Obstacles of Economic Development in India | Obstacles to Economic Development

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Hi friends, in today’s article we are going to know about the obstacles of Economic development in India or the obstacles in Economic development. So let’s discuss in details.

There are many barriers and difficulties in the way of economic development of less developed or third world countries. In developing countries there are both economic and non economic obstacles or barriers to economic development.

Obstacles of Economic development in India

Following are the 5 obstacles of economic development in India or the third world countries.

Market Imperfection – Market imperfections are largely responsible for the under development of any country. The price rigidity, factor immobility, rigid social structures, lack of knowledge of marketplace conditions, etc. are the major factors that prevent the smooth functioning and then development of an economy.

Vicious Circle of Poverty – According to Ranger Nurkse, vicious circle of poverty is the greatest obstacle in the way of economic  development. In developing countries there is low income that leads to low saving and low investment which stops the economic development.

Under utilization of Natural Resources – Although there is adequate natural resources in all developing countries but due to the improper utilization of natural resources development is remain low.

Backward State Technology – Due to use of backward technology productivity level of our labour and its efficiency is very low. Productive quantity and quality is also inferior due to the use of old means or methods of production.

Inflation – High rate of inflation is also a obstacles for economic development or a hurdle in the way of economic development. Due to inflation purchasing power of people decreases, their consumption and saving also decreases. Low saving results in less investment and a country remains poor and backward.

Non Economic Obstacles in Economic development

Political Instability – Due to political instability, the policies of the government are also instable and the rate of economic growth and development remains low in all the sectors of the economy.

Misuse of Authorities – Misuse of authorities and powers is a big problem in the way of economic development. Misuse of authority leads to corruption and nepotism.

Rapidly rising Population – In developing countries population growth rate is very high. The rapid backward population growth is also a difficulties or barriers in the way of economic development. This rapidly increasing population leads to starvation and various social crimes.

Customs and Traditions – In developing countries like India, people spend huge portion of their incomes on customs and traditions. Sometimes they have to take part in the arrangement of rural festivals that reduce their savings.

Joint family and Caste System – In joint family system all the members of the family do not work. They depend upon one another. Similarly, due to caste system rich and superior class do not work hard.


Economic development in developing countries is facing lots of problem. It is very difficult to remove all the obstacles to economic development but not impossible. Government should adopt self-reliance policy and adopt modern technology to remove these complications.

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Hi, this is Eusub Ali Khan, Author & Owner of KhanStudy.in. I am a Content Writer, blogger and professional web-designer. I love to share my educational knowledge with people.

2 thoughts on “Obstacles of Economic Development in India | Obstacles to Economic Development”

  1. I’m new to economics, but this explanation is very good and simple to understand the economy of India .


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