EFFECTS OF POPULATION EXPLOSION ON INDIAN ECONOMY

Population growth leads to the increase in poverty in developing countries in more than one way. First, rapid population growth swallows up a large part of annual increments in national income brought about by increase in investment or capital formation so that per capita income or level of welfare does not increase much. Thus savings and rate of capital formation remain low, reduction in per capita income, rise in general price level leading to sharp rise in cost of living. No improvement in agricultural and industrial technology, shortage of essential commodities, low standard of living, mass unemployment etc. Population growth and development, found that with rapid growth of population and labour force more resources need to be used for expansion of social expenditure on parks, hospitals roads, houses etc. and little resources are left for increase in capital per worker to raise labour productivity. This hinders higher growth in income per capita. A vicious circle of poverty operates in this regard. A rapid population growth lowers labour productivity which causes poverty, poverty causes high fertility rate which in turn causes high population growth rate. There is no wonder then that according to the poverty criteria fixed by Rangarajan Expert Committee 400 million people in India lived below the poverty line in 2011-12. As a result the entire economy of an underdeveloped country is surrounded by the vicious circle of poverty.