Economic Influences on Development (Edexcel GCSE Geography A)

Revision Note

As India has developed, its economic structure has changed from mainly primary to tertiary and quaternary

Changes and Impacts of India's Economic Sectors

Sector	Change	Impact
Primary	Reduction in agriculture: from 37.2% of total GDP to 14.5% Increased mechanisation	Rural to urban migration in search of work Breakup of traditional family units
Secondary	Industrialisation is increasing, but slowly	Rising air pollution Increased urban population density Widening of development gap
Tertiary	Rapid increase in the contribution of services from 45.8% to 67.1%	Increased job opportunities Growth of the economy with rising GDP and GNI
Quaternary	Fastest growing telecom markets in the world Significant space and satellite programmes	Increased investment from TNCs Over 1 million ICT jobs created
Formal Employment	Increasing through the growth of TNCs in core regions	Taxes raised help improve social investment Investment is primarily in core regions
Informal Employment	Increasing due to demand for low-paid, low-skill services	No direct contribution to government as taxes No benefits are payable

Changes to India’s trading policies during the 1990s have led to a rapid rise in imports and exports
The government encourages companies to make international links
- Education has been a priority to provide an educated workforce to international companies
India’s key imports are oil, gold, silver, and electrical goods
India’s key exports are oil products, gems and jewellery
- In 2023, India ranked 18th in the world for merchandise exports
- India ranks 8th in the world for export of commercial services such as transport, shipping and finance

Historically, India has received the most international aid, but this has declined rapidly as the country has developed
- The UK, for example, planned to end all aid to India by 2015, although technical assistance does continue
India now sends aid to other countries, reversing the trend from recipient to donor
According to India's budget, in 2022, it gave $2.4 billion in foreign aid and gave credit of $30 billion to several countries for development projects

Public investment
- India has agreed to invest in renewable energy sources such as solar power and plant more forests to absorb carbon emissions
- There is a large public sector and India invests in education, healthcare, transport and housing, hoping to reduce the gap between public and private sectors
- Small Indian companies are encouraged to invest in economic development through Startup India, with taxes and paperwork reduced
India is also a member of the G20, giving it greater influence in global politics and trade agreements
Private investment
- Before 1991, private investment was difficult and a licence was needed by companies before they could build and begin producing goods
- After the government opened its economy, large investors from the USA and Europe outsourced its manufacturing and IT services to India
- This is through trade and development with Transnational Corporations (TNCs)
  - Many TNCs have set up offices and production plants in India
  - Competition for work is high and training is provided
  - Infrastructure within the country has been improved
  - TNCs contribute tax to the government, which is spent on further development
  - However, the best jobs are usually given to foreign workers from the TNC's own country

Last updated: 19 April 2024

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