increase in population and the demand for new goods and services begin. Further, with the increased populace, economies are blessed with a large labor force, making it cheaper. An increase in labor availability and a low cost for labor results in a huge rise in employment as businesses are more inclined to the cheap labor. Low labor costs results in a shift of money usage from wages into advancement through technology. According to this model, the technological advancement that accompanies the growth of population and the expansion of population, allows for even more population to survive due to the rise in overall outputs by the business and the nation as a whole. Thus, it generates demands for goods and results in improved economic growth. Other economists oppose the theory that population growth has a positive effect on economic growth. Basic theory surrounding population growth in less developed countries states that the growth of a populace may eventually lead to overpopulation, which results into problems relating to food, education, health, housing, and employment. The more heads there are in a nation means there are more mouths to feed. This begins with Malthus theory of diminishing returns when it comes to resources and food. Malthus states that either people 7

practice continence or they breed themselves into starvation. Population is said to be negative once productivity and output are less than demand. The negative impact of over-population on the economic development can be studied as under: Population Growth and Saving Effects The population growth reduces saving rate as the dependency burden increases. The high birth rate and low death rate causes the increase of the proportion of non-working population relative to the working population. This results into an increase of consumption without corresponding increase of output and fall in saving rates. Even if productivity rises the saving rate is likely to be lower had the population growth is lower. Population Growth and Composition of Investment Effects The increased population growth requires an increased amount of investible resources to be devoted towards creation of unproductive social or population sensitive facilities such as education, housing health and other civic amenities. Robert Cassen raised doubts on the validity of the saving and investment effects and argued that saving in the developing nations mainly come from the rich wealthy class whose fertility is low. The cost of additional children in the poor family is met out of the consumption expenditure rather than savings. In other words the saving cost of additional children is very low in the poor countries. According to Cassen, food production in fact is the least postponable expenditure of all population related output needs. An increase in population increases the focus on agriculture especially food production. If the food production can be increased by labour using means then the population increase will feed itself. However, a point is reached where required increases in agricultural output necessitated the additional capital resources (like improved technology, irrigation facilities, scientific methods, seeds etc) to increase output as there is a limit to which land acreage can be increased. In that case the increasing share of investible surplus will be taken up by food needs of growing population. The increased amount of welfare and agriculture investment thus reduces the resources available for productive infrastructure required for increasing output. The composition of investment effect thus suggests that the more capital and resources would have been available for increasing output if population growth is lower because of reduced welfare and agriculture expenditure. Population Growth and Capital Constraints The rising population accompanied by a rise in the labor force brings to fore the capital constraint in raising the labor productivity. The capital requirement of equipping labor force is very large. The low saving rate puts capital constraints for technological advancements and modernization resulting into reduction in the labor productivity. In other words, there exist diminishing returns to labor as the stock of capital, including land, does not increase in the same proportion as does labor. Population Growth and Unemployment The rising population resulted into large scale of unemployment because of failure of the secondary and tertiary sectors to expand the enough employment opportunities. The labor expansion also puts pressure on the land which is important natural resource in the agrarian economy and leads to underemployment and disguised unemployment. 8

Population Growth and Environmental Degradation The rapid increase in population causes increased and unscientific exploitation of resources. This type of exploitation of resources creates obstacles in sustainable development. The problems of slums and insanitation develop due to increase in urbanization. Pollution of environment also causes different types of communicable diseases. This has placed a heavy financial commitment on the primary healthcare scenario for the government and the economy. If population is controlled properly, these funds can be utilized for other productive developmental activities. In short, population growth has to be checked so as to face the challenges raised by population explosion in the economic field. Demographic Profile of India 1. Size and Growth rate of Population: India, currently the second most populous country in the world, has around 17 percent of world s population in less than three percent of earth s land area. India began the 20th century with the population about 238 million and by 2000 it ended up with 1 billion. While the global population has increased threefold during the last century, from 2 billion to 6 billion, India has increased its population nearly five times during the same period. India s population is expected to exceed that of China before 2030 to become the most populous country in the world. Table1 indicate that the population growth in India has not been uniform. The trends are as follows: Till 1921, the population growth was irregular and slow. The population grew continuously and rapidly afterwards. Since 1951, India is passing through a period of population explosion. The improved economic development process has brought in a sharp decline in death rate. Better healthcare facilities, improved nutritional standards, control over epidemics, etc., have all contributed to sharp decline in death rate while birth rate has not shown a similar corresponding decline. The 1991 census of population showed that the growth rate had witnessed slight decline from 24.66 percent in the decade 1981-91 and further to 21.34 percent in 1991-2001. This decadal growth (i.e. of 21.34 percent) is the sharpest decline in population growth rate witnessed since independence. Table 1: Population Size and Growth in India (1901-2008) Census year Population (000s) Growth over decade (Percent) 1901 238.397-1911 252.09 5.7 1921 251.32-0.3 1931 278.98 11.0 1941 318.66 14.2 1951 361.08 13.3 1961 439.24 21.6 9

1971 548.16 24.8 1981 683.33 24.7 1991 846.42 23.9 2001 1,028.74 21.5 2008 1,149.33 - Source: Census of India (Various Years) & World Population Data Sheet, 2008 2. Birth Rate and Death Rate: India is in the middle of demographic transition. The death rate has declined sharply but birth rate though falling is quite high thus causing a rapid population growth. At present the annual growth rate of India s population is 2.4 per cent. The analysis of Table 2 showing the birth and death rates since 1951 clearly indicates that there has been some decline in the birth rate. In the same period, the death rate has, however, declined significantly. Improved medical facilities, epidemics control, better education facilities, reduction in poverty, fall in infant mortality rates, maternal mortality rates have caused the fall in the death rates. The fall in birth rate however has been moderate since the socio-economic conditions favor a larger family in India. The fertility rate in India has declined substantially form 5.7 per woman in 60 s to 2.8 in 2008 (Table 4) Table 2: Crude Birth and Death Rates (1951-2008) Year Birth Rate Per 1,000 Persons Death Rate Per 1,000 Persons 1951 30.9 27.4 1961 40.9 22.8 1971 41.1 18.9 1981 33.9 12.5 1991 29.5 9.8 2001 25.8 8.5 2008 24 8 Source: Census of India (Various Years) & World Population Data Sheet, 2008 3. Age Composition of Population Indian age distribution continues to be young with children under age 15 and working group together forming 73 percent (i.e. more than two-third) of the total population in 2001 (Table3).The young population virtually guarantees further growth, as these young people produce their own families. But at the same time India has a big working group population (around 63 percent). Economist refers this as demographic dividend. As outside of this age group very few people work, it is reasonable to think of the remainder, as the "dependent population". A nation's "dependency ratio" is the ratio of the dependent population to the working-age population. In the case of India this turns out to be 0.6. It is predicted that this ratio will witness a sharp decline. Since fertility is falling, the bulge of young people (population in the age group of 0-14 years) would move into the working-age category. And, since, at that time, the relative number of children will be small (thanks to the lowered fertility), India's dependency ratio would be lower. It is expected that, in the year 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan; and, by 2030, India's dependency ratio should be just over 0.4. The direct benefit of demographic dividend is that this would lead to a rise in 10

the population engaged in productive activity. A more indirect but vital benefit for the economy is the increase in savings as decline in the nation's dependency ratio is usually associated with a rise in the average savings rate. Table 3: Structure of India s Population by Age Groups (1961-2008) Age Group Year 0-14 15-60 60 & above 1961 41.0 53.3 5.7 1971 41.4 53.4 5.2 1981 39.7 54.1 6.2 1991 36.5 57.1 6.4 2001 35.6 58.1 6.3 2008 32 63 5 Source: Census of India & World Population Data Sheet, 2008 4. Sex Composition of Population One of the most striking features of India s population profile is its abnormally low ratio of females to males. This ratio has been consistently less than one. Further, the ratio has registered a significant decline from 0.946 in 1951 to 0.933 in 2001 (Table 4).The basic reason for adverse sex-ratio is that there is strong preference for sons in India due to socio-economic reasons such as sons are regarded as a source of future income and old age security, certain ritualistic rites on certain occasions that are expected to be performed by sons etc. The other explanation is the abortion of female fetuses. While abortion has been legal in India since 1972, sex-selective abortion has been illegal since 1994. However, the government has not effectively enforced the ban. The practice has increased, especially in wealthier states, such as Haryana and Punjab. 5. Qualitative Aspects of Demography in India: The quality of population can be judged from the level of literacy and life expectancy of people in the country. Literacy is an indispensable means for effective social and economic participation, contributing to human development and poverty reduction.notwithstanding the revised definition during census of literacy the literacy rate has improved substantially from 28.3 percent in 1961 to 68 percent in 2008. Since 1961, the life expectancy at birth has increased from 41.2 years to 65 years in 2008 mainly due to much better access to medicine and healthcare. Table 4: Vital Statistics in India Year Life Expectancy at Birth (in years) Literacy Rates (in percent) Total Fertility Rate (per woman) Infant Mortality Rate Sex Ratio 1961 41.2 28.3 5.8 146 941 1971 46.4 34.5 5.7 129 930 1981 54 41.4 4.5 110 934 1991 61 52.2 3.6 80 927 2001 63 65.4 3.1 58.5 933 2008 65 68 2.8 57 na 11

NA: Not Available. Source: Census of India & World Population Data Sheet, 2008 6. Population Density: Density of population is expressed as number of persons per unit of area. It helps in getting a better understanding of the spatial distribution of population in relation to land. The density of population in India (2001) is 313 persons per sq km and ranks third among the most densely populated countries of Asia which has increased to 350 in 2008 (World Population Data Sheet, 2008) There has been a steady increase of about 200 persons per sq km over the last 50 years with the density of population of 117 persons/ sq km in 1951. Causes of the Rapid Growth of Population In India there are two possible causes of an increase in the population: (i) (ii) High Birth Rate and Low Death/ Mortality Rate Causes of High Birth Rate The birth rate in India has not declined significantly due to the number of socio-economic factors: Economic Factors The economic factors prominent amongst the determinants of population growth are discussed as follows: 1. Poverty The economic cost of bearing and upbringing an additional child is less than the expected benefits for a poor family. An additional child in the family would mean more earning hands as the children start earning at a very early age and prove to be an asset for the family. Further, the high infant mortality rate among poors because of deficient diet, lack of medical facilities, unhealthy living conditions, etc causes the low survival rate. In order to ensure that some children survive, poor people tend to have large number of children. 2. Predominance of Agriculture The agrarian country like India adopts primitive techniques of production which is mainly family based. Thus an additional child in the family can always be absorbed on the family land. 3. Slow Urbanization Process In India the process of urbanization has not been accompanied by the social change that favors low birth rates. The social system and family structure of rural life seem to survive in the city and towns. Social Factors The social factors have contributed significantly to the high birth rate in India. These factors are discussed as follows: 1. Universality of Marriage Marriage is both a religious and a social necessity in India especially among women. The universal marriage among women directly leads to high birth rate. 12

2. Early Marriage of Women The marriage of girls take place in early years of youth, and sometimes even in childhood. This causes an increase in the fertility rate as women tend to have greater reproductive time span in case of early marriage. 3. Religious and Social Superstitions Most Indians on account for religious and social attitudes prefer sons because of the belief that certain rites can be performed only by him and none else. Son is also looked upon to provide continuity to family lineage. This desire contributes to high birth rate. 4. Lack of Social Security The social security schemes like old age pension, health insurance etc are not available to the poor masses in India. The children are expected to look after parents in the old age. The larger family is seen as a greater security for the parents. 5. Illiteracy and Ignorance The widespread illiteracy among people in general and women in particular has caused ignorance about benefits of small family size and the use of devices of birth-control among the masses. People will not shed irrational ideas and religious superstitions like child is a god gift unless there is a spread of education. 6. Joint Family System Joint family system prevails in many parts of the country. In the joint family system the resources are pooled up and expenses are shared. This system is a sort of security to the old, the invalid and the unemployed as each member shares the responsibility of others. The children are not burden on the parents individually and so pressure to limit the family size is not felt. 7. Limited use of family planning methods The use of family planning methods continues to be restricted to urban areas. The facilities for family planning are very limited in rural areas. The non-availability of birth control devices has been an important contributory factor in keeping the birth rate high. Thus high birth rate in India is the result of a whole lot of social, economic religious and cultural factors. The social and cultural changes by spread of education and economic growth can be expected to bring down the high birth rate in India. Causes of Low Death/ Mortality Rate The decline in death rate since 1951 has been progressively sharper. The factors that contribute to the decline in death rate are as follows: 1. Control of Epidemics In the early years of the 20 th century, epidemics took a heavy toll of life in India. The increased availability of effective medicines and improvement of healthcare facilities have controlled the occurrence of epidemics like plague, small pox, malaria etc. This has contributed to substantial reduction in the death rate. 13

2. Control of Famines Famines were almost a regular occurrence in India in the early years of planning which causes large number of starvation deaths. The improvement in the means of transport and communication has effectively managed the spread of famines. 3. Improved Medical Facilities The increased investment in health and medical care facilities and development of health centers in the far-flung rural areas has prevented deaths due to timely availability of medical aid. 4. Impact of Economic Growth Economic growth of the country has a significant impact on the fall in the death rate. The improved incomes and living standards of people have improved their health and nutritional levels. The improvement in personal hygiene and sanitary conditions has prevented the spread of communicable diseases. The improved literacy level has created a awareness on preventive measures for better health. The life expectancy of an average Indian has increased. The special poverty alleviation and social welfare programmmes that aimed at providing basic needs such as pure drinking water, healthcare facilities, and wage employments have contributed to better life and lower death rate. Population Policy in India In 1952, India was the first country in the world to launch a national programme, emphasizing family planning to the extent necessary for reducing birth rates "to stabilize the population at a level consistent with the requirement of national economy. The Government while recognizing the long run role of development in reducing population growth lays emphasis on deliberate efforts at reducing birth rate to achieve substantial results in the short run. The population policies and national programmes of family planning implemented since independence went through number of changes and can be conveniently classified into six phases as follows: 1) Clinic Approach (1951-61) In 1950, Government appointed population policy committee and created a family planning cell in the ministry of Health. The clinical approach was adopted by Government whereby a number of family planning clinics were opened throughout the country that performed plethora of activities such a motivation, education, research and clinic services to control population. It emphasized on the spread of contraceptive services among the couples to limit family size. 2) Extension Approach (1962-69) The clinic approach was replaced by the extension approach whereby the incentives were offered to people that accepts family planning methods. The targets on the number of contraceptive acceptors were fixed for the family planning workers. The demographic goals were specified state by state, district by district for the programmes. During five year plans the goal of incentives, targets and time frame or achievement of targets keep on changing at different period of time. 14

3) High Intensity Approach during 70 s During early 70 s it was felt that the birth rate was declining and high population growth was considered to be one of the key factor responsible for retarding the economic development of the country. The family control measures were emphasized even made compulsive among couples to adopt them. Incentives both in cash and kind were offered in addition to those officially sanctioned by Government. 4) Coercive Approach Emergency Period (1975-77) During this period, the rights of individuals were largely suppressed with Government assuming enormous authoritarian powers. The national population Policy (NPP) was formulated in 1976. Till 1976, the family planning was entirely voluntary. The government role was restricted to motivating the people to accept the family planning and to provide clinical facilities to its acceptors. The NPP, 1976 inspired many State Governments to make family planning compulsory for citizens to stop bearing children after three children. The coercive tactics were adopted to control fertility level. The general public agitated due to these excesses. 5) Recovery Phase: Post Emergency Period (1977-94) The tremendous unrest among public at large especially on the insistence of target- based approach caused Government to change the concept of family planning into family welfare. The new approach tried to reduce targets for the adoption of family planning measures such as sterilization. It emphasized on the demographic change through education and motivation. Thus the new approach was educational and wholly voluntary. Government makes amendments in the law raising the minimum age of marriage of girl to 18 years and of boys to 21 years. During 1980, the family planning programme was restored with continued emphasis on the sterilization. During VI th five year plan, 1980-85, population policy was set up by the planning commission to formulate long-term policies, goal and programme targets for family welfare programmes. The demographic goals were revised in lines of achieving Net Reproductive Rate (NRR) to 1 by the year 1996 for the country as a whole on an average and by the year 2001 in all the states. Thee goals are yet to be realized. These goals were translated into achieving a crude birth rate of 21, a crude death rate of nine, infant mortality rate of 60, expectancy of life at birth of 64 years and contraceptive prevalence rate of 60 percent among eligible couples by modern methods of family planning to be achieved in all the states by the year 2000. However, during Sixth plan period no significant achievement could be made with the crude birth rate did not register any decline. However, crude birth rate marginally fell during 90 s to 29.1 per thousand. 6) Current Policies The new strategy since the eighth plan stressed upon the decentralized planning and its implementation. Currently, the National Population Policy (NPP) 2000 seems to be in operation in the country that has direct impact on the population issues and availability of family planning services. This is discussed as follows: 15

National Population Policy (NPP) 2000: NPP, 2000 has laid down three objectives; immediate, medium and long term goal called the national socio-demographic goals. The immediate objectives are to meet the needs of contraception, health infrastructure, and health personnel and to provide integrated services for basic reproductive and child health care. The medium term objective is to lower down the total fertility rates to the replacement level (i.e. 2.1) by 2010. The long term objective is to achieve a stable population by 2045. NPP 2000 has set the following broader goals for 2010: Universal access to quality contraceptive services in order to lower the total Fertility Rate to 2.1 by adopting small family norm. To reduce Infant Mortality Rate to below 30 per thousand live births. Promote delayed marriage for girls, not earlier than age 18 and preferably after 20 years of age. Reduction in Maternal Mortality Rate to less than 100 per one-lakh live births. Universalisation of primary education and reduction in the drop out rates at primary and secondary levels. Universal immunizations of children against vaccine preventable diseases. Access to information/counseling and services for fertility regulation and contraception with a wide basket of choices. NPP, 2000 has laid down the emphasis on the decentralized planning and execution of programmes and seek the role of NGOs and private sector to improve its implementation. The National Commission on Population has been set up to improve the coordination of work between the ground level machinery and Government. The commission will review the implementation of NPP from time to time. The policy also involves the promotional and motivational measures for popularizing the small family norms. India's Demographic Achievement Half a century after formulating the national family welfare programme, India has: Reduced crude birth rate (CBR) from 40.8 (1951) to 24 (2008); Reduced crude death rate from 27.4 in 1951 to 8 in 2008; The infant mortality rate (IMR) from 146 per 1000 live births (1951) to 58 per 1000 live births (2008); Quadrupled the couple protection rate (CPR) from 10.4 percent (1971) to 44 percent (1999); Added 28 years to life expectancy from 37 years to 65 years in 2008 Achieved nearly universal awareness of the need for and methods of family planning, and Reduced total fertility rate from 6.0 (1951) to 2.8 (2008) Source: World Population Data Sheet, 2008 Appraisal of Population Policy: A critical study of the population policies and programmes adopted in India since 1951 briefly outlined above reveals the following deficiencies: 16

1. Over-Emphasis on Contraceptives: The program placed almost a total emphasis on sterilization and distribution of contraceptives from primary health clinics. The quality of services offered in this regard was far from satisfactory and has not improved over time. This has caused a small proportion of eligible couples to use the population control measures. 2. Unmet needs of Contraception in Rural Areas: There is a huge unmet need for contraception in the rural areas. Around 74 percent of the population lives in rural areas, many with poor communications and transport facilities. Reproductive health and basic health infrastructure and services often do not reach the villages, and, accordingly, vast numbers of people cannot avail of these services. 3. Rigid Targets: Though the target-free approach has come into vogue officially since 1995, the states are continuing their old target-oriented approach. The strong implicit insistence of the government at all levels on achieving the targets on sterilization, the delivery of maternal and child health services have suffered over the years. It is rightly said that the approach has emphasized on processes rather than outcomes. 4. Inadequacy of Health Systems: The organizational adequacy, effectiveness and efficiency of health systems in different states vary widely. In some states the family planning clinics and primary health centre are either non-existent or inefficient that it fails to provide required services at the specified time. Further, there is a shortage of trained personnel, inadequate motivation of the staff and improper maintenance of infrastructural equipment that limits the success of family planning programme. Measures to meet Population Challenges: Population growth in India continues to be high on account of the large size of the population in the reproductive age-group, higher fertility due to unmet need for contraception and high wanted fertility due to the high infant mortality rate. Effective steps are required to be devised and implemented to meet the growing population challenge. These are discussed as follows: 1. Spread of Education: The spread of education especially among females results in lower fertility. Education changes the belief in fate, the irrational attitudes and permits the rational choices. Better educated women are able to delay marriage and exercise more control over their reproductive lives including decisions about child bearing 2. Empowering Women: The improved status of women, gainful employment and education can go a long way to effectively implement the family planning programmes. The improvement in the status of women enhances their decision-making capacity at all levels in all spheres of life, especially in the area of reproduction, improve maternal and child health, reduce fertility and child mortality, thereby resulting in a gradual slowing of population growth. 17

3. Reduction of Infant Mortality Rates: Repeated child births are seen as an insurance against multiple infant (and child) deaths and accordingly, high infant mortality negates all efforts at reducing at total fertility rates. Inadequate antenatal care and delivery services, low levels of immunization among children, substantial proportion of high risk births, poor nutrition, health and sanitation conditions are some of the reasons for the relatively high mortality of infants and children. 4. Provision of Social Security: The provision of old age pensions and other forms of social security reduces the dependence of parents on their children. This may motivate the people to adopt small family norms. 5. Improved Links among various Welfare Programmes: The welfare schemes like poverty alleviation programme, employment schemes have to be integrated with population control programme in such a manner that the schemes favor the people with smaller family. This will provide a motivation to people to adopt smaller family norms. 6. Propagation of Small Family Norms: The massive publicity has to be launched to educate people about the need of small family. Information, education and communication of family welfare messages must be clear, focused and disseminated everywhere, including the remote corners of the country, and in local languages. Self-Check Questions The relationship between population and economic development is two-sided relationship. Explain this statement in the light of India s experience since 1951. Discuss the main causes of rapid growth of population in India and What measures have been taken by Government of India to control population growth in India. Write a short note on Theory of Demographic Transition 18

LESSON 3 UNIT I: Population URBANIZATION AND OCCUPATIONAL STRUCTURE IN INDIA - Dr. Anupama Rajput Studying this chapter should enable you to understand: Meaning of Urbanization in India. Major trends and Pattern of Urbanization in India. Factors of Urban growth and problems of over-urbanization. Measures to improve agriculture productivity in India. Trends and Pattern of Occupational Structure in India. Meaning of Urbanization: Urbanization refers to as the movement of people from villages to the town/city where economic activities are centered around non-agricultural occupations such as trade, manufacturing industry and management. It is a phenomenon which is closely related with industrial revolution and associated economic development. An area is classified as rural and urban depending upon various criteria such as population size, density, occupational composition and civic status. In the recent census of India, town is defined as follows: a) Statutory towns: All places with a municipality, corporation, Cantonment board or notified town area committee, etc. so declared by state law. b) Census towns: Places which satisfy following criteria:- i) a minimum population of 5000 ; ii) at least 75% of male working population engaged in non agricultural pursuits; and iii) a density of population of at least 400 persons per sq km World Urbanization: The share of world's population living in urban centers has increased from 39 percent in 1980 to 48 percent in 2000. The developed countries have higher urbanization level (76 percent in 2000) compared with developing countries (40 percent in 2000). The urbanization level has almost stabilized in developed countries. Volume and Trend of Urbanization in India The urban population in India at the beginning of 20th century was only 25.8 million constituting 10.8 per cent of total population in 1901, which increased to 286.1 million comprising 27.8 per cent of total population in 2001. There is a gradual decrease of rural population from 89 percent to 72 percent over this period. This process of urbanization in India is shown in Table 1.It reflects a gradual increasing trend of urbanization. The urban population like total population did not grow much until 1921 and the level of urbanization even showed decline in 1911 owing to epidemic of 1911, which spread mainly in the urban areas and brought exodus of urban population to rural areas. After 1921, the level of urbanization grew consistently and very fast during the decade 1941-51 when the decennial urban growth rate was recorded as high as 41.4 per cent due to partition of the country in 1947. The decline in the growth rate during 1951-61 was due to the change in definition of urban was done in 1961 census. The peak in urban growth 19

was observed during 1971-81 when the decennial growth rate reached up to 46.1 per cent- the highest ever during the last century. After that it has slowed down but was never less than 30 per cent till 2001 census. While India is still a low urbanized country, the pace of urbanization has slowed down during the last two decades. However, the absolute increase in urban population kept on rising. It may be further noted that from 1921 to 2001, when total population grew by 4 times, the urban population increased by 10 times. Compared to the change in urban population, the number of towns only got doubled during the same period. Urbanization in India has been relatively slow compared to the world urbanization. Table 1: Trends in Urbanization, India, 1901 to 2001 Source: Census of India of different periods According to a study by Kundu 1 the pattern of urbanization in India is characterized by continuous concentration of population and activities in large cities. On the contrary the concentration of population in medium and small town either fluctuated or declined. The following table 2 shows number of towns and percentage of urban population by size class of city during 1901-2001. It is clear that a high percentage of urban population being concentrated in class I cities (having population size of 1, 00,000 or more) and its population has systematically gone up over the decades in the last century. As per 1901 census percentage of population in class I cities was 26 percent which went to 65 percent and 69 percent in 1991 and 2001 census respectively. The percentage share of small cities on the other hand, has gone down drastically from 47 percent to 10 percent only. 1 Kundu, A. (2003) Urbanization and Urban Governance: Search for a Perspective beyond neo-liberalism Economic and Political Weekly, July 19, pp. 3079-3087. 20

Table 2: Percentage Distribution of Urban Population by Size Class Source: Census of India of different periods Factors of Urban Growth in India Urban growth in India can be attributed to mainly three components 1) Natural increase, 2) Net migration, 3) Area reclassification. The natural increase in urban areas remained constant since 1970 till 1990 mainly due to the fact that the urban birth rate and death rates have declined in the same magnitude. Since 1990 s the urban natural increase has declined as the urban birth rate declined faster during the 1990s compared to a small decline in urban death rate. In future, urban growth is further likely to slow down because there is much scope for the urban birth rate of about 22 per 1000 observed during the decade 1990-2000 to further decline, whereas urban death rate observed on average 7 during the same period may not decline any more. The natural increase in urban areas of the initial population is the largest contributor to the urban growth although it share has declined recently. As far as the contribution of migration is concerned, it remained unaffected in the 1980s and there remains stability in the contribution of migration in urban growth over the last three decades. The migration to cities occurs primarily due to rural push than urban pull factors. The increase of unemployment in the rural areas, surplus rural labor force gets pushed to urban centers with the hope of getting employment. The urban pull factors include the expectation of a variety of glamorous jobs, good housing, medical, educational and communication facilities. If we analyze the trend of reclassification of areas then it is clear that there is a slowing down of reclassification of areas as towns. So, Urbanization is mainly a product of demographic explosion i.e. natural increase and poverty induced rural - urban migration. Urbanization Trend: An Interstate Analysis The regional variations in the distribution of urban population are significant. A large proportion is concentrated in six most developed states, namely Maharashtra, Gujarat, Tamil Nadu, Karnataka, Punjab, and West Bengal, accounting for about half of the country s urban population. By the 2001 Census, they report percentage of urban population much above the national average of 27.78, whereas the less developed states report significantly low figures. Indeed, the levels of urbanization are high in the states with high per capita income and vice versa 21

Basic Features and Pattern of India's Urbanization: The basic features of urbanization in India can be highlighted as: 1. There exists lopsided urbanization that has led to the concentration of population of in the class I cities; 2. Urbanization has occurred without industrialization and strong economic base; 3. Urbanization is mainly a product of demographic explosion and poverty induced rural- urban migration. It has occurred more due to rural push and not due to urban-pull; 4. Over- urbanization in major cities has led to the massive growth of slum followed by misery, poverty, unemployment, exploitation, inequalities, degradation in the quality of urban life. Problems of Over-Urbanization: As mentioned above the number of towns has not grown as fast as the urban population so India's urbanization is followed by some basic problems in the field of: a) housing, b) slums, c) transport d) water supply and sanitation, e) water pollution and air pollution, f) inadequate provision for social infrastructure (school, hospital, etc). In fact the urbanization in India has resulted in a concentration of population in a few large cities without a corresponding increase in their economic base. Large cities are structurally weak instead of being functional entities because of inadequate economic base. The cities are subject to extreme filthy slum and very cruel mega city denying shelter, drinking water, electricity, sanitation to the extreme poor and rural migrants. The urban cities fail to absorb the increasing labor force due to poor infrastructural facilities. Further, rural poor lack the necessary skills for the jobs in urban areas. In other words, Poverty led migration has induced very poor quality of urbanization followed by misery, poverty, unemployment, exploitation, rapid growth of slum, inequalities, degradation in the quality of urban life. Thus there is transfer of rural poverty to urban poverty. This has also resulted into the social and economic inequalities which warrant social conflicts, crimes and antisocial activities. Policy Implications The following policy initiatives may be recommended to overcome the problems of urbanization in India: i) The strong economic base for small and medium cities which are neglected so far has to be developed. Since the mega cities have reached saturation level. Thus the redirection of migration flows would occur to small cities for employment generation and avoid over-crowding and over congested slums of mega cities. ii) The emphasis should be placed on the proper urban planning that involves the improvement of urban infrastructure, e.g roads, traffic, transport etc. Developmental planning should further involve the development of newly annexed urban areas so that the burden of main big cities can be relieved. (iii) The integration of rural and urban economy should be strengthened that develops the agrobased industry. The raw material should be processed in the rural economy and then transferred to urban economy (Kundu, Sarangi and Dash, 2003). 22

Occupational Structure in India Occupational structure of a country refers to the distribution or division of the population according to different occupation. Occupations are generally classified as primary, secondary, and tertiary. Primary activities include agriculture, animal husbandry, forestry, fishing, mining and quarrying etc. Secondary activities include manufacturing industry, building and construction work etc. Tertiary activities include transport, communications, commerce, administration and other services. There is a close relationship between occupational structure and the economic development of the country. The high level of economic development is generally associated with a relative increase of employment away from the agricultural sector and the higher level of population engaged in the tertiary sector. In other words the economic progress leads to the steady shift of employment and investment from the primary activities to secondary and then to the tertiary sector. Trends in the Occupational Structure in India The changing profile of the occupational structure during 1972-73 to 2004-05 is given in table3. The data revealed that the share of workforce deployed in agriculture declined from 74 percent in 1972-73 to about 61 percent in 2001-02 that further declined to 56.5 percent in 2004-05. The share of employment in the industry has increased from 11.2 percent to 17.1 percent which was decreased to 12.2 percent in 2004-05. The service sector has grown from 14.6 percent to 24.8 percent during the same period. Table 3: Distribution of Workforce by Industrial Division (figures in %) Year Primary Secondary Tertiary 1972-73 74 11.2 14.6 1983 68.1 13.9 18.2 1993-94 63.9 14.9 21.2 2001-02 60.8 17.1 22.1 2004-05 58.5 12.2 24.8 Source: Government of India, Economic Survey of different years It may be noted that the share of agriculture in total GDP has declined tremendously but the corresponding decline in the employment share has not taken place in India in the primary sector. Agriculture s share of GDP has nearly halved in the past two decades (see Chart 1); but its share of the workforce has fallen much more slowly. Its share of the workforce is now 2.7 times its share of the GDP. The manufacturing sector s share of GDP has hardly increased in the last two decades (see Chart 2). Similarly, its share of employment has risen only slightly, by 1.5 percentage points. Indeed, its share of employment has hardly changed over the last century. The historical shift in GDP and occupational structure has bypassed manufacturing. This only indicates that the process of industrialization has failed to absorb excess labor in the agriculture. Further, the manufacturing sector in India consists of a small number of medium and large industries in which value added is high, surrounded by a very large number of small industries in which value addition is low. The share of the services sector in GDP has grown dramatically, by 23

14.4 percentage points, and fast resembles the share of the services sector in a developed economy. Nevertheless the share of services in employment has only inched up 7.2 percentage points over the same period. Source: National Sample Survey Reports 24