Mobilisation of Resources
Introduction
For any country to grow and develop, it needs resources. These resources can be natural (land, minerals, forests, water), human (labour, skills, knowledge), or financial (savings, taxes, investments).
However, resources alone are not enough. They must be mobilised, which means collecting, organising, and using them effectively for national development.
In India, mobilisation of resources is extremely important because:
- We have a large population that requires jobs, education, and healthcare.
- We need infrastructure like roads, electricity, water, and housing.
- We want to achieve faster growth with inclusive development.
Thus, resource mobilisation becomes a key function of economic planning and policy-making.
What is Resource Mobilisation?
In simple terms:
👉 Resource Mobilisation means gathering and using financial, human, and natural resources in a planned manner to achieve economic development.
It has two important aspects:
- Raising resources – through taxes, savings, investment, external aid, etc.
- Utilising resources efficiently – for productive activities like building industries, providing education, improving agriculture, etc.
Types of Resources
| Type of Resource | Examples | Importance |
|---|---|---|
| Natural Resources | Land, minerals, coal, oil, water, forests | Base for agriculture, industries, energy |
| Human Resources | Labour, skills, knowledge, entrepreneurs | Drive production, innovation |
| Financial Resources | Savings, taxes, foreign capital, investments | Fund infrastructure, welfare, industries |
👉 Mobilisation of financial resources is the most important for economic planning, because money is needed to convert other resources into productive use.
Importance of Mobilisation of Resources
- Capital Formation – A developing country like India needs large capital to build industries, infrastructure, and modern technology. Mobilisation ensures people’s savings are channelled into investment.
- Reducing Poverty & Unemployment – Proper mobilisation helps fund welfare schemes, employment generation, and skill development.
- Balanced Regional Growth – Ensures resources reach backward states, not just advanced ones.
- Social Development – Provides money for health, education, sanitation, and housing.
- Self-Reliance – Reduces dependence on foreign aid by mobilising domestic savings and taxes.
- Faster Economic Growth – Ensures agriculture, industry, and services all get the required funds.
Mobilisation of Financial Resources in India
Financial resource mobilisation in India happens mainly through:
- Public Sector (Government)
- Private Sector (Households, Businesses, Corporates)
- External Sector (Foreign aid, loans, investments)
Let’s see each in detail.
1. Public Sector (Government Resources)
The government mobilises resources mainly through taxes and non-tax revenue.
| Source | Examples | Role |
|---|---|---|
| Taxes | Income tax, GST, customs duty, excise duty, corporate tax | Main source of government revenue |
| Non-tax revenue | Dividends from PSUs, fees, fines, interest | Additional income |
| Borrowings | Market loans, bonds, treasury bills | For meeting fiscal deficit |
| Public enterprises | Railways, ONGC, LIC | Generate income through operations |
👉 India’s tax-to-GDP ratio is around 11–12%, lower than developed countries (~25–30%), meaning India needs to improve tax collection.
2. Private Sector Resources
The private sector includes households, businesses, and corporations.
- Household savings are the biggest source of domestic capital.
- Savings are mobilised through:
- Banks (FDs, savings accounts)
- Insurance (LIC, private insurers)
- Stock market (mutual funds, shares)
| Year | Household Savings (% of GDP) | Private Corporate Savings (% of GDP) |
|---|---|---|
| 1990 | 20% | 3% |
| 2000 | 23% | 5% |
| 2020 | 29% | 7% |
👉 Mobilising these savings into productive investment is crucial for economic growth.
3. External Resources
India also mobilises resources from outside sources like:
- Foreign Direct Investment (FDI)
- Foreign Portfolio Investment (FPI)
- External loans and grants
- NRI deposits
| Year | FDI Inflows (US$ Billion) |
|---|---|
| 2000–01 | 4.0 |
| 2010–11 | 25.8 |
| 2020–21 | 64.0 |
| 2021–22 | 83.6 (record high) |
👉 FDI brings not just money but also technology and expertise, helping India’s development.
Challenges in Mobilisation of Resources in India
Despite progress, India faces several obstacles:
- Low Tax Compliance – Many people avoid paying taxes.
- Large Informal Economy – Around 80% of India’s workforce is in the informal sector, where income is not properly recorded.
- Poverty and Low Savings – Poor people cannot save or invest much.
- Black Money – Large amounts of unaccounted wealth reduce effective mobilisation.
- Regional Imbalance – Rich states contribute more, poor states contribute less.
- Political Populism – Freebies and subsidies reduce government’s ability to invest in development.
Steps Taken by the Government
To improve mobilisation, India has introduced many reforms:
| Reform / Initiative | Objective |
|---|---|
| GST (2017) | Simplified indirect tax system, improved tax compliance |
| Direct Tax Code (Proposed) | Simplify direct taxes, widen base |
| Digital India & UPI | Promote digital payments, reduce black money |
| Jan Dhan Yojana | Encourage financial inclusion, savings accounts |
| Insolvency and Bankruptcy Code | Better recovery of loans |
| Atmanirbhar Bharat Package | Mobilise domestic resources for self-reliance |
| FDI Reforms | Opened sectors like defence, telecom, retail |
Role of Planning in Resource Mobilisation
Mobilisation is not just about collecting resources but also about using them effectively. That’s where planning comes in.
- In the Five-Year Plans, resource mobilisation was always a major focus.
- Example:
- First Plan (1951–56) – Focused on agriculture and irrigation.
- Second Plan (1956–61) – Heavy industries and infrastructure.
- NITI Aayog (post-2015) – Focuses on sustainable and balanced resource use.
Mobilisation of Natural Resources
Apart from financial resources, India must also mobilise natural resources wisely:
- Land – Used for agriculture, housing, industries.
- Minerals – Coal, iron ore, bauxite for industries and energy.
- Water – Irrigation, drinking water, hydro power.
- Forests – Timber, biodiversity, environment balance.
👉 Overuse or misuse of natural resources can lead to environmental crisis. Hence, resource mobilisation must be sustainable.
Mobilisation of Human Resources
India has one of the largest youth populations in the world. Mobilising this human resource is key.
- Education – improves productivity.
- Skill Development – through schemes like Skill India Mission.
- Healthcare – healthy workforce is more productive.
- Employment Programmes – MGNREGA, Startup India create opportunities.
| Factor | 1950s | 2023 | Progress |
|---|---|---|---|
| Literacy Rate | 18% | 77% | Improved education |
| Life Expectancy | 32 years | 70+ years | Better healthcare |
| Workforce | Mostly agriculture | Shift to services | Structural change |
Sustainable Mobilisation of Resources
Mobilisation must be done in a way that:
- Does not damage the environment.
- Balances growth with social equity.
- Promotes renewable energy and green technology.
Examples:
- Solar and wind energy projects.
- Afforestation and water conservation.
- Electric vehicles and clean transport.
Way Forward
For better mobilisation of resources, India should:
- Increase Tax Base – Reduce evasion, widen coverage.
- Promote Financial Inclusion – More people should use banks, insurance, pensions.
- Encourage Savings & Investment – Higher interest rates, safe investment options.
- Attract More FDI – With stable policies and ease of doing business.
- Curb Black Money – Strict action on corruption and money laundering.
- Promote Human Resource Development – Education, skill training, healthcare.
- Ensure Sustainable Use of Natural Resources – Renewable energy, conservation.
Conclusion
Mobilisation of resources is the backbone of India’s economic development. Without proper mobilisation, even rich countries cannot grow, and with effective mobilisation, even resource-poor nations can achieve prosperity.
India has made good progress in mobilising financial, human, and natural resources, but challenges like poverty, inequality, tax evasion, and environmental degradation remain.
If India can mobilise resources efficiently and use them wisely, it will be able to achieve its dream of becoming a $5 trillion economy and a developed nation in the coming decades.
