# Nature of the Indian economy: measures of growth, population, resources, infrastructure and economic thinkers

> These study notes explain Nature of the Indian economy for the Group 4 / VAO (Combined Civil Services Examination-IV) exam in plain language: the same reviewed notes the TNPSC Guide app shows, published by our editors with their source. Read the key points first, then practise the unit's questions. For exam facts such as dates and vacancies, always check tnpsc.gov.in.

Last updated: 2026-11-02 · By TNPSC Guide editorial team
URL: https://www.tnpscguide.com/exams/group-4/notes/gs-economy-nature

## Why the exam asks this

The syllabus names it "nature of the Indian economy". The 2024 paper had no direct question here; its HDI question (Q168) is under social problems. Census figures, the highest and lowest states, and the economic thinkers suit statement and matching questions. These figures are from the textbook's period; newer ones need another official document.

## Measures of welfare

Living standards are measured by the Human Development Index, the Physical Quality of Life Index and the Gross National Happiness Index. GDP is the money value of all goods and services produced in a year. The phrase Gross National Happiness was coined in 1972 by Bhutan's fourth king, Jigme Singye Wangchuck. Developing countries are those that do not fully use their land, mineral and labour resources and have low per-capita income; they are also called backward or third-world countries.

## Features of the Indian economy

India is a fine example of a mixed economy. 60% of people work in agriculture and allied activities, yet agriculture gives only 17% of GDP; services such as IT and BPO give the largest share. In 2016-17, growing at 7.1%, India was among the fastest-growing economies after China; it is in the G20. In 2014-15 the target was 8% and actual growth 7.6%. Because output growth did not create jobs, the economy shows "jobless growth".

## Population

With 2.4% of the world's land and 1.2% of its income, India has 17.5% of its people: one in six humans is Indian. Population was 36.11 crore in 1951 and 121.02 crore in 2011. The birth rate fell from 39.9 to 21.8 and the death rate from 27.4 to 7.1. 1921 is the year of the great divide, 1951 the small divide, 1961 the population explosion; population crossed 100 crore in 2001. Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh are the BIMARU states. Life expectancy was only 23 years in 1901-1911, 32.1 in 1951 and 63.5 in 2011.

**Density, sex ratio and literacy (2011)**

| | |
| --- | --- |
| Density (per sq km) | 117 in 1951, 325 in 2001, 382 in 2011; highest Bihar 1,102; lowest Arunachal Pradesh 17 |
| Sex ratio (women per 1000 men) | 946 in 1951, 933 in 2001, 940 in 2011; highest Kerala 1084; lowest Haryana 877 |
| Literacy | 74.04% in 2011 (men 82.1%, women 65.5%); Kerala first at 94%; Tamil Nadu 80.1%; Bihar 61.8% |

## Land and natural resources

With 32.8 lakh sq km India is seventh in the world by area (2.42% of the world's land). In 2007 forests covered 69.09 million hectares, 21.02% of the land. Kolar and Hutti (Karnataka) and Ramagiri (Andhra) are the main gold areas; diamonds come mostly from Panna in Madhya Pradesh.

## Economic and social infrastructure

Infrastructure is economic (transport, communication, energy, irrigation, finance) or social (education, training, research, health, housing). India's railways run 63,000 km, 13,000 km electrified; 90% of sea trade passes through ports; the National Harbour Board came in 1950. Air India and Indian Airlines merged on 27-8-2007. Education, a state subject until 1976, became a joint Union and state responsibility; 3% of GDP goes to it. Ayurveda, Siddha, Unani, Homoeopathy and Yoga come under the AYUSH ministry.

**Indian economic thinkers**

| | |
| --- | --- |
| Thiruvalluvar | factors of production, agriculture, public finance; agriculture the basic activity; a balanced budget |
| Gandhi | self-sufficient village republics, decentralised production; called machines "the greatest sin" |
| Jawaharlal Nehru | democratic socialism; the IITs began in his time |
| B.R. Ambedkar | 1918 essay on small holdings in India; nationalising key industries, collective farming |
| J.C. Kumarappa | All India Village Industries Association, 1935; wrote Economy of Permanence in jail |
| V.K.R.V. Rao | three research institutes including the Delhi School of Economics |
| Amartya Sen | famine comes from failed entitlements; wrote Choice of Techniques |

**Key figures**

| | |
| --- | --- |
| Gross National Happiness | 1972, the king of Bhutan (page 168) |
| People in agriculture; its share of output | 60%; 17% (page 170) |
| Growth in 2016-17 | 7.1% (page 171) |
| Share of world population | 17.5%; land 2.4%; income 1.2% (page 173) |
| Population | 36.11 crore in 1951; 121.02 crore in 2011 (page 173) |
| Birth and death rates | 39.9 → 21.8; 27.4 → 7.1 (page 174) |
| Life expectancy | 32.1 in 1951; 63.5 years in 2011 (page 176) |
| Land area; forests | 32.8 lakh sq km, seventh; 21.02% (page 177) |
| Railways | 63,000 km; 13,000 km electrified (page 179) |
| Spending on education | 3% of GDP (page 181) |

> **Exam tip:** Memory hooks
Census years: 1921 great divide, 1951 small divide, 1961 explosion. Highest and lowest in 2011: density Bihar - Arunachal; sex ratio Kerala - Haryana; literacy Kerala - Bihar. BIMARU spells Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh. Happiness index means Bhutan.

**Easy to confuse**

| | |
| --- | --- |
| HDI / Gross National Happiness | a welfare measure; the phrase coined by Bhutan's king in 1972 |
| People in farming / farming's share | 60% of people; 17% of output |
| Economic / social infrastructure | transport, energy, finance; education, health, housing |
| Highest / lowest sex ratio (2011) | Kerala 1084; Haryana 877 |
| Highest / lowest density (2011) | Bihar 1,102; Arunachal Pradesh 17 |
| Gandhi / Nehru | village republics, decentralisation; democratic socialism, IITs |
| Kumarappa / V.K.R.V. Rao | village industries association 1935; three research institutes |

> **Exam tip:** Quick check
1. Who coined Gross National Happiness? Answer: Bhutan's fourth king, Jigme Singye Wangchuck (1972).
2. Which is the year of the population explosion? Answer: 1961.
3. Which state had the highest sex ratio in 2011? Answer: Kerala (1084).
4. Who wrote Economy of Permanence? Answer: J.C. Kumarappa.
5. When did Air India and Indian Airlines merge? Answer: 27-8-2007.

Source: பொருளியல், மேல்நிலை முதலாம் ஆண்டு, தமிழ் வழி (Economics, Standard XI, Tamil medium; Samacheer Kalvi) (11ஆம் வகுப்புப் பொருளியல், இயல் 7 (இந்தியப் பொருளாதாரம்), பக்கம் 168-191)

## Sources

- [Official syllabus page](https://www.tnpsc.gov.in/english/syllabus.html)
- [Notifications](https://www.tnpsc.gov.in/English/Notification.aspx)