The term underdevelopment means different to different

people.Some Western economists consider

underdevelopment as absence of development.
According to Jacob Viner, underdeveloped economy is
that economy which has good potential prospects for
utilising greater capital or labour or natural resources or
all of them,to support higher standards of living or "if its
per capita income level is already fairly high to support a
larger population on a not lower level of living.
India is a developing or say an underdeveloped
economy . India has to face some basic economic
problems for which it has pulled under the head as
underdeveloped country.There are some basic
highlights on the problems as such:-

01.Dominance of Agriculture
India ranks second worldwide in farm output. Agriculture
and allied sectors like forestry, logging and fishing
accounted for 18.6% of the GDP in 2005, employed 60% of
the total workforce[1] and despite a steady decline of its share
in the GDP, is still the largest economic sector and plays a
significant role in the overall socio-economic development of
India. Yields per unit area of all crops have grown since
1950, due to the special emphasis placed on agriculture in
the five-year plans and steady improvements in irrigation,
technology, application of modern agricultural practices and
provision of agricultural credit and subsidies since the
green revolution. However, international comparisons
reveal that the average yield in India is generally 30% to
50% of the highest average yield in the world
 02. Per capita income

The economy of India is the fourth largest in the world as

measured by purchasing power parity (PPP), with a
gross domestic product (GDP) of US $3.611 trillion.[1] When
measured in USD exchange-rate terms, it is the twelfth largest
in the world, with a GDP of US $719.8 billion (2005).[1] India is
the second fastest growing major economy in the world, with a
GDP growth rate of 8.4%[2] at the end of the first quarter of
2005–2006. However, India's huge population results in a
relatively low per capita income of $3,300 at PPP and $714 at
nominal
03. Poverty
The recent ecenomic developments have mainly helped upper
and middle class Indians. India still has some poverty: 34.7% of
India's poorest population (the population that lives on 3/4 of
the poverty line or less) still live on less than US$1 a day and
79.9% live on US$2 per day.[58] The National sample survey
organisation (NSSO) estimated that 26.1% of the population
was living below the poverty line in 1999–2000, down from
51.3% in 1977–1978. The criterion used was monthly
consumption of goods below Rs. 211.30 for rural areas and Rs.
454.11 for urban areas. 75% of the poor are in rural areas
(27.1% of the total rural population) with most of them
comprising daily wagers, self-employed households and landless
labourers. The major causes for poverty are unemployment or
under-employment, low ownership of assets (especially
productive assets like land and farm equipment)
 04. Population growth
India, with a population of 1.095 billion people, is the second most
populous country in the world, accounting for one in six humans.
Growth rate of population has decreased from a compound annual
growth rate of 2.15 (1951–81) to 1.38% (2005–06),[1] despite the
decrease in the death rates owing to improvements in health care.
The large population puts further pressure on infrastructure and
social services. A positive factor has been the large working-age
population, which forms 45.33% of the population and is expected to
increase substantially, because of the decreasing dependency ratio.
Increased rates of literacy, better health care and self-sufficiency in
food production in recent times have ensured that a large population
has not caused any serious problems.[35][24] The national labour
market has been tightly regulated by successive governments ever
since the Workmen's Compensation Act was passed in 1923
05.Corruption