Economy of India

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Economy of India
From Wikipedia, the free encyclopedia
"Dollar" and "$" refer throughout to Economy of The Republic of India

the US dollar.
The Economy of India is the eleventh

largest in the world by nominal GDP[1] and
the fourth largest by purchasing power parity
(PPP).[1] The country's per capita GDP (PPP)
is $3,290 (IMF, 127th) in 2010.[1] Following
strong economic reforms from the post-
independence socialist economy, the
country's economic growth progressed at a
rapid pace, as free market principles were
initiated in 1991 for international
competition and foreign investment.[9]
Modern Indian currency notes

Contents Rank 11th (nominal) / 4th (PPP)
■ 1 Overview Currency 1 Indian Rupee (INR) ( ) = 100 Paise
■ 2 History
■ 2.1 Pre-colonial period (up to Fiscal year Calendar year (1 April – 31 March)
1773) Trade WTO, SAFTA, G-20 and others
■ 2.2 Colonial period (1773– organizations
1947)
■ 2.3 Pre-liberalisation period Statistics
(1947–1991)
GDP
■ 2.4 Post-liberalisation period $1.43 trillion (nominal: 11th; 2010)[1]
(since 1991)
■ 3 Sectors $4.00 trillion (PPP: 4th; 2010)[1]
■ 3.1 Industry and services GDP growth 8.2% (2010, Q3)[2]
■ 3.2 Agriculture
■ 3.3 Banking and finance GDP per capita
■ 3.4 Energy and power $1,176 (nominal: 137th; 2010)[1]
■ 4 External trade and investment $3,290 (PPP: 127th; 2010)[1]

■ 4.1 Global trade relations
■ 4.2 Balance of payments GDP by sector services (55.3%), industry (28.6%),
■ 4.3 Foreign direct investment agriculture (16.1%) (2010)
in India Inflation (CPI) 8.43% (December 2010)[3]
■ 5 Currency
Population 37% (2010)[4]
■ 6 Income and consumption
■ 7 Employment below poverty
■ 8 Economic trends and issues line
■ 8.1 Agriculture
Gini index 36.8 (List of countries)
■ 8.2 Corruption
http://en.wikipedia.org/wiki/Economy_of_India 3/13/2011
■ 8.3 Education Labour force 478 million (2nd; 2009)

■ 8.4 Infrastructure
■ 8.5 Economic disparities Labour force agriculture (52%), industry (14%),
■ 9 See also by occupation services (34%) (2009 est.)
■ 10 Notes Unemployment 9.4% (2009–10)[5]
■ 11 References
■ 12 Further reading Main industries telecommunications, textiles, chemicals,
■ 13 External links food processing, steel, transportation
equipment, cement, mining, petroleum,
machinery, information technology,
Overview pharmaceuticals
Ease of Doing 134th[6]
Social democratic policies governed India's
economy from 1947 to 1991. The economy Business Rank
was characterised by extensive regulation, External
protectionism, public ownership, pervasive
corruption and slow growth.[10][11][12] Since Exports $201 billion (22nd; 2010)
1991, continuing economic liberalisation has Export goods petroleum products, precious stones,
moved the country towards a market-based
machinery, iron and steel, chemicals,
economy.[10][11] A revival of economic
vehicles, apparel
reforms and better economic policy in first
decade of the 21st century accelerated India's Main export UAE 12.87%, United States 12.59%,
economic growth rate. In recent years, Indian partners China 5.59% (2009)
cities have continued to liberalise business
regulations.[6] By 2008, India had established Imports $327 billion (11th; 2010)
itself as the world's second-fastest growing Import goods crude oil, precious stones, machinery,
major economy.[13] fertilizer, iron and steel, chemicals
However, as a result of the financial crisis of Main import China 10.94%, United States 7.16%,
2007–2010, coupled with a poor monsoon, partners Saudi Arabia 5.36%, UAE 5.18%,
India's gross domestic product (GDP) growth Australia 5.02%, Germany 4.86%,
rate significantly slowed to 6.7% in 2008–09,
but subsequently recovered to 7.2% in 2009– Singapore 4.02% (2009)
10, while the fiscal deficit rose from 5.9% to FDI stock $35.6 billion (2009-10)
a high 6.5% during the same period.[14]
India’s current account deficit surged to Gross external $237.1 billion (2010 est.)
4.1% of GDP during Q2 FY11 against 3.2% debt
the previous quarter. The unemployment rate Public finances
for 2009–2010, according to the state Labour
Bureau, was 9.4% nationwide, rising to Public debt $758 billion (2010)[7] 55.9% of GDP
10.1% in rural areas, where two-thirds of the
Revenues $170.7 billion (2010 est.)
1.2 billion population live.[5]
Expenses $257.4 billion (2010 est.)
India's large service industry accounts for
55.3% of the country's GDP while the Economic aid $1.724 billion (2005)[8]
industrial and agricultural sector contribute Credit rating 1.164 trillion (2010 est.)
28.6% and 16.1% respectively.[15]
Agriculture is the predominant occupation in Foreign reserves $301 billion (7th; Feb 2011)
India, accounting for about 52% of
employment. The service sector makes up a Main data source: CIA World Fact Book
further 34%, and industrial sector around
(https://www.cia.gov/library/publications/the-world-
14%.[16] However, statistics from a 2009-10
government survey, which used a smaller factbook/geos/in.html)
sample size than earlier surveys, suggested All values, unless otherwise stated, are in US dollars
that the share of agriculture in employment
had dropped to 45.5%.[5]
Major industries include telecommunications, textiles, chemicals, food processing, steel, transportation
equipment, cement, mining, petroleum, machinery, information technology-enabled services and
pharmaceuticals.[17] The Labour force totals 500 million workers. Major agricultural products include
rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep, goats, poultry and
fish.[17] In 2009-2010, India's top five trading partners are United Arab Emirates, China, United States,
Saudi Arabia and Germany.
Previously a closed economy, India's trade and business sector has grown fast.[10] India currently
accounts for 1.5% of world trade as of 2007 according to the World Trade Statistics of the WTO in
2006, which valued India's total merchandise trade (counting exports and imports) at $294 billion and
India's services trade at $143 billion. Thus, India's global economic engagement in 2006 covering both
merchandise and services trade was of the order of $437 billion, up by a record 72% from a level of
$253 billion in 2004. India's total trade in goods and services has reached a share of 43% of GDP in
2005–06, up from 16% in 1990–91.[18]
History
Main articles: Economic history of India and Timeline of the economy of India
Pre-colonial period (up to 1773)

The citizens of the Indus Valley civilisation, a permanent
settlement that flourished between 2800 BC and 1800 BC,
practiced agriculture, domesticated animals, used uniform
weights and measures, made tools and weapons, and traded with
other cities. Evidence of well planned streets, a drainage system
and water supply reveals their knowledge of urban planning,
which included the world's first urban sanitation systems and the
existence of a form of municipal government.[20]
The spice trade between India and Maritime trade was carried out extensively between South India
Europe was the main catalyst for the and southeast and West Asia from early times until around the
Age of Discovery.[19] fourteenth century AD. Both the Malabar and Coromandel
Coasts were the sites of important trading centres from as early
as the first century BC, used for import and export as well as
transit points between the Mediterranean region and southeast Asia.[21] Over time, traders organised
themselves into associations which received state patronage. However, state patronage for overseas trade
came to an end by the thirteenth century AD, when it was largely taken over by the local Jewish and
Muslim communities, initially on the Malabar and subsequently on the Coromandel coast.[22] Further
north, the Saurashtra and Bengal coasts played an important role in maritime trade, and the Gangetic
plains and the Indus valley housed several centres of river-borne commerce. Most overland trade was
carried out via the Khyber Pass connecting the Punjab region with Afghanistan and onward to the
Middle East and Central Asia.[23] Although many kingdoms and rulers issued coins, barter was
prevalent. Villages paid a portion of their agricultural produce as revenue to the rulers, while their
craftsmen received a part of the crops at harvest time for their services.[24]
Religion, especially Hinduism and the caste and the joint family systems, played an influential role in
shaping economic activities.[25] The caste system functioned much like medieval European guilds,
ensuring the division of labour, providing for the training of apprentices and, in some cases, allowing
manufacturers to achieve narrow specialisation. For instance, in certain regions, producing each variety
of cloth was the specialty of a particular sub-caste. Textiles such as muslin, Calicos, shawls, and
agricultural products such as pepper, cinnamon, opium and indigo were exported to Europe, the Middle
East and South East Asia in return for gold and silver.[26]
Assessment of India's pre-colonial economy is mostly qualitative, owing to the lack of quantitative
information. The Mughal economy functioned on an elaborate system of coined currency, land revenue
and trade. Gold, silver and copper coins were issued by the royal mints which functioned on the basis of
free coinage.[27] The political stability and uniform revenue policy resulting from a centralised
administration under the Mughals, coupled with a well-developed internal trade network, ensured that
India, before the arrival of the British, was to a large extent economically unified, despite having a
traditional agrarian economy characterised by a predominance of subsistence agriculture dependent on
primitive technology.[28] After the decline of the Mughals, western, central and parts of south and north
India were integrated and administered by the Maratha Empire. After the loss at the Third Battle of
Panipat, the Maratha Empire disintegrated into several confederate states, and the resulting political
instability and armed conflict severely affected economic life in several parts of the country, although
this was compensated for to some extent by localised prosperity in the new provincial kingdoms. [29] By
the end of the eighteenth century, the British East India Company entered the Indian political theatre and
established its dominance over other European powers. This marked a determinative shift in India's
trade, and a less powerful impact on the rest of the economy.[30]
Colonial period (1773–1947)
There is no doubt that our grievances against the

British Empire had a sound basis. As the painstaking
statistical work of the Cambridge historian Angus
Maddison has shown, India's share of world income
collapsed from 22.6% in 1700, almost equal to
Europe's share of 23.3% at that time, to as low as
3.8% in 1952. Indeed, at the beginning of the 20th
Century, "the brightest jewel in the British Crown"
was the poorest country in the world in terms of per
capita income. An aerial view of Calcutta Port taken
in 1945. Calcutta, which was the
– Manmohan Singh[31] economic hub of British India, saw
increased industrial activity during
World War II.
Company rule in India brought a major change in the taxation and agricultural policies, which tended to
promote commercialisation of agriculture with a focus on trade, resulting in decreased production of
food crops, mass impoverishment and destitution of farmers, and in the short term, led to numerous
famines.[32] The economic policies of the British Raj caused a severe decline in the handicrafts and
handloom sectors, due to reduced demand and dipping employment.[33] After the removal of
international restrictions by the Charter of 1813, Indian trade expanded substantially and over the long
term showed an upward trend.[34] The result was a significant transfer of capital from India to England,
which, due to the colonial policies of the British, led to a massive drain of revenue rather than any
systematic effort at modernisation of the domestic economy.[35]
India's colonisation by the British created an institutional

environment that, on paper, guaranteed property rights among
the colonisers, encouraged free trade, and created a single
currency with fixed exchange rates, standardised weights and
measures and capital markets. It also established a well
developed system of railways and telegraphs, a civil service that
aimed to be free from political interference, a common-law and
Estimates of the per capita income of an adversarial legal system.[37] This coincided with major
India (1857–1900) as per 1948–49 changes in the world economy – industrialisation, and significant
prices. [36] growth in production and trade. However, at the end of colonial
rule, India inherited an economy that was one of the poorest in
the developing world,[38] with industrial development stalled,
agriculture unable to feed a rapidly growing population, a largely illiterate and unskilled labour force,
and extremely inadequate infrastructure.[39]
The 1872 census revealed that 91.3% of the population of the region constituting present-day India
resided in villages,[40] and urbanisation generally remained sluggish until the 1920s, due to the lack of
industrialisation and absence of adequate transportation. Subsequently, the policy of discriminating
protection (where certain important industries were given financial protection by the state), coupled with
the Second World War, saw the development and dispersal of industries, encouraging rural-urban
migration, and in particular the large port cities of Bombay, Calcutta and Madras grew rapidly. Despite
this, only one-sixth of India's population lived in cities by 1951. [41]
The impact of the British rule on India's economy is a controversial topic. Leaders of the Indian
independence movement and left-nationalist economic historians have blamed colonial rule for the
dismal state of India's economy in its aftermath and argued that financial strength required for industrial
development in Europe was derived from the wealth taken from colonies in Asia and Africa. At the
same time, right-wing historians have countered that India's low economic performance was due to
various sectors being in a state of growth and decline due to changes brought in by colonialism and a
world that was moving towards industrialisation and economic integration.[42]
Pre-liberalisation period (1947–1991)

Indian economic policy after independence was influenced by the colonial experience, which was seen
by Indian leaders as exploitative, and by those leaders' exposure to democratic socialism as well as the
progress achieved by the economy of the Soviet Union.[39] Domestic policy tended towards
protectionism, with a strong emphasis on import substitution industrialisation, economic
interventionism, a large public sector, business regulation, and central planning,[43] while trade and
foreign investment policies were relatively liberal.[44] Five-Year

Plans of India resembled central planning in the Soviet Union.
Steel, mining, machine tools, telecommunications, insurance,
and power plants, among other industries, were effectively
nationalised in the mid-1950s.[45]
Jawaharlal Nehru, the first prime minister of India, along with

the statistician Prasanta Chandra Mahalanobis, formulated and
oversaw economic policy during the initial years of the country's Compare India (orange) with South
existence. They expected favorable outcomes from their strategy, Korea (yellow). Both started from
involving the rapid development of heavy industry by both
about the same income level in 1950.
public and private sectors, and based on direct and indirect state
intervention, rather than the more extreme Soviet-style central The graph shows GDP per capita of
South Asian economies and South
command system.[46][47] The policy of concentrating
simultaneously on capital- and technology-intensive heavy Korea as a percentage of the
industry and subsidising manual, low-skill cottage industries was American GDP per capita.
criticised by economist Milton Friedman, who thought it would
waste capital and labour, and retard the development of small
manufacturers.[48] The rate of growth of the Indian economy in the first three decades after independence
was derisively referred to as the Hindu rate of growth, because of the unfavourable comparison with
growth rates in other Asian countries, especially the East Asian Tigers.[49][50]
Since 1965, the use of high-yielding varieties of seeds, increased fertilisers and improved irrigation
facilities collectively contributed to the Green Revolution in India, which improved the condition of
agriculture by increasing crop productivity, improving crop patterns and strengthening forward and
backward linkages between agriculture and industry.[51] However, it has also been criticised as an
unsustainable effort, resulting in the growth of capitalistic farming, ignoring institutional reforms and
widening income disparities.[52]
Post-liberalisation period (since 1991)

Main articles: Economic liberalisation in India and Economic development in India
In the late 1970s, the government led by Morarji Desai eased restrictions on capacity expansion for
incumbent companies, removed price controls, reduced corporate taxes and promoted the creation of
small scale industries in large numbers. However, the subsequent government policy of Fabian socialism
hampered the benefits of the economy, leading to high fiscal deficits and a worsening current account.
The collapse of the Soviet Union, which was India's major trading partner, and the Gulf War, which
caused a spike in oil prices, resulted in a major balance-of-payments crisis for India, which found itself
facing the prospect of defaulting on its loans.[53] India asked for a $1.8 billion bailout loan from the
International Monetary Fund (IMF), which in return demanded reforms.[54]
In response, Prime Minister Narasimha Rao, along with his finance minister Manmohan Singh, initiated
the economic liberalisation of 1991. The reforms did away with the Licence Raj, reduced tariffs and
interest rates and ended many public monopolies, allowing automatic approval of foreign direct
investment in many sectors.[55] Since then, the overall thrust of liberalisation has remained the same,
although no government has tried to take on powerful lobbies such as trade unions and farmers, on
contentious issues such as reforming labour laws and reducing agricultural subsidies.[56] By the turn of
the 20th century, India had progressed towards a free-market economy, with a substantial reduction in
state control of the economy and increased financial liberalisation.[57] This has been accompanied by
increases in life expectancy, literacy rates and food security, although the beneficiaries have largely been
urban residents.[58]
While the credit rating of India was hit by its nuclear weapons tests in 1998, it has since been raised to
investment level in 2003 by S&P and Moody's.[59] In 2003, Goldman Sachs predicted that India's GDP
in current prices would overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan
by 2035, making it the third largest economy of the world, behind the US and China. India is often seen
by most economists as a rising economic superpower and is believed to play a major role in the global
economy in the 21st century.[60][61]
Sectors
Industry and services
See also: Information technology in India, Business process outsourcing in India, and Retailing in
India
Industry accounts for 28% of the GDP and employ 14% of the
total workforce.[16] In absolute terms, India is 12th in the world
in terms of nominal factory output.[64] The Indian industrial
sector underwent significantly changes as a result of the
economic reforms of 1991, which removed import restrictions,
brought in foreign competition, led to privatisation of certain
public sector industries, liberalised the FDI regime, improved
infrastructure and led to an expansion in the production of fast
moving consumer goods.[65] Post-liberalisation, the Indian
private sector was faced with increasing domestic as well as
foreign competition, including the threat of cheaper Chinese
India has one of the world's fastest
imports. It has since handled the change by squeezing costs,
revamping management, and relying on cheap labour and new growing automobile industries.[62]
technology. However, this has also reduced employment Shown here is the Tata Nano, the
generation even by smaller manufacturers who earlier relied on world's cheapest car.[63]
relatively labour-intensive processes.[66]
Textile manufacturing is the second largest source of employment after agriculture and accounts for
20% of manufacturing output, providing employment to over 20 million people.[67] Ludhiana produces
90% of woollens in India and is known as the Manchester of India. Tirupur has gained universal
recognition as the leading source of hosiery, knitted garments, casual wear and sportswear.[68]
India is 13th in services output. The services sector provides employment to 23% of the work force and
is growing quickly, with a growth rate of 7.5% in 1991–2000, up from 4.5% in 1951–80. It has the
largest share in the GDP, accounting for 55% in 2007, up from 15% in 1950.[16] Information technology
and business process outsourcing are among the fastest growing sectors, having a cumulative growth
rate of revenue 33.6% between 1997–98 and 2002–03 and contributing to 25% of the country's total
exports in 2007–08.[69] The growth in the IT sector is attributed to increased specialisation, and an
availability of a large pool of low cost, highly skilled, educated and fluent English-speaking workers, on
the supply side, matched on the demand side by increased demand from foreign consumers interested in
India's service exports, or those looking to outsource their operations. The share of the Indian IT
industry in the country's GDP increased from 4.8 % in 2005–06 to 7% in 2008.[70] In 2009, seven Indian
firms were listed among the top 15 technology outsourcing companies in the world.[71]
Mining forms an important segment of the Indian economy, with the country producing 79 different
minerals (excluding fuel and atomic resources) in 2009–10, including iron ore, manganese, mica,
bauxite, chromite, limestone, asbestos, fluorite, gypsum, ochre, phosphorite and silica sand.[72]
Organised retail supermarkets accounts for 24% of the market as of 2008.[73] Regulations prevent most
foreign investment in retailing. Moreover, over thirty regulations such as "signboard licences" and "anti-
hoarding measures" may have to be complied before a store can open doors. There are taxes for moving
goods from state to state, and even within states.[73] Tourism in India is relatively undeveloped, but
growing at double digits. Some hospitals woo medical tourism.[74]
Agriculture
Main articles: Agriculture in India, Forestry in India,
Animal husbandry in India, and Fishing in India
See also: Natural resources in India
India ranks second worldwide in farm output. Agriculture and

allied sectors like forestry, logging and fishing accounted for
15.7% of the GDP in 2009–10, employed 52.1% of the total
workforce, and despite a steady decline of its share in the GDP,
is still the largest economic sector and a significant piece of the
Farmers work inside a rice field in
overall socio-economic development of India.[77] Yields per unit
area of all crops have grown since 1950, due to the special Andhra Pradesh. India is the second
emphasis placed on agriculture in the five-year plans and steady largest producer of rice in the world
improvements in irrigation, technology, application of modern after China,[75] and Andhra Pradesh is
agricultural practices and provision of agricultural credit and the second largest rice producing
subsidies since the Green Revolution in India. However, state in India with West Bengal being
international comparisons reveal the average yield in India is the largest.[76]
generally 30% to 50% of the highest average yield in the world.
[78]
India receives an average annual rainfall of 1,208 millimetres (47.6 in) and a total annual precipitation of
4000 billion cubic metres, with the total utilisable water resources, including surface and groundwater,
amounting to 1123 billion cubic metres.[79] 546,820 square kilometres (211,130 sq mi) of the land area,
or about 39% of the total cultivated area, is irrigated.[80] India's inland water resources including rivers,
canals, ponds and lakes and marine resources comprising the east and west coasts of the Indian ocean
and other gulfs and bays provide employment to nearly six million people in the fisheries sector. In
2008, India had the world's third largest fishing industry.[81]
India is the largest producer in the world of milk, jute and pulses, and also has the world's second largest
cattle population with 175 million animals in 2008. [75] It is the second largest producer of rice, wheat,
sugarcane, cotton and groundnuts, as well as the second largest fruit and vegetable producer, accounting
for 10.9% and 8.6% of the world fruit and vegetable production respectively.[75] India is also the second
largest producer and the largest consumer of silk in the world, producing 77,000 million tons in 2005. [82]
Banking and finance

Main article: Finance in India
See also: Banking in India and Insurance in India
The Indian money market is classified into the organised sector, comprising private, public and foreign
owned commercial banks and cooperative banks, together known as scheduled banks, and the
unorganised sector, which includes individual or family owned indigenous bankers or money lenders
and non-banking financial companies.[83] The unorganised sector and microcredit are still preferred over
traditional banks in rural and sub-urban areas, especially for non-productive purposes, like ceremonies
and short duration loans.[84]
Prime Minister Indira Gandhi nationalised 14 banks in 1969, followed by six others in 1980, and made it
mandatory for banks to provide 40% of their net credit to priority sectors like agriculture, small-scale
industry, retail trade, small businesses, etc. to ensure that the banks fulfill their social and developmental
goals. Since then, the number of bank branches has increased from 8,260 in 1969 to 72,170 in 2007 and
the population covered by a branch decreased from 63,800 to 15,000 during the same period. The total
bank deposits increased from 5,910 crore (US$1.31 billion) in 1970–71 to
3,830,922 crore (US$850.46 billion) in 2008–09. Despite an increase of rural branches, from 1,860 or
22% of the total number of branches in 1969 to 30,590 or 42% in 2007, only 32,270 out of 500,000
villages are covered by a scheduled bank.[85][86]
India's gross domestic saving in 2006–07 as a percentage of GDP stood at a high 32.7%.[87] More than
half of personal savings are invested in physical assets such as land, houses, cattle, and gold.[88] The
public sector banks hold over 75% of total assets of the banking industry, with the private and foreign
banks holding 18.2% and 6.5% respectively.[89] Since liberalisation, the government has approved
significant banking reforms. While some of these relate to nationalised banks, like encouraging mergers,
reducing government interference and increasing profitability and competitiveness, other reforms have
opened up the banking and insurance sectors to private and foreign players.[16][90]
Energy and power

Main article: Energy policy of India
India's oil reserves meet 25% of the country's domestic oil

demand.[16][92] As of 2009, India's total proven oil reserves stood
at 775 million metric tonnes while gas reserves stood at 1074
billion cubic metres.[93] Oil and natural gas fields are located
offshore at Mumbai High, Krishna Godavari Basin and the
Cauvery Delta, and onshore mainly in the states of Assam,
Gujarat and Rajasthan.[93] India is the fourth largest consumer of
oil in the world and imported $82.1 billion worth of oil in the
first three quarters of 2010, which had an adverse effect on its As of 2010, India imported about
current account deficit.[91] The petroleum industry in India 70% of its crude oil requirements.[91]
mostly consists of public sector companies such as Oil and Shown here is an ONGC platform at
Natural Gas Corporation (ONGC), Hindustan Petroleum Mumbai High in the Arabian Sea, one
Corporation Limited (HPCL) and Indian Oil Corporation of the few sites of domestic
production.
Limited (IOCL). There are some major private Indian companies in the oil sector such as Reliance
Industries Limited (RIL) which operates the world's largest oil refining complex. [94]
As of 2010, India had an installed power generation capacity of

164,835 megawatts (MW), of which thermal power contributed
64.6%, hydroelectricity 24.7%, other sources of renewable
energy 7.7%, and nuclear power 2.9%.[95] India meets most of its
domestic energy demand through its 106 billion tonnes of coal
reserves.[96] India is also rich in certain renewable sources of India has the world's fifth largest
energy with significant future potential such as solar, wind and wind power industry, with an
biofuels (jatropha, sugarcane). India's huge thorium reserves –
installed wind power capacity of
about 25% of world's reserves – are expected to fuel the
country's ambitious nuclear energy program in the long-run. 9,587 MW. Shown here is a wind
India's dwindling uranium reserves stagnated the growth of farm in Muppandal, Tamil Nadu.
nuclear energy in the country for many years.[97] However, the
Indo-US nuclear deal has paved the way for India to import uranium from other countries.[98]
External trade and investment

Further information: Globalisation in India and List of the largest trading partners of India
Global trade relations

Until the liberalisation of 1991, India was
largely and intentionally isolated from the
world markets, to protect its economy and to
achieve self-reliance. Foreign trade was
subject to import tariffs, export taxes and
quantitative restrictions, while foreign direct
investment (FDI) was restricted by upper-
limit equity participation, restrictions on
technology transfer, export obligations and
government approvals; these approvals were
needed for nearly 60% of new FDI in the A map showing the global distribution of Indian exports in
industrial sector. The restrictions ensured 2006 as a percentage of the top market (USA -
that FDI averaged only around $200 million $20,902,500,000).
annually between 1985 and 1991; a large
percentage of the capital flows consisted of
foreign aid, commercial borrowing and deposits of non-resident Indians.[99] India's exports were stagnant
for the first 15 years after independence, due to general neglect of trade policy by the government of that
period. Imports in the same period, due to industrialisation being nascent, consisted predominantly of
machinery, raw materials and consumer goods.[100]
Since liberalisation, the value of India's international trade has increased sharply,[101] with the
contribution of total trade in goods and services to the GDP rising from 16% in 1990–91 to 43% in 2005
–06.[18] India's major trading partners are the European Union, China, the United States and the United
Arab Emirates.[102] In 2006–07, major export commodities included engineering goods, petroleum
products, chemicals and pharmaceuticals, gems and jewellery, textiles and garments, agricultural
products, iron ore and other minerals. Major import commodities included crude oil and related
products, machinery, electronic goods, gold and silver.[103] In November 2010, exports increased 22.3%
year-on-year to 85,063 crore (US$18.88 billion), while imports were up 7.5% at
125,133 crore (US$27.78 billion). Trade deficit for the same month dropped from
46,865 crore (US$10.4 billion) in 2009 to 40,070 crore (US$8.9 billion) in 2010.[104]
India is a founding-member of General Agreement on Tariffs and Trade (GATT) since 1947 and its
successor, the WTO. While participating actively in its general council meetings, India has been crucial
in voicing the concerns of the developing world. For instance, India has continued its opposition to the
inclusion of such matters as labour and environment issues and other non-tariff barriers to trade into the
WTO policies.[105]
Balance of payments
Since independence, India's balance of payments on its current
account has been negative. Since economic liberalisation in the
1990s, precipitated by a balance of payment crisis, India's
exports rose consistently, covering 80.3% of its imports in 2002–
03, up from 66.2% in 1990–91.[106] However, the global
economic slump followed by a general deceleration in world
trade saw the exports as a percentage of imports drop to 61.4% in
Cumulative Current Account Balance
2008–09.[107] India's growing oil import bill is seen as the main 1980–2008 based on IMF data
driver behind the large current account deficit,[91] which rose to
$118.7 billion, or 9.7% of GDP, in 2008–09.[108] Between
January and October 2010, India imported $82.1 billion worth of crude oil.[91]
Due to the global late-2000s recession, both Indian exports and imports declined by 29.2% and 39.2%
respectively in June 2009.[109] The steep decline was because countries hit hardest by the global
recession, such as United States and members of the European Union, account for more than 60% of
Indian exports.[110] However, since the decline in imports was much sharper compared to the decline in
exports, India's trade deficit reduced to 25,250 crore (US$5.61 billion).[109]
India's reliance on external assistance and concessional debt has decreased since liberalisation of the
economy, and the debt service ratio decreased to from 35.3% in 1990–91 to 4.4% in 2008–09.[111] In
India, External Commercial Borrowings (ECBs), or commercial loans from non-resident lenders, are
being permitted by the Government for providing an additional source of funds to Indian corporates. The
Ministry of Finance monitors and regulates them through ECB policy guidelines issued by the Reserve
Bank of India under the Foreign Exchange Management Act of 1999.[112] India's foreign exchange
reserves have steadily risen from $5.8 billion in March 1991 to $283.5 billion in December 2009. [113]
Foreign direct investment in India

As the fourth-largest economy in the world in PPP terms,
Share of top five investing countries in FDI
India is a preferred destination for FDI;[115] India has
strengths in telecommunication, information technology inflows. (2000–2010)[114]
and other significant areas such as auto components, Inflows
Rank Country Inflows (%)
(million USD)
chemicals, apparels, pharmaceuticals, and jewellery.
1 Mauritius 50,164 42.00
Despite a surge in foreign investments, rigid FDI policies
2 Singapore 11,275 9.00
were a significant hindrance. However, due to positive
3 USA 8,914 7.00
economic reforms aimed at deregulating the economy 4 UK 6,158 5.00

and stimulating foreign investment, India has positioned 5 Netherlands 4,968 4.00
itself as one of the front-runners of the rapidly growing
Asia Pacific Region.[115] India has a large pool of skilled managerial and technical expertise. The size of
the middle-class population stands at 300 million and represents a growing consumer market.[116]
During 2000–10, the country attracted $178 billion as FDI.[117] The inordinately high investment from
Mauritius is due to routing of international funds through the country given significant tax advantages;
double taxation is avoided due to a tax treaty between India and Mauritius, and Mauritius is a capital
gains tax haven, effectively creating a zero-taxation FDI channel.[118]
India's recently liberalised FDI policy (2005) allows up to a 100% FDI stake in ventures. Industrial
policy reforms have substantially reduced industrial licensing requirements, removed restrictions on
expansion and facilitated easy access to foreign technology and foreign direct investment FDI. The
upward moving growth curve of the real-estate sector owes some credit to a booming economy and
liberalised FDI regime. In March 2005, the government amended the rules to allow 100% FDI in the
construction sector, including built-up infrastructure and construction development projects comprising
housing, commercial premises, hospitals, educational institutions, recreational facilities, and city- and
regional-level infrastructure.[119]
A number of changes were approved on the FDI policy to remove the caps in most sectors. Fields which
require relaxation in FDI restrictions include civil aviation, construction development, industrial parks,
petroleum and natural gas, commodity exchanges, credit-information services and mining. But this still
leaves an unfinished agenda of permitting greater foreign investment in politically sensitive areas such
as insurance and retailing. The total FDI equity inflow into India in 2008–09 stood at
122,919 crore (US$27.29 billion), a growth of 25% in rupee terms over the previous period. [120].
Currency
Main articles: Indian rupee and Reserve Bank of India
The Indian rupee is the only legal tender in India, and is also
accepted as legal tender in the neighbouring Nepal and Bhutan,
both of which peg their currency to that of the Indian rupee. The
rupee is divided into 100 paise. The highest-denomination
banknote is the 1,000 rupee note; the lowest-denomination coin
in circulation is the 10 paise coin.[121] However, with effect from
30 June 2011, 50 paise will be the minimum coin accepted in the
markets as all denominations below it will cease to be legal
currency.[122][123] India's monetary system is managed by the
Reserve Bank of India (RBI), the country's central bank.[124]
Established on 1 April 1935 and nationalised in 1949, the RBI
serves as the nation's monetary authority, regulator and
supervisor of the monetary system, banker to the government,
custodian of foreign exchange reserves, and as an issuer of
currency. It is governed by a central board of directors, headed
by a governor who is appointed by the Government of India.[125] The RBI headquarters in Mumbai
The rupee was linked to the British pound from 1927–1946 and then the U.S. dollar till 1975 through a
fixed exchange rate. It was devalued in September 1975 and the system of fixed par rate was replaced
with a basket of four major international currencies – the British pound, the U.S. dollar, the Japanese
yen and the Deutsche mark.[126] Since 2003, the rupee has been steadily appreciating against the U.S.
dollar.[127] In 2009, a rising rupee prompted the Government of India to purchase 200 tons of gold for
$6.7 billion from the IMF.[128]
Income and consumption

Main article: Income in India
See also: Poverty in India
India's gross national income per capita in 2008 was

$1040.[129] Indian official estimates of the extent of
poverty have been subject to debate, with concerns
being raised about the methodology for the
determination of the poverty line.[130][131] As of
2005, according to World Bank statistics, 75.6% of
the population lives on less than $2 a day (PPP),
while 41.6% of the population is living below the
new international poverty line of $1.25 (PPP) per
day.[132][133][134] However, data released in 2009 by
the Government of India estimates the percentage of
the population living below the poverty line to be
37%.[4]
A map showing the percentage of population living
Housing is modest. According to the Times of India, under the government poverty line from 1973-74 to
"a majority of Indians have per capita space 1999-2000.
equivalent to or less than a 10 feet x 10 feet room for
their living, sleeping, cooking, washing and toilet
needs", and "one in every three urban Indians lives
in homes too cramped to exceed even the minimum
requirements of a prison cell in the US."[135] The
average is 103 sq ft (9.6 m2) per person in rural areas
and 117 sq ft (10.9 m2) per person in urban areas.
[135]
Around half of Indian children are malnourished. World map showing the Gini coefficient, a measure
The proportion of underweight children is nearly of income inequality. India has a Gini coefficient of
double that of Sub-Saharan Africa.[136][137] However, 0.368.
India has not had any major famines since
Independence.[138] A 2007 report by the state-run
National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 65% of Indians, or
750 million people, lived on less than 20 (US$0.44) per day,[139] with most working in "informal labour
sector with no job or social security, living in abject poverty."[140]
Since the early 1950s, successive governments have implemented various schemes to alleviate poverty,
under central planning, that have met with partial success. All these programmes have relied upon the
strategies of the Food for work programme and National Rural Employment Programme of the 1980s,
which attempted to use the unemployed to generate productive assets and build rural infrastructure.[141]
In August 2005, the Parliament of India, in response to the perceived failure of economic growth to gene
rate employment for the rural poor, passed the Rural Employment Guarantee Bill into law, guaranteeing
100 days of minimum wage employment to every rural household in all the districts of India.[142] The
question of whether economic reforms have reduced poverty has fuelled debates without generating
clear-cut answers and has also increased political pressure against further economic reforms, especially
those involving the downsizing of labour and cutting agricultural subsidies. [143] Recent statistics in 2010
point out that the number of high income households has crossed lower income households.[144]
Employment
See also: Labour in India and Indian labour law
India’s labor regulations – among the most restrictive and complex in the world – have
constrained the growth of the formal manufacturing sector where these laws have their
widest application. Better designed labor regulations can attract more labor- intensive
investment and create jobs for India’s unemployed millions and those trapped in poor
quality jobs. Given the country’s momentum of growth, the window of opportunity
must not be lost for improving the job prospects for the 80 million new entrants who
are expected to join the work force over the next decade.
– World Bank: India Country Overview 2008.[145]
Agricultural and allied sectors accounted for about 52.1% of the total workforce in 2009–10.[77] While
agriculture has faced stagnation in growth, services have seen a steady growth. Of the total workforce,
7% is in the organised sector, two-thirds of which are in the public sector.[146] The NSSO survey
estimated that in 2004–05, 8.3% of the population was unemployed, an increase of 2.2% over 1993
levels, with unemployment uniformly higher in urban areas and among women.[147][148] Growth of
labour stagnated at around 2% for the decade between 1994–2005, about the same as that for the
preceding decade.[142] Avenues for employment generation have been identified in the IT and travel and
tourism sectors, which have been experiencing high annual growth rates of above 9%.[149]
Unemployment in India is characterised by chronic (disguised) unemployment. Government schemes

that target eradication of both poverty and unemployment (which in recent decades has sent millions of
poor and unskilled people into urban areas in search of livelihoods) attempt to solve the problem, by
providing financial assistance for setting up businesses, skill honing, setting up public sector enterprises,
reservations in governments, etc. The decline in organised employment due to the decreased role of the
public sector after liberalisation has further underlined the need for focusing on better education and has
also put political pressure on further reforms.[150] [151] India's labour regulations are heavy even by
developing country standards and analysts have urged the government to abolish or modify them in
order to make the environment more conducive for employment generation. [152][153] The 11th five-year
plan has also identified the need for a congenial environment to be created for employment generation,
by reducing the number of permissions and other bureaucratic clearences required.[154] Further,
inequalities and inadequacies in the education system have been identified as an obstacle preventing the
benefits of increased employment opportunities from reaching all sectors of society.[155]
Child labour in India is a complex problem that is basically rooted in poverty, coupled with a failure of
governmental policy, which has focused on subsidising higher rather than elementary education, as a
result benefiting the privileged rather than the poorer sections of society.[156] The Indian government is
implementing the world's largest child labour elimination program, with primary education targeted for
~250 million. Numerous non-governmental and voluntary organisations are also involved. Special
investigation cells have been set up in states to enforce existing laws banning the employment of
children under 14 in hazardous industries. The allocation of the Government of India for the eradication
of child labour was $21 million in 2007.[157] Public campaigns, provision of meals in school and other
incentives have proven successful in increasing attendance rates in schools in some states.[158]
In 2009–10, remittances from Indian migrants overseas stood at 250,000 crore (US$55.5 billion), the
highest in the world, but their share in FDI remained low at around 1%.[159] India ranked 133th on the
Ease of Doing Business Index 2010, behind countries such as China (89th), Pakistan (85th), and Nigeria
(125th).[160]
Economic trends and issues

In the revised 2007 figures, based on increased and sustaining
growth, more inflows into foreign direct investment, Goldman
Sachs predicts that "from 2007 to 2020, India’s GDP per capita
in US$ terms will quadruple", and that the Indian economy will
surpass the United States (in US$) by 2043.[12] In spite of the
high growth rate, the report stated that India would continue to
remain a low-income country for decades to come but could be a
"motor for the world economy" if it fulfills its growth potential. Shown here is a residential area in
[12]
Mumbai.
Agriculture
Main article: Agriculture in India
Slow agricultural growth is a concern for

policymakers as some two-thirds of India’s people
depend on rural employment for a living. Current
agricultural practices are neither economically nor
environmentally sustainable and India's yields for
many agricultural commodities are low. Poorly
maintained irrigation systems and almost universal
lack of good extension services are among the factors An Indian farmer
responsible. Farmers' access to markets is hampered
by poor roads, rudimentary market infrastructure, and
excessive regulation.
– World Bank: "India Country Overview 2008"[145]
India's population is growing faster than its ability to produce rice and wheat. [161] The low productivity
in India is a result of several factors. According to the World Bank, India's large agricultural subsidies
are hampering productivity-enhancing investment. While overregulation of agriculture has increased
costs, price risks and uncertainty, governmental intervention in labour, land, and credit markets are
hurting the market. Infrastructure and services are inadequate.[162] Further, the average size of land
holdings is very small, with 70% of holdings being less than one hectare in size.[163] The partial failure
of land reforms in many states, exacerbated by poorly maintained or non-existent land records, has
resulted in sharecropping with cultivators lacking ownership rights, and consequently low productivity
of labour.[164] Adoption of modern agricultural practices and use of technology is inadequate, hampered
by ignorance of such practices, high costs, illiteracy, slow progress in implementing land reforms,
inadequate or inefficient finance and marketing services for farm produce and impracticality in the case
of small land holdings. The allocation of water is inefficient, unsustainable and inequitable. The
irrigation infrastructure is deteriorating.[162] Irrigation facilities are inadequate, as revealed by the fact
that only 39% of the total cultivable land was irrigated as of 2010,[80] resulting in farmers still being
dependent on rainfall, specifically the monsoon season of India, which is often inconsistent and
unevenly distributed across the country.[165]
Corruption
Main article: Corruption in India
Corruption has been one of the pervasive problems affecting

India. The economic reforms of 1991 reduced the red tape,
bureaucracy and the Licence Raj that were largely blamed for the
institutionalised corruption and inefficiency.[166] Yet, a 2005
study by Transparency International (TI) found that more than
half of those surveyed had firsthand experience of paying bribe Overview of the index of perception
or peddling influence to get a job done in a public office.[167] of corruption, 2010
The Right to Information Act (2005) which requires government

officials to furnish information requested by citizens or face punitive action, computerisation of services,
and various central and state government acts that established vigilance commissions, have considerably
reduced corruption and opened up avenues to redress grievances. [167] The 2010 report by TI ranks India
at 87th place and states that significant setbacks were made by India in reducing corruption. [168]
The current government has concluded that most spending fails to reach its intended recipients. A large,
cumbersome and overworked bureaucracy also contributes to administrative inefficiency.[169] India's
absence rates are one of the worst in the world; one study found that 25% of public sector teachers and
40% of public sector medical workers could not be found at the workplace.[170][171]
The Indian economy continues to face the problem of an underground economy with a 2006 estimate by
the Swiss Banking Association suggesting that India topped the worldwide list for black money with
almost $1,456 billion stashed in Swiss banks. This amounts to 13 times the country's total external debt.
[172][173]
Education
Main article: Education in India
India has made huge progress in terms of

increasing primary education attendance rate
and expanding literacy to approximately two
thirds of the population.[174] The right to
education at elementary level has been made
one of the fundamental rights under the
eighty-sixth Amendment of 2002, and
legislation has been enacted to further the
objective of providing free education to all The number of people employed in non-agricultural
children.[175] However, the literacy rate of occupations in the public and private sectors. Totals are
65% is still lower than the worldwide rounded. Private sector data relates to non-agriculture
average and the country suffers from a high
[176] establishments with 10 or more employees.[141]
dropout rate. Further, there exist severe
disparities in literacy rates and educational
opportunities between males and females, urban and rural areas, and among different social groups.[177]
Infrastructure
See also: Transport in India, Indian Road Network, Ports in India, Electricity sector in India,
States of India by installed power capacity, Water supply and sanitation in India, and
Communications in India
In the past, development of infrastructure was completely in the

hands of the public sector and was plagued by slow progress,
poor quality and inefficiency.[178] India's low spending on power,
construction, transportation, telecommunications and real estate,
at $31 billion or 6% of GDP in 2002 had prevented India from
sustaining higher growth rates. This has prompted the
government to partially open up infrastructure to the private
sector allowing foreign investment,[141][179] and most public
infrastructure, barring railways, is today constructed and Shown here is the Chennai Port.
maintained by private contractors, in exchange for tax and other
concessions from the government.[180]
Some 600 million Indians have no electricity at all.[181] While

80% of Indian villages have at least an electricity line, just 44%
of rural households have access to electricity. Some half of the
electricity is stolen, compared with 3% in China. The stolen
electricity amounts to 1.5% of GDP.[182][183] Transmission and
distribution losses amount to around 20%, as a result of an
inefficient distribution system, handled mostly by cash-strapped
state-run enterprises.[184] Almost all of the electricity in India is Shown here is the Mumbai Pune
produced by the public sector. Power outages are common, and expressway in Maharashtra.
many buy their own power generators to ensure electricity
supply.[181] As of 2006–07 the electricity production was at 652.2
billion kWh, with an installed capacity of 128400 MW.[185] In

2007, electricity demand exceeded supply by 15%.[181] However,
reforms brought about by the Electricity Act of 2003 caused far-
reaching policy changes, including mandating the separation of
generation, transmission and distribution aspects of electricity,
abolishing licencing requirements in generation and opening up
the sector to private players, thereby paving the way for creating
a competitive market-based electricity sector.[186] Substantial
improvements in water supply infrastructure, both in urban and
rural areas, have taken place over the past decade, with the
proportion of the population having access to safe drinking water India has built numerous new airports
rising from 66% in 1991 to 92% in 2001 in rural areas, and from in recent years. Shown here is the
82% to 98% in urban areas. however, quality and availability of new Terminal 1D at the Indira
water supply remains a major problem even in urban India, with Gandhi International Airport in Delhi.
most cities getting water for only a few hours during the day.[187]
India has the world's third largest road network,[188] covering about 3.3 million kilometers and carrying
65% of freight and 80% of passenger traffic.[189] Container traffic is growing at 15% a year.[190] Internet
use is rare; there were only 7.57 million broadband lines in India in November 2009, however it is still
growing at slower rate and is expected to boom after the launch of 3G and wimax services.[191]
Economic disparities
Main articles: Economic disparities in India and Poverty in India
Lagging states need to bring more jobs to their people by creating an attractive
investment destination. Reforming cumbersome regulatory procedures, improving rural
connectivity, establishing law and order, creating a stable platform for natural resource
investment that balances business interests with social concerns, and providing rural
finance are important.
– World Bank: India Country Overview 2008[145]
A critical problem facing India's economy is the sharp and

growing regional variations among India's different states and
territories in terms of poverty, availability of infrastructure and
socio-economic development.[193] Six low-income states – Bihar,
Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa and Uttar
Pradesh – are home to more than one third of India's population.
[194]
Severe disparities exist among states in terms of income,
literacy rates, life expectancy and living conditions.[195]
The five-year plans, especially in the pre-liberalisation era,

attempted to reduce regional disparities by encouraging
industrial development in the interior regions and distributing
industries across states, but the results have not been very
encouraging since these measures in fact increased inefficiency
Slums next to high-rise commercial and hampered effective industrial growth.[196] After
buildings in Kochi. Hundreds of liberalisation, the more advanced states have been better placed
people, mostly comprising migrant to benefit from them, with well developed infrastructure and an
labourers who come to the city educated and skilled workforce, which attract the manufacturing
and service sectors. The union and state governments of
seeking job prospects, reside in such
backward regions are trying to reduce disparities by offering tax
shabby areas.[192] holidays, cheap land, etc., and focusing more on sectors like
tourism which, although being geographically and historically
determined, can become a source of growth and develops faster than other sectors.[197][198]
See also
■ Bilateral investment treaty
■ Economic reforms in India
■ Indian Construction Industry
■ Indian states ranking by families owning house
■ List of companies of India
■ List of the largest trading partners of India
■ Media of India
■ Net international investment position
■ Review of the Economy of India by Prime minister's Economic Advisory Council
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Bank. http://rru.worldbank.org/documents/publicpolicyjournal/272bhatia_Gulati.pdf. Retrieved 2009-06-21.
183. ^ Mark Gregory (2006-03-15). "India struggles with power
theft" (http://news.bbc.co.uk/2/hi/business/4802248.stm) . BBC.
http://news.bbc.co.uk/2/hi/business/4802248.stm. Retrieved 2010-01-03.
184. ^ Panagariya 2008, pp. 386–387
185. ^ Panagariya 2008, pp. 384
186. ^ Panagariya 2008, pp. 388–390
187. ^ Panagariya 2008, pp. 427–428
188. ^ "Infrastructure Rankings" (https://www.cia.gov/library/publications/the-world-
factbook/rankorder/2085rank.html) . CIA. https://www.cia.gov/library/publications/the-world-
factbook/rankorder/2085rank.html. Retrieved 2011-01-17.
189. ^ Panagariya 2008, pp. 403–404
190. ^ "Ageing Indian infrastructure causes congestion" (http://www.theage.com.au/news/business/ageing-indian-
infrastructure-causes-congestion/2005/09/21/1126982123165.html) . The Age (Melbourne). 2005-09-22.
http://www.theage.com.au/news/business/ageing-indian-infrastructure-causes-
congestion/2005/09/21/1126982123165.html.
191. ^ "Tele-base soars to 543m as mobile cos add record 17.65m in
Nov" (http://economictimes.indiatimes.com/News/News-By-Industry/Telecom/Tele-base-soars-to-543m-as-
mobile-cos-add-record-1765m-in-Nov/articleshow/5370510.cms) . Economic Times. 2009-12-23.
http://economictimes.indiatimes.com/News/News-By-Industry/Telecom/Tele-base-soars-to-543m-as-mobile-
cos-add-record-1765m-in-Nov/articleshow/5370510.cms. Retrieved 2009-12-23.
192. ^ "Winners and losers as India
booms" (http://news.bbc.co.uk/nolpda/ukfs_news/hi/newsid_6677000/6677645.stm) . BBC. 2007-05-21.
http://news.bbc.co.uk/nolpda/ukfs_news/hi/newsid_6677000/6677645.stm. Retrieved 2008-11-03.
194. ^ "Country Strategy for India (CAS) 2009–2012" (http://www.ukibc.com/ukindia2/files/India60.pdf) (PDF).
World Bank. http://www.ukibc.com/ukindia2/files/India60.pdf. Retrieved 2009-06-21.
195. ^ Drèze & Sen 1996, pp. 45–46
196. ^ Panagariya 2008, pp. 164–165
197. ^ Sachs, D. Jeffrey; Bajpai, Nirupam and Ramiah, Ananthi (2002). "Understanding Regional Economic
Growth in India" (http://web.archive.org/web/20070701042205/http://www2.cid.harvard.edu/cidwp/088.pdf)
(PDF). Working paper 88. Harvard University. Archived from the original
(http://www2.cid.harvard.edu/cidwp/088.pdf) on 2007-07-01.
http://web.archive.org/web/20070701042205/http://www2.cid.harvard.edu/cidwp/088.pdf.
198. ^ Kurian, N.J.. "Regional disparities in
india" (http://planningcommission.nic.in/reports/sereport/ser/vision2025/regdsprty.doc) . Planning
Commission of India. http://planningcommission.nic.in/reports/sereport/ser/vision2025/regdsprty.doc.
References
Books
■ Datt, Ruddar; Sundharam, K.P.M. (2009). Indian Economy. New Delhi: S. Chand Group. p. 976. ISBN 978-
81-219-0298-4.
■ Drèze, John; Sen, Amartya (1996). India: Economic Development and Social Opportunity. Oxford
University Press. p. 292. ISBN 978-0-19-564082-3.
■ Kumar, Dharma (2005). The Cambridge Economic History of India, Volume II : c. 1757 — 2003. New Delhi:
Orient Longman. p. 1115. ISBN 978-81-250-2710-2.
■ Nehru, Jawaharlal (1946). The Discovery of India. Penguin Books. ISBN 0-14-303103-1.
■ Panagariya, Arvind (2008). India: The Emerging Giant. Oxford University Press. p. 514. ISBN 978-0-19-
531503-5.
■ Raychaudhuri, Tapan; Habib, Irfan (2004). The Cambridge Economic History of India, Volume I : c. 1200 —
c. 1750. New Delhi: Orient Longman. p. 543. ISBN 978-81-250-2709-6.
■ Roy, Tirthankar (2006). The Economic History of India 1857–1947. Oxford University Press. p. 385.
ISBN 978-0-19-568430-8.
Papers and reports
■ "Economic reforms in India: Task force report" (http://harrisschool.uchicago.edu/News/press-releases/IPP%

20Economic%20Reform%20in%20India.pdf) (PDF). University of Chicago. pp. 32.
http://harrisschool.uchicago.edu/News/press-releases/IPP%20Economic%20Reform%20in%20India.pdf.
■ "Economic Survey 2009–10" (http://indiabudget.nic.in/es2009-10/chapt2010/chapter.zip) . Ministry of
Finance, Government of India. pp. 294. http://indiabudget.nic.in/es2009-10/chapt2010/chapter.zip. Retrieved
2010-11-22.
Further reading
Books
■ Alamgir, Jalal (2008). India's Open-Economy Policy. Routledge. ISBN 978-0-415-77684-4.

■ Bharadwaj, Krishna (1991). "Regional differentiation in India". In Sathyamurthy, T.V.. Industry &
agriculture in India since independence. Oxford University Press. pp. 189–199. ISBN 0-19-564394-1.
Articles
■ "Milton Friedman on the Nehru/Mahalanobis

Plan" (http://www.indiapolicy.org/debate/Notes/fried_opinion.html) .
http://www.indiapolicy.org/debate/Notes/fried_opinion.html. Retrieved 2005-07-16.
■ "Infrastructure in India: Requirements and favorable climate for foreign
investment" (http://www.asiatradehub.com/india/intro.asp) . http://www.asiatradehub.com/india/intro.asp.
■ Bernardi, Luigi and Fraschini, Angela (2005). Tax System And Tax Reforms In India
(http://ideas.repec.org/p/uca/ucapdv/45.html) . Working paper n. 51.
http://ideas.repec.org/p/uca/ucapdv/45.html.
■ Centre for Media Studies (2005) (PDF). India Corruption Study 2005: To Improve Governance Volume – I:
Key Highlights (http://www.prajanet.org/newsroom/internal/tii/ICS2k5_Vol1.pdf) . Transparency
International India. http://www.prajanet.org/newsroom/internal/tii/ICS2k5_Vol1.pdf. Retrieved 2009-06-21.
■ Ghosh, Jayati. "Bank Nationalisation: The
Record" (http://www.macroscan.com/cur/jul05/cur210705Bank_Nationalisation.htm) . Macroscan.
http://www.macroscan.com/cur/jul05/cur210705Bank_Nationalisation.htm. Retrieved 2005-08-05.
■ Gordon, Jim and Gupta, Poonam (2003) (PDF). Understanding India's Services Revolution
(http://www.imf.org/external/np/apd/seminars/2003/newdelhi/gordon.pdf) . 12 November 2003.
http://www.imf.org/external/np/apd/seminars/2003/newdelhi/gordon.pdf. Retrieved 2009-06-21.
■ Panagariya, Arvind (2004). India in the 1980s and 1990s: A Triumph of Reforms
(http://ideas.repec.org/p/wpa/wuwpit/0403005.html) . http://ideas.repec.org/p/wpa/wuwpit/0403005.html.
■ Sachs, D. Jeffrey; Bajpai, Nirupam and Ramiah, Ananthi (2002) (PDF). Understanding Regional Economic
Growth in India (http://web.archive.org/web/20070701042205/http://www2.cid.harvard.edu/cidwp/088.pdf) .
Working paper 88. Archived from the original (http://www2.cid.harvard.edu/cidwp/088.pdf) on 2007-07-01.
http://web.archive.org/web/20070701042205/http://www2.cid.harvard.edu/cidwp/088.pdf.
■ Srinivasan, T.N. (2002) (PDF). Economic Reforms and Global Integration (http://www.econ.yale.edu/%
7Esrinivas/ec_reforms.pdf) . 17 January 2002. http://www.econ.yale.edu/%7Esrinivas/ec_reforms.pdf.
■ Kurian, N.J.. "Regional disparities in
india" (http://planningcommission.nic.in/reports/sereport/ser/vision2025/regdsprty.doc) .
http://planningcommission.nic.in/reports/sereport/ser/vision2025/regdsprty.doc. Retrieved 2005-08-06.
News
■ "India says 21 of 29 states to launch new tax" (http://www.dailytimes.com.pk/default.asp?page=story_25-3-

2005_pg5_13) . Daily Times. 25 March 2005. http://www.dailytimes.com.pk/default.asp?page=story_25-3-
2005_pg5_13.
■ "Economic structure" (http://www.economist.com/countries/India/profile.cfm?folder=Profile%
2DEconomic%20Structure) . The Economist. 6 October 2003.
http://www.economist.com/countries/India/profile.cfm?folder=Profile%2DEconomic%20Structure.
■ "Regional stock exchanges – Bulldozed by the Big
Two" (http://www.thehindubusinessline.com/businessline/2001/07/20/stories/042062cr.htm) .
http://www.thehindubusinessline.com/businessline/2001/07/20/stories/042062cr.htm. Retrieved 2005-08-10.
External links
Government of India websites
■ Finance Ministry of India (http://finmin.nic.in/)

■ India in Business (http://www.indiainbusiness.nic.in/) - Official website for Investment and Trade
in India
■ Reserve Bank of India's database on the Indian economy
(http://www.rbi.org.in/scripts/Statistics.aspx)
Publications and statistics
■ World Bank – India Country Overview

(http://www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/INDIAEXTN/0,
■ Ernst & Young 2006 report on doing Business in India
(http://ibef.org/download/doingbusinessinindia2006.pdf)
■ CIA – The World Factbook – India (https://www.cia.gov/library/publications/the-world-
factbook/geos/in.html)
Retrieved from "http://en.wikipedia.org/wiki/Economy_of_India"

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Economy of India - Wikipedia, the free encyclopedia Page 1 of 29

"Dollar" and "$" refer throughout to Economy of The Republic of India

The Economy of India is the eleventh

Modern Indian currency notes

■ 4 External trade and investment $3,290 (PPP: 127th; 2010)[1]

■ 8.3 Education Labour force 478 million (2nd; 2009)

Pre-colonial period (up to 1773)

Colonial period (1773–1947)

There is no doubt that our grievances against the

India's colonisation by the British created an institutional

Pre-liberalisation period (1947–1991)

foreign investment policies were relatively liberal.[44] Five-Year

Jawaharlal Nehru, the first prime minister of India, along with

Post-liberalisation period (since 1991)

India ranks second worldwide in farm output. Agriculture and

Banking and finance

Energy and power

India's oil reserves meet 25% of the country's domestic oil

As of 2010, India had an installed power generation capacity of

External trade and investment

Global trade relations

Foreign direct investment in India

economic reforms aimed at deregulating the economy 4 UK 6,158 5.00

Income and consumption

India's gross national income per capita in 2008 was

– World Bank: India Country Overview 2008.[145]

Unemployment in India is characterised by chronic (disguised) unemployment. Government schemes

Economic trends and issues

Slow agricultural growth is a concern for

– World Bank: "India Country Overview 2008"[145]

Corruption has been one of the pervasive problems affecting

The Right to Information Act (2005) which requires government

India has made huge progress in terms of

In the past, development of infrastructure was completely in the

Some 600 million Indians have no electricity at all.[181] While

billion kWh, with an installed capacity of 128400 MW.[185] In

– World Bank: India Country Overview 2008[145]

A critical problem facing India's economy is the sharp and

The five-year plans, especially in the pre-liberalisation era,

9. ^ "India's surprising economic miracle" (http://www.economist.com/node/17147648?

69. ^ Datt & Sundharam 2009, pp. 668–669

United Nations Public Administration Network.

111. ^ Economic Survey 2010, pp. 142–144.

134. ^ Steve Schifferes (2008-08-27). "World poverty 'more

Papers and reports

■ "Economic reforms in India: Task force report" (http://harrisschool.uchicago.edu/News/press-releases/IPP%

■ Alamgir, Jalal (2008). India's Open-Economy Policy. Routledge. ISBN 978-0-415-77684-4.

■ "Milton Friedman on the Nehru/Mahalanobis

■ "India says 21 of 29 states to launch new tax" (http://www.dailytimes.com.pk/default.asp?page=story_25-3-

■ Finance Ministry of India (http://finmin.nic.in/)

Publications and statistics

■ World Bank – India Country Overview

Retrieved from "http://en.wikipedia.org/wiki/Economy_of_India"

■ This page was last modified on 12 March 2011 at 14:07.

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