Economics(Paper-4) - Shivaji University

The share of the primary sector in the under-developed countries is significantly larger
an on the average, than in the group of advanced countries.
2) Capital Deficiency : Capital deficiency is another characteristics which is
universally applicable to all these countries. It is both a cause and an effect of
underdevelopment. Generally under developed countries suffer from chronic shortage
of capital which is largely responsible for low per capita income in an economy. In other
words availability of capital in underdeveloped countries is very low as compared to
that in well advanced countries.
3) Unutilized / underutilized Natural Resources : The natural resources in an
underdeveloped economy are either unutilized or under utilized. Generally speaking
under developed countries are not deficient in land, water, mineral, forest or power
resources, through they be untapped. In other worlds they constitute only potential
resources. The main problem in their case is that such resources have not been fully
and properly utilized due to various difficulties, such as their inaccessibility shortage of
capital, primitive techniques, and the small extent of the market.
4) General Poverty : An underdeveloped country is poverty-ridden . Poverty is
mostly reflected in very low per capita. Income as compared to that of the developed
countries. It is the per capita income of a country which determines whether a country
is richer or poor. i.e. developed or underdeveloped. The average annual per capita
income in under developed countries like India, Pakistan and Indonesia is below and
whereas it is much higher in the developed countries. The extremely low GNP per
capita of low-income economies reflected the extent of poverty in them. It is not relative
poverty but absolute poverty that is more important in assessing such economies. The
absolute poverty is reflected in low living standard of the people.
5) Economic Backwardness of the people : The people in under-developed
countries are economically very backward, that is the quality of the people as productive
agents is low. Instead of acquiring the greatest possible control over their physical
environment, the people have struck as balance with nature at an elementary level.
They have been relatively unsuccessful in solving the economic problem of man’s
conquest of this are low labour efficiency, factor immobility, limited specialization in
occupation and a value structure and social structure that minimize the incentives for
economic changes.
6) Demographic Features : The underdeveloped countries are generally suffering
from the problem of over population. The main demographic characteristics of these
countries are - 1) Most of the underdeveloped countries are in the high population growth
potential stage with high birth rate and sharp declining death rate. 2) The overage
expectation of life in underdeveloped countries is much lower than that of advanced
countries. 3) The percentage of economically active population is very small in
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