Have you ever wondered what the distinction between a developed or an underdeveloped economy? Moreover, on what features the country known as developed or underdeveloped nations? The economies are classified based on the per capita income and their living standards into developed, developing, and underdeveloped nations.
Furthermore, gross domestic product (GDP) per capita is the chief determinant used to discover the above. Per capita is a tally of all the goods and services produced in a country in one year.
Developed vs. underdeveloped economy
About developed economy
–> Developed economies features namely are-
- high income,
- well developed industrial,
- primary and services sector,
- sound and diversified economic structure,
- efficient and skilled laborers,
- high per capita income, and
- Decent standard economy.
–>Examples of a developed nation: Japan, Singapore, Australia, New Zealand, US, Canada, UK, France, Germany, Sweden, Norway, and Switzerland.
–> First, the one whose real per capita income is lower when compared to that of the USA, Australia, and Canada.
–> Second, its components are:
- a low rate of capital formation,
- high population growth rate,
- abundant but underutilized natural resources, and
- a lower standard of living.
–> Often considered being the same as developed nations. Hence, these poor nations can achieve reasonable economic progress.
About Indian economy
- To illustrate, India is a developing country. The reason is the presence of high economic growth, self-reliance, social justice, and modernization. In contrast, it also has several features of an underdeveloped nation like rising population, per capita real income, pollution, etc.
- Therefore, the presence of these problems makes the Indian economy more of an underdeveloped economy.
- However, India is on the path of a developed nation. In turn, it will achieve the above through its sincere efforts of development, growth, and overall improvement of the economy.
GDP of top 5 Countries (PPP) are the following:
- China- 14.34 lakh crores USD (2019)
- The United States- 21.43 lakh crores USD (2019)
- India- 2.87 lakh crores USD (2019)
- Japan- 5.08 lakh crores USD (2019)
- Germany- 3.86 lakh crores USD (2019)
According to the above data, India ranks third in the list of estimated Gross domestic product (GDP) based on purchasing power parity (PPP).
Since independence, the Indian economy has been attaining much progress in its various fields. Thus, over the past, India’s economy is unquestionably a developing one. Despite, when compared with the level of economic growth prevailing in developed nations, it is still underdeveloped.
Author- Pragya Verma
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Featured image credits– Business world