Structure of the Indian Economy & Demographics (Part-I)

Main characteristics of family:

1. Universality: There is no human society in which some form of the family does not appear. Malinowski writes the typical family a group consisting of mother, father and their progeny is found in all communities, savage, barbarians and civilized. The irresistible sex need, the urge for reproduction and the common economic needs have contributed to this universality.
2. Emotional basis: The family is grounded in emotions and sentiments. It is based on our impulses of mating, procreation, maternal devotion, fraternal love and parental care. It is built upon sentiments of love, affection, sympathy, cooperation and friendship.
3. Limited size: The family is smaller in size. As a primary group its size is necessarily limited. It is a smallest social unit.
4. Formative influence: The family welds an environment which surrounds trains and educates the child. It shapes the personality and moulds the character of its members. It emotionally conditions the child.
5. Nuclear position in the social structure: The family is the nucleus of all other social organizations. The whole social structure is built of family units.
6. Responsibility of the members: The members of the family have certain responsibilities, duties and obligations. MacIver points out that in times of crisis men may work and fight and die for their country but they toil for their families all their lives.
7. Social regulation: The family is guarded both by social taboos and by legal regulations. The society takes precaution to safeguard this organization from any possible breakdown.

• India’s experience with the Human Development Index offers interesting insights:
• According to UNDP, India’s HDI value rose from 0.676 in 2022 to 0.685 in 2023, placing the country at 130th out of 193 countries in the 2025 Human Development Report.
• Between 1990 and 2022, India’s HDI value increased from 0.434 to 0.644, a rise of about 48.4%.
• The improvement has been driven by gains in life expectancy (from 58.6 years in 1990 to around 72 years in 2023), education (schooling years increasing) and income (GNI per capita rising).
• Life expectancy: Increased from 58.6 years (1990) to 72 years (2023).
• Education: Mean years of schooling rose from 3.0 years to 6.2 years.
• Income: GNI per capita (PPP) increased from US 2,000 in 1990 to about US 9,000 in 2023.
• Despite these gains, India still falls under the Medium Human Development category.
• States like Kerala, Goa, and Himachal Pradesh show higher HDI, while Bihar, Uttar Pradesh, and Jharkhand lag behind.

Socialism is an economic system based on state ownership of means of production including capital. Universalism means application of certain basic principles at universal level.

National Income Meaning

• National Income denotes the total worth of all final goods and services generated within a country during a specific time frame, typically over the course of one financial year.
• From a macroeconomic perspective, national income plays a central role in measuring the economic performance and prosperity of a nation.
• It is utilised in evaluating per capita income, understanding inequality, and comparing growth across countries. It also forms the basis for fiscal policy formulation, taxation, and welfare schemes.
• Globally, institutions like the World Bank, the IMF, and the United Nations rely on national income statistics to assess global economic trends and design development frameworks.
• In India, agencies such as the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) handle national income estimation.

• The Finance Act, 1987 introduced MAT in the form of a tax on book profits in Section 115J of Income Tax Act.
• This tax was implemented to make sure that no person with a significant amount of income would be able to avoid paying taxes due to any exemptions.
• In an effort to support the Make in India drive, the government has passed the Taxation Laws (Amendment) Ordinance, 2019, which proposes significant corporate tax relief to support domestic enterprises.
• MAT has been lowered from FY 2019-20 to 15% from 18.5% for businesses that continue to get exemptions and incentives.
• Corporate tax rate are 22% which were previously 25.17% without exemptions, inclusive of surcharge and cess. While for new manufacturing companies, tax rate has been brought down to 15% (Effective Tax Rate 17.01% inclusive of Surcharge and Cess).

• The Raja Chelliah Committee, officially known as the Tax Reforms Committee, was established between 1991 and 1993 with the primary objective of overhauling India's tax system. Chaired by Raja Chelliah, the committee was a turning point in the history of taxation in India, setting the stage for comprehensive reforms that would follow. The committee's mandate was broad, covering both direct and indirect taxes, and it aimed to simplify the tax structure, broaden the tax base, and improve compliance.
• One of the most significant recommendations of the committee was the introduction of the Goods and Services Tax (GST), which would later become a reality in 2017. The committee also advocated for a more simplified and rational income tax structure, which led to significant reforms in direct taxes. Additionally, the committee focused on improving Centre-State financial relations, recommending a balanced approach to revenue sharing and grants. The impact of the Raja Chelliah Committee's recommendations have not only simplified the tax system but also made it more equitable and efficient. The committee's work laid the intellectual foundation for subsequent tax reforms and continues to be a reference point for policymakers and scholars alike.

• The disparity persists despite the rapid increase in female enrolment since the 1990s.
• High dropout rates and lower attendance among girls compared to boys.
• Within government schools, issues such as overcrowded classrooms, teacher absenteeism, lack of sanitation facilities, including girls’ toilets, and overall poor infrastructure remain common concerns.
• Social norms and customs, such as early marriages and restrictions on girls’ mobility outside their homes and villages, contribute to lower female attendance and dropout rates.
• Health issues, including frequent illnesses due to inadequate nutrition and unsanitary living conditions, also affect girls’ attendance and educational outcomes.
• Economic constraints and traditional gender roles often lead families to prioritise boys’ education over girls’, as girls are perceived to be less employable.
• Patriarchal attitudes and societal perceptions contribute to the marginalisation of women in social, political, and economic spheres, limiting their opportunities and voice in development discussions.
• Concerns over violence against women and security issues further contribute to barriers to girls’ education, affecting their ability to attend school regularly and safely.

• India follows a partial capital account convertibility regime.
• While current account transactions (such as trade in goods and services) are fully convertible, capital account transactions are regulated.
• Key aspects of India’s capital account framework include;

  • Foreign Direct Investment (FDI) is largely liberalized but still subject to sectoral caps and government approvals in sensitive areas.

  • Foreign Portfolio Investment (FPI) is permitted with restrictions on ownership limits in certain sectors.

  • Outward investments by Indian residents are allowed but within prescribed limits under the Liberalized Remittance Scheme (LRS).