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Economy of India



 
 
The economy of India
India

India, officially the Republic of India , is a country in South Asia. It is the List of countries and outlying territories by total area country by geographical area, the List of countries by population country, and the most populous liberal democracy in the world....
 is the twelfth largest in the world by market exchange rates and the fourth largest in the world by GDP, measured on a purchasing power parity
List of countries by GDP (PPP)

There are three lists of countries of the world sorted by their gross domestic product . The GDP dollar estimates given on this page are derived from purchasing power parity calculations....
 (PPP) basis. The country was under socialist-based policies for an entire generation from the 1950s until the 1980s. The economy suffered from extensive regulation, protectionism
Protectionism

Protectionism is the economic policy of restraining trade between nations, through methods such as tariffs on imported goods, restrictive import quota, and a variety of other restrictive government regulations designed to discourage imports, and prevent foreign take-over of local markets and companies....
, and public ownership, leading to pervasive corruption
Corruption in India

Political corruption is widespread in India. India is ranked 85 out of a 179 countries in Transparency International's Corruption Perceptions Index, although its score has improved consistently from 2.7 in 2002 to 3.4 in 2008....
 and slow growth
Hindu rate of growth

File:Per capita GDP of South Asian economies & SKorea .pngHindu rate of growth is a controversial and derogatory expression used to refer to the low annual growth rate of the economy of India before 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%....
. Since 1991, continuing economic liberalization
Economic liberalization in India

The economic liberalization in India fix to ongoing reforms in Economy of India.After Independence in 1947, India adhered to socialist policies. The extensive regulation was sarcastically dubbed as the "License Raj", while the slow growth rate was dubbed as the "Hindu rate of growth"....
 has moved the economy towards a market-based system
Market economy

A market economy is a social system based on the division of labor in which the prices of goods and services are determined in a free price system set by supply and demand....
.

As of 2007, agriculture
Agriculture in India

Agriculture in India has a History of agriculture in India dating back to ten thousand years.Today, India List of countries by GDP sector composition worldwide in farm output....
 is the predominant occupation in India, accounting for 60% of employment.






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God forbid that India should ever take to industrialism after the manner of the west... keeping the world in chains. If our nation took to similar economic exploitation, it would strip the world bare like locusts.

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We have believed and we do believe now that freedom is indivisible, that peace is indivisible, that economic prosperity is indivisible.






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The economy of India
India

India, officially the Republic of India , is a country in South Asia. It is the List of countries and outlying territories by total area country by geographical area, the List of countries by population country, and the most populous liberal democracy in the world....
 is the twelfth largest in the world by market exchange rates and the fourth largest in the world by GDP, measured on a purchasing power parity
List of countries by GDP (PPP)

There are three lists of countries of the world sorted by their gross domestic product . The GDP dollar estimates given on this page are derived from purchasing power parity calculations....
 (PPP) basis. The country was under socialist-based policies for an entire generation from the 1950s until the 1980s. The economy suffered from extensive regulation, protectionism
Protectionism

Protectionism is the economic policy of restraining trade between nations, through methods such as tariffs on imported goods, restrictive import quota, and a variety of other restrictive government regulations designed to discourage imports, and prevent foreign take-over of local markets and companies....
, and public ownership, leading to pervasive corruption
Corruption in India

Political corruption is widespread in India. India is ranked 85 out of a 179 countries in Transparency International's Corruption Perceptions Index, although its score has improved consistently from 2.7 in 2002 to 3.4 in 2008....
 and slow growth
Hindu rate of growth

File:Per capita GDP of South Asian economies & SKorea .pngHindu rate of growth is a controversial and derogatory expression used to refer to the low annual growth rate of the economy of India before 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%....
. Since 1991, continuing economic liberalization
Economic liberalization in India

The economic liberalization in India fix to ongoing reforms in Economy of India.After Independence in 1947, India adhered to socialist policies. The extensive regulation was sarcastically dubbed as the "License Raj", while the slow growth rate was dubbed as the "Hindu rate of growth"....
 has moved the economy towards a market-based system
Market economy

A market economy is a social system based on the division of labor in which the prices of goods and services are determined in a free price system set by supply and demand....
.

As of 2007, agriculture
Agriculture in India

Agriculture in India has a History of agriculture in India dating back to ten thousand years.Today, India List of countries by GDP sector composition worldwide in farm output....
 is the predominant occupation in India, accounting for 60% of employment. The service sector makes up a further 28%, industry around 12%. One estimate is that only one in five job-seekers has had any sort of vocational training. The labor force totals half a billion workers
Labour in India

India's labour force exhibits extremes ranging from large numbers of illiterate workers unaccustomed to machinery or routine, to a sizable pool of highly educated scientists, technicians, and engineers, capable of working anywhere in the world....
. For output, the agricultural sector accounts for 18% of GDP; the service and industrial sectors make up 54% and 28% respectively. Major agricultural products include rice
Rice

Rice is a staple food for a large part of the world's human population, especially in tropical Latin America, and East Asia, South Asia and Southeast Asia, making it the second-most consumed cereal grain, after maize....
, wheat
Wheat

Wheat , is a worldwide cultivated Poaceae from the Levant region of the Middle East. Globally, after maize, wheat is the second most-produced food among the cereal just above rice....
, oilseed, cotton
Cotton

Cotton is a soft, staple fiber that grows in a form known as a boll around the seeds of the cotton plant a shrub native to tropical and subtropical regions around the world, including the Americas, India and Africa....
, jute
Jute

Jute is a long, soft, shiny vegetable fiber that can be spun into coarse, strong threads. It is produced from plants in the genus Corchorus, family Tiliaceae....
, tea
Tea

Tea refers to the agricultural products of the leaves, leaf buds, and internodes of the Camellia sinensis plant, prepared and cured by various methods....
, sugarcane
Sugarcane

Sugarcane is a genus of 6 to 37 species of tall perennial plant Poaceae , native to warm temperate to tropical regions of the Old World. They have stout, jointed, fibrous stalks that are rich in sugar and measure 2 to 6 meters tall....
, potato
Potato

The potato is a starchy, tuberous crop from the perennial plant Solanum tuberosum of the Solanaceae family. The word potato may refer to the plant itself as well....
es, cattle
Cattle

Cattle, colloquially referred to as cows, are domestication ungulates, a member of the subfamily Bovinae of the family Bovidae. They are raised as livestock for meat , dairy products , leather and as draft animals ....
, water buffalo
Water Buffalo

The Water Buffalo or domestic Asian water buffalo is a large bovine animal, frequently used as livestock in Asia, and also widely in South America, southern Europe, north Africa and elsewhere....
, sheep
Sheep

#REDIRECT Domestic sheep...
, goats, poultry
Poultry

Poultry is the category of domesticated birds which some people keep for the purpose of collecting their egg , or kill for their meat and/or feathers....
 and fish
Fish

A fish is any marine biology vertebrate animal that is typically ectothermic , covered with scale , and equipped with two sets of paired fins and several unpaired fins....
. Major industries include textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery and software design. India's GDP is $1.089 trillion, which makes it the twelfth-largest
List of countries by GDP (nominal)

This article includes a list of List of countries sorted by their gross domestic product , the market value of all final goods and services from a nation in a given year....
 economy in the world or fourth largest
List of countries by GDP (PPP)

There are three lists of countries of the world sorted by their gross domestic product . The GDP dollar estimates given on this page are derived from purchasing power parity calculations....
 by purchasing power adjusted exchange rates. India's nominal per capita income
Per capita income

Per capita income means how much each individual receives, in monetary terms, of the yearly income generated in the country. This is what each citizen is to receive if the yearly national income is divided equally among everyone....
 of $977 is ranked 128th
List of countries by GDP (nominal) per capita

File:GDP nominal per capita world map IMF 2008.pngFile:GDP per capita.pngThis article includes three lists of countries of the world sorted by their gross domestic product per capita at nominal values, the value of all final goods and services produced within a nation in a given year, converted at market exchange rates to current U.S....
 in the world. In the late 2000s, India's growth
Economic growth

Economic growth is the increase in the amount of the goods and services produced by an economics over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP....
 has averaged 7.5% a year, increases which will double the average income within a decade.Unemployment rate is 7.2% (2007 estimate). Previously a closed economy, India's trade has grown fast. India currently accounts for 1.5% of World trade as of 2007 according to the WTO. According to the World Trade Statistics of the WTO in 2006, India's total merchandise trade (counting exports and imports) was valued at $294 billion in 2006 and India's services trade inclusive of export and import was $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 percent from a level of $253 billion in 2004. India's trade has reached a still relatively moderate share 24% of GDP in 2006, up from 6% in 1985.

India's recent economic growth has widened economic inequality
Economic inequality

Economic inequality refers to disparities in the distribution of economic assets and income. The term typically refers to inequality among individuals and groups within a society, but can also refer to international inequality....
 across the country. Despite sustained high economic growth rate, approximately 80% of its population lives on less than $2 a day (PPP), more than double the same poverty rate in China. Even though the arrival of Green Revolution
Green Revolution

Green Revolution usually refers to the transformation of agriculture that began in 1945. One significant factor came at the request of the Mexican government to establish an agricultural research station to develop more varieties of wheat that could be used to feed the rapidly growing population of the country....
 brought end to famines in India
Famine in India

File:Starved child.jpgThere were 14 famines in History of India between 11th and 17th century . For example, during the 1022-1033 Great famines in India entire provinces were depopulated....
, 40% of children under the age of three are underweight
Underweight

The term underweight refers to a human who is considered to be under a healthy weight. The definition is usually made with reference to the body mass index ....
 and a third of all men and women suffer from chronic energy deficiency
Malnutrition

Malnutrition is a general term for a medical condition caused by an improper or inadequate diet and nutrition.According to the World Health Organization, hunger and malnutrition are the single gravest threats to the world's public health and malnutrition is by far the biggest contributor to child mortality, present in half of all cases....
.

History

India's economic history can be broadly divided into three eras, beginning with the pre-colonial period lasting up to the 17th century. The advent of British colonisation started the colonial period in the 17th century, which ended with independence
Indian independence movement

The term Indian independence movement incorporates various national and regional campaigns, agitations and efforts of both Nonviolent and Revolutionary movement for Indian independence philosophy....
 in 1947. The third period stretches from independence in 1947 until now.

Pre-colonial

The citizens of the Indus Valley civilisation, a permanent and predominantly urban 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
Urban planning

Urban, city, and town planning is the integration of the disciplines of land use planning and transport planning, to explore a very wide range of aspects of the built and social environments of urbanized municipalities and communities....
, which included the world's first urban sanitation
Sanitation

Sanitation is the hygienic means of preventing human contact from the hazards of wastes to promote health. Hazards can be either physical, microbiological, biological or chemical agents of disease....
 systems and the existence of a form of municipal government.

Kumaragupta
The 1872 census revealed that 99.3% of the population of the region constituting present-day India resided in villages, whose economies were largely isolated and self-sustaining, with agriculture the predominant occupation. This satisfied the food requirements of the village and provided raw materials for hand-based industries, such as textile
Textile

A textile is a flexible material consisting of a network of natural or artificial fibres often referred to as thread or yarn. Yarn is produced by Spinning raw wool fibres, linen, cotton, or other material on a spinning wheel to produce long strands known as yarn....
s, food processing
Food processing

Food processing is the set of methods and techniques used to transform raw ingredients into food or to transform food into other forms for ingestion by humans or animals either in the home or by the food industry....
 and crafts. Although many kingdoms and rulers issued coins, barter
Barter

Barter is a type of trade in which product or Service are directly exchanged for other goods and/or services, without the use of Money. It can be bilateral or multilateral, and usually exists parallel to monetary systems in most developed countries, though to a very limited extent....
 was prevalent. Villages paid a portion of their agricultural produce as revenue to the rulers, while its craftsmen received a part of the crops at harvest time for their services.

Religion, especially Hinduism
Hinduism

'Hinduism' is the predominant religion of the Indian subcontinent. Hinduism is often referred to as , a Sanskrit phrase meaning "the eternal dharma", by its practitioners....
, and the caste
Caste

Castes are hereditary systems of wikt:occupation, endogamy, culture, social class, and political power, the assignment of individuals to places in the social hierarchy is determined by social group and culture....
 and the joint family systems, played an influential role in shaping economic activities. The caste system functioned much like medieval European guilds, ensuring the division of labour
Division of labour

Division of labour or specialization is the specialization of cooperative Labour in specific, circumscribed tasks and roles, intended to increase the productivity of labour....
, providing for the training of apprentices and, in some cases, allowing manufacturers to achieve narrow specialization. For instance, in certain regions, producing each variety of cloth was the specialty of a particular sub-caste.

Precolonial National Income of India(1857 1900)
Textiles such as muslin
Muslin

Muslin is a type of finely-woven cotton textile, introduced to Europe from the Middle East in the 17th century. It became very popular at the end of the 18th century in France....
, Calicos, shawl
Shawl

A shawl is a simple item of clothing, loosely worn over the shoulders, upper body and arms, sometimes also over the head. It is usually a rectangular or Square piece of cloth, that is often folded to make a triangle but can also be triangular in shape....
s, and agricultural products such as pepper
Black pepper

Black pepper is a flowering plant vine in the family Piperaceae, cultivated for its fruit, which is usually dried and used as a spice and seasoning....
, cinnamon
Cinnamon

Cinnamon is a small evergreen tree 10?15 metres tall, belonging to the family Lauraceae, and is native to Sri Lanka.The leaf are ovate-oblong in shape, 7?18 cm long....
, opium
Opium

Opium is a narcotic formed from the latex released by lacerating the immature seed pods of Opium poppy . It contains up to 12% morphine, an opiate alkaloid, which is most frequently processed chemically to produce heroin for the illegal drug trade....
 and indigo
Indigo

Indigo is the color on the electromagnetic spectrum between about 420 and 450 nanometre in wavelength, placing it between blue and violet . Although traditionally considered one of seven divisions of the optical spectrum, modern color scientists do not usually recognize indigo as a separate division and generally classify wavelengths shorter...
 were exported to Europe, the Middle East and South East Asia in return for gold and silver.

Assessment of India's pre-colonial economy is mostly qualitative, owing to the lack of quantitative information. One estimate puts the revenue of Akbar's Mughal Empire
Mughal Empire

The Mughal Empire was a Muslim imperial power of the Indian subcontinent which began in 1526, ruled most of the Indian Subcontinent by the late 17th and early 18th centuries, and ended in the mid-19th century....
 in 1600 at Ł17.5 million, in contrast with the total revenue of Great Britain in 1800, which totalled Ł16 million. India, by the time of the arrival of the British, was a largely traditional agrarian economy with a dominant subsistence sector dependent on primitive technology. It existed alongside a competitively developed network of commerce, manufacturing and credit. After the fall of the Mughals
Mughal Empire

The Mughal Empire was a Muslim imperial power of the Indian subcontinent which began in 1526, ruled most of the Indian Subcontinent by the late 17th and early 18th centuries, and ended in the mid-19th century....
, India was administered by Maratha Empire
Maratha Empire

The Maratha Empire or the Maratha Confederacy was a Hindu state located in present-day India. It existed from 1674 to 1818. At its peak, the empire's territories covered much of South Asia....
. The Maratha Empire's budget in 1740s, at its peak, was Rs. 100 million. After the loss at Panipat, the Maratha Empire disintegrated into confederate states of Gwalior, Baroda, Indore, Jhansi, Nagpur, Pune and Kolhapur. Gwalior state had a budget of Rs. 30M. However, at this time, British East India company entered the Indian political theatre. Until 1857, when India was firmly under the British crown, the country remained in a state of political instability due to internecine wars and conflicts.

Colonial

Hooglykolkata1945
Company rule in India
Company rule in India

Company rule in India refers to the rule or dominion of the British East India Company on the Indian subcontinent. This is variously taken to have commenced in 1757, after the Battle of Plassey, when the Nawab of Bengal surrendered his dominions to the Company, in 1765, when the Company was granted the diwani, or the right to collect rev...
 brought a major change in the taxation environment from revenue taxes to property taxes resulting in mass impoverishment and destitution of the great majority of farmers, resulting in numerous famines. The economic policies of the British Raj
British Raj

British Raj primarily refers to the British rule in the Indian subcontinent between 1858 and 1947; it can also refer to the period of dominion, and even the region under the rule....
 effectively destroyed India's large handicrafts industry and caused a massive drain of India's resources. An estimate by Cambridge University historian Angus Maddison reveals that India's share of the world income fell from 22.6% in 1700, comparable to Europe's share of 23.3%, to a low of 3.8% in 1952. It also created an institutional environment that, on paper, guaranteed property rights among the colonizers, encouraged free trade
Free trade

Free trade is a type of trade policy that allows traders to act and transact without coercive interference from government. Thus, the policy permits trading partners mutual gains from trade, with goods and services produced according to the law of comparative advantage....
, and created a single currency with fixed exchange rates, standardized weights and measures, capital market
Capital market

The capital market is the market for security , where Corporation and governments can raise longterm funds. It is a market in which money is lent for periods longer than a year....
s, a well developed system of railways
Rail transport in India

Rail transport is a commonly used mode of long-distance transport in India in India. Almost all rail operations in India are handled by a state-owned company, Indian Railways, under the federal Ministry of Railways....
 and telegraphs, a civil service that aimed to be free from political interference, and a common-law, adversarial legal system. India's colonisation by the British coincided with major changes in the world economy—industrialisation, and significant 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, with industrial development stalled, agriculture unable to feed a rapidly growing population, one of the world's lowest life expectancies
Life expectancy

Life expectancy is the average number of years of life remaining at a given age. It is the average expected lifespan of an individual. Life expectancy is heavily dependent on the criteria used to select the group....
, and low rates of literacy.

The impact of the British rule on India's economy is a controversial topic. While leaders of the Indian independence movement
Indian independence movement

The term Indian independence movement incorporates various national and regional campaigns, agitations and efforts of both Nonviolent and Revolutionary movement for Indian independence philosophy....
, and left-nationalist economic historians
Economic history

Economic history is the study of how economy evolved in the past. Analysis in economic history is undertaken using a combination of historical methods, statistical methods and by applying economic theory to historical situations....
 have blamed colonial rule for the dismal state of India's economy in its aftermath, right-wing historians have countered that India's economic performance was due to various sectors being in a state of growth and decline, resulting from changes brought about by colonialism and a world that was moving towards industrialization and economic integration
Economic integration

Economic integration is a term used to describe how different aspects between economies are integrated. The basics of this theory were written by the Hungary Economist B?la Balassa in the 1960s....
.

Independence to 1991

Indian economic policy
Economic policy

Economic policy refers to the actions that governments take in the economics. It covers the systems for setting interest rates and government deficit as well as the labour market, nationalization, and many other areas of government....
 after independence
Indian independence movement

The term Indian independence movement incorporates various national and regional campaigns, agitations and efforts of both Nonviolent and Revolutionary movement for Indian independence philosophy....
 was influenced by the colonial experience (which was seen by Indian leaders as exploitative in nature) and by those leaders' exposure to Fabian socialism. Policy tended towards protectionism, with a strong emphasis on import substitution
Import substitution

Import Substitution Industrialization is a trade and economics policy based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products....
, industrialization
Industrialization

Industrialization is the process of social and economic change whereby a human group is transformed from a pre-industrial society into an industry one....
, state intervention in labor and financial markets, a large public sector, business regulation, and central planning. Five-Year Plans of India
Five-Year Plans of India

The economy of India is based in part on Planned economy through its five-year plans, developed, executed and monitored by the Planning Commission ....
 resembled central planning in the Soviet Union
Soviet Union

The Union of Soviet Socialist Republics was a Constitution of the Soviet Union socialist state that existed in Eurasia from 1922 to 1991.The name is a translation of the , romanization of Russian Soyuz Sovetskikh Sotsialisticheskikh Respublik, abbreviated ????, SSSR....
. Steel, mining, machine tools, water, telecommunications, insurance, and electrical plants, among other industries, were effectively nationalized in the mid-1950s. Elaborate licences, regulations and the accompanying red tape
Red tape

"Red tape" is a derisive term for excessive regulation or rigid conformity to formal rules that is considered redundant or Bureaucracy and hinders or prevents action or decision-making....
, commonly referred to as Licence Raj
Licence Raj

Licence Raj refers to the elaborate licences, regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990....
, were required to set up business in India
India

India, officially the Republic of India , is a country in South Asia. It is the List of countries and outlying territories by total area country by geographical area, the List of countries by population country, and the most populous liberal democracy in the world....
 between 1947 and 1990.

Jawaharlal Nehru
Jawaharlal Nehru

Jawaharlal Nehru The son of the wealthy Indian barrister and politician Motilal Nehru, Nehru became a leader of the left-wing of the Indian National Congress at a remarkably young age....
, the first prime minister
Prime Minister of India

The Prime Minister of India is the head of government of the India, and head of the Council of Ministers of the Republic of India, appointed by the President of India to assist the latter in the administration of the affairs of the Executive in India....
, along with the statistician Prasanta Chandra Mahalanobis
Prasanta Chandra Mahalanobis

Prasanta Chandra Mahalanobis, Fellow of the Royal Society was an Indian scientist and applied statistics. He is best remembered for the Mahalanobis distance, a statistical measure....
, carried on by Indira Gandhi
Indira Gandhi

Indira Priyadarshini Gandhi was the Prime Minister of the Republic of India for three consecutive terms from 1966 to 1977and for a fourth term from 1980 until her Assassination of Indira Gandhi in 1984, a total of fifteen years....
 formulated and oversaw economic policy. They expected favorable outcomes from this strategy, because it involved both public and private sectors and was based on direct and indirect state intervention, rather than the more extreme Soviet-style
Economy of the Soviet Union

The economy of the Soviet Union was based on a system of state ownership, administrative planning, socialist competition and free labour. The Soviet Union created the modern world's first centrally planned economy....
 central command system. The policy of concentrating simultaneously on capital- and technology-intensive heavy industry
Heavy industry

Heavy industry does not have a single fixed meaning as compared to light industry. It can mean production of products which are either heavy in weight or in the processes leading to their production....
 and subsidizing manual, low-skill cottage industries was criticized by economist Milton Friedman
Milton Friedman

Milton Friedman was an United States economist, statistician and public intellectual, and a recipient of the Nobel Memorial Prize in Economic Sciences....
, who thought it would waste capital and labour, and retard the development of small manufacturers.

India's low average growth rate from 1947–80 was derisively referred to as the Hindu rate of growth
Hindu rate of growth

File:Per capita GDP of South Asian economies & SKorea .pngHindu rate of growth is a controversial and derogatory expression used to refer to the low annual growth rate of the economy of India before 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%....
, because of the unfavourable comparison with growth rates in other Asian countries, especially the "East Asian Tigers".

The Rockefeller Foundation
Rockefeller Foundation

The Rockefeller Foundation is a prominent philanthropic organization and private foundation based at 420 Fifth Avenue, New York City. The preeminent institution established by the six-generation Rockefeller family, it was founded by John D....
's research in high-yielding varieties of seeds
Hybrid seed

In agriculture and gardening, hybrid seed is seed produced by artificially pollination plants. Hybrids are bred to improve the characteristics of the resulting plants, such as better crop yield, greater uniformity, improved color, disease resistance, and so forth....
, their introduction after 1965 and the increased use of fertilizers and irrigation
Irrigation

Irrigation is an artificial application of water to the soil usually for assisting in growing crops. In crop production it is mainly used in dry areas and in periods of rainfall shortfalls, but also to protect plants against frost....
 are known collectively as the Green Revolution
Green Revolution

Green Revolution usually refers to the transformation of agriculture that began in 1945. One significant factor came at the request of the Mexican government to establish an agricultural research station to develop more varieties of wheat that could be used to feed the rapidly growing population of the country....
, which provided the increase in production needed to make India self-sufficient in food grains, thus improving agriculture in India
Agriculture in India

Agriculture in India has a History of agriculture in India dating back to ten thousand years.Today, India List of countries by GDP sector composition worldwide in farm output....
. Famine in India
Famine in India

File:Starved child.jpgThere were 14 famines in History of India between 11th and 17th century . For example, during the 1022-1033 Great famines in India entire provinces were depopulated....
, once accepted as inevitable, has not returned since the introduction of Green Revolution crops.

After 1991

In the late 80s, the government led by Rajiv Gandhi
Rajiv Gandhi

Rajiv Gandhi ; 20 August 1944 ? 21 May 1991), the elder son of Indira Gandhi and Feroze Gandhi, was the 9th Prime Minister of India of India from his mother's death on 31 October 1984 until his resignation on 2 December 1989 following a general election defeat....
 eased restrictions on capacity expansion for incumbents, removed price controls and reduced corporate taxes. While this increased the rate of growth, it also led to high fiscal deficits and a worsening current account. The collapse of the Soviet Union
Soviet Union

The Union of Soviet Socialist Republics was a Constitution of the Soviet Union socialist state that existed in Eurasia from 1922 to 1991.The name is a translation of the , romanization of Russian Soyuz Sovetskikh Sotsialisticheskikh Respublik, abbreviated ????, SSSR....
, which was India's major trading partner, and the first Gulf War
Gulf War

"Persian Gulf War" and "First Gulf War" redirect here. For other uses, see Persian Gulf War .The Persian Gulf War was a United Nations-authorized military conflict between Iraq and a Coalition of Gulf War from 34 nations commissioned with expelling Iraqi forces from Kuwait after Iraq's Invasion of Kuwait of Kuwait in August 1990....
, which caused a spike in oil prices, caused a major balance-of-payments crisis for India, which found itself facing the prospect of defaulting on its loans. India asked for a $1.8 billion bailout loan from IMF, which in return demanded reforms.

In response, Prime Minister Narasimha Rao along with his finance minister Manmohan Singh
Manmohan Singh

Manmohan Singh is the 17th and current Prime Minister of India of the Republic of India. He also serves as the Ministry of Finance , succeeding P....
 initiated the economic liberalisation of 1991. The reforms did away with the Licence Raj
Licence Raj

Licence Raj refers to the elaborate licences, regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990....
 (investment, industrial and import licensing) and ended many public monopolies, allowing automatic approval of foreign direct investment
Foreign direct investment

Foreign direct investment in its classic form is defined as a company from one country making a physical investment into building a factory in another country....
 in many sectors. Since then, the overall direction of liberalisation has remained the same, irrespective of the ruling party, although no party has tried to take on powerful lobbies such as the trade unions and farmers, or contentious issues such as reforming labour laws and reducing agricultural subsidies. Since 1990 India has emerged as one of the fastest-growing economies in the developing world; during this period, the economy has grown constantly, but with a few major setbacks. This has been accompanied by increases in life expectancy, literacy rates and food security.

While the credit rating of India was hit by its nuclear tests in 1998, it has been raised to investment level in 2007 by S&P and Moody's. In 2003, Goldman Sachs
Goldman Sachs

The Goldman Sachs Group, Inc., or simply Goldman Sachs , is a bank holding company that engages in investment banking, Security services, and investment management....
 predicted that India's GDP in current prices will overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by 2035. By 2035, it was projected to be the third largest economy of the world, behind US and China.

Future predictions

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
United States

The United States of America is a Federal government constitutional republic comprising U.S. state and a federal district. The country is situated mostly in central North America, where its Contiguous United States and Washington, D.C., the Capital districts and territories, lie between the Pacific Ocean and Atlantic Oceans, Borders of the U...
 (in US$) by 2043. Despite high growth rate, the report stated that India would continue to remain a low-income country for several decades but can be a "motor for the world economy" if it fulfills its growth potential. Goldman Sachs has outlined 10 things that it needs to do in order to achieve its potential and grow 40 times by 2050. These are 1.improve governance 2.raise educational achievement 3.increase quality and quantity of universities 4.control inflation 5.introduce a credible fiscal policy 6.liberalize financial markets 7.increase trade with neighbours 8.increase agricultural productivity 9.improve infrastructure and 10.improve environmental quality.

Sectors


Agriculture

India ranks second
List of countries by GDP sector composition

File:2005gdpIndustrial.pngFile:2005gdpServices.pngThis is a list of countries by GDP sector composition based on nominal GDP estimates and sector composition ratios provided by the at market or government official exchange rates with figures in millions of United States dollars....
 worldwide in farm output. Agriculture
Agriculture

Agriculture refers to the production of food and goods through farming and forestry. Agriculture was the key development that led to the rise of civilization, with the animal husbandry of domestication animals and plants creating food surpluses that enabled the development of more Population density and Social stratification societies....
 and allied sectors like forestry
Forestry

Forestry is the art and science of managing forests, tree plantations, and related natural resources. Silviculture, a related science, involves the growing and tending of trees and forests....
, logging
Logging

Logging is the process in which certain trees are cut down for forest management and timber....
 and fishing
Fishing

Fishing is the activity of catching fish. Fishing techniques include Fish net, Fish trap, Spearfishing, angling and Gathering seafood by hand. The term fishing may be applied to catching other aquatic animals such as different types of shellfish, squid, octopus, turtles, Edible frog and some edible marine invertebrates....
 accounted for 16.6% of the GDP in 2007, employed 60% of the total workforce 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. Yield
Yield

Yield in science, mathematics, and engineering:* Semiconductor device fabrication, the proportion of devices produced which function correctly...
s 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
Irrigation

Irrigation is an artificial application of water to the soil usually for assisting in growing crops. In crop production it is mainly used in dry areas and in periods of rainfall shortfalls, but also to protect plants against frost....
, technology, application of modern agricultural practices and provision of agricultural credit and subsidies since Green revolution in India
Green Revolution in India

The introduction of hybrid seed after 1965 and the increased use of fertilizers and irrigation are known collectively as the Green Revolution, which provided the increase in production needed to make India self-sufficient in food grains, thus improving agriculture in India....
. However, international comparisons reveal that the average yield in India is generally 30% to 50% of the highest average yield in the world.

India is the largest producer in the world of milk
Milk

Milk is an opaque white liquid produced by the mammary glands of female mammals . It provides the primary source of nutrition for newborn mammals before they are able to digestion other types of food....
, cashew nuts, coconut
Coconut

The Coconut Palm is a member of the Family Arecaceae . It is the only species in the genus Cocos, and is a large palm, growing to 30 m tall, with pinnate leaf 4-6 m long, pinnae 60-90 cm long; old leaves break away cleanly leaving the trunk smooth....
s, tea
Tea

Tea refers to the agricultural products of the leaves, leaf buds, and internodes of the Camellia sinensis plant, prepared and cured by various methods....
, ginger
Ginger

Ginger is a spice which is used for cooking and is also consumed whole as a delicacy or medicine. It is the rhizome of the Zingiber, Zingiber officinale....
, turmeric
Turmeric

Turmeric is a rhizomatous herbaceous perennial plant of the ginger family, Zingiberaceae. It is native to tropical South Asia and needs temperatures between 20? C and 30? C, and a considerable amount of annual rainfall to thrive....
 and black pepper
Black pepper

Black pepper is a flowering plant vine in the family Piperaceae, cultivated for its fruit, which is usually dried and used as a spice and seasoning....
. It also has the world's largest cattle
Cattle

Cattle, colloquially referred to as cows, are domestication ungulates, a member of the subfamily Bovinae of the family Bovidae. They are raised as livestock for meat , dairy products , leather and as draft animals ....
 population (193 million). It is the second largest producer of wheat
Wheat

Wheat , is a worldwide cultivated Poaceae from the Levant region of the Middle East. Globally, after maize, wheat is the second most-produced food among the cereal just above rice....
, rice
Rice

Rice is a staple food for a large part of the world's human population, especially in tropical Latin America, and East Asia, South Asia and Southeast Asia, making it the second-most consumed cereal grain, after maize....
, sugar
Sugar

Sugar is a class of edible crystalline substances, mainly sucrose, lactose, and fructose. Human taste buds interpret its flavor as sweet. Sugar as a basic food carbohydrate primarily comes from sugar cane and from sugar beet, but also appears in fruit, honey, sorghum, sugar maple , and in many other sources....
, groundnut
Groundnut

Groundnut can mean:* Seeds that ripen underground, of the following plants, all in the Faboideae subfamily of the legumes:** Arachis villosulicarpa...
 and inland fish
Fish

A fish is any marine biology vertebrate animal that is typically ectothermic , covered with scale , and equipped with two sets of paired fins and several unpaired fins....
. It is the third largest producer of tobacco
Tobacco

Tobacco is an agricultural product processed from the fresh leaves of plants in the genus Nicotiana. It can be consumed, used as an organic pesticide, and in the form of nicotine tartrate it is used in some medicines....
. India accounts for 10% of the world fruit production with first rank in the production of banana
Banana

File:Banana and cross section.jpgBanana is the common name for a fruit and also the herbaceous plants of the genus Musa which produce this commonly eaten fruit....
 and sapota.

Industry

, Rajasthan. Industrial growth in India has provided increase employment opportunities across India.]] Industry accounts for 27.6% of the GDP and employ 17% of the total workforce. However, about one-third of the industrial labour force is engaged in simple household manufacturing only. In absolute terms, India is 16th
List of countries by GDP sector composition

File:2005gdpIndustrial.pngFile:2005gdpServices.pngThis is a list of countries by GDP sector composition based on nominal GDP estimates and sector composition ratios provided by the at market or government official exchange rates with figures in millions of United States dollars....
 in the world in terms of nominal factory output. Despite this, India emits only around fifth of the carbon that the United States does.

Economic reforms brought foreign competition, led to privatisation of certain public sector industries, opened up sectors hitherto reserved for the public sector and led to an expansion in the production of fast-moving consumer goods. Post-liberalisation, the Indian private sector, which was usually run by oligopolies of old family firms and required political connections to prosper was faced with foreign competition, including the threat of cheaper Chinese imports. It has since handled the change by squeezing costs, revamping management, focusing on designing new products and relying on low labour costs and technology.

Textile
Textile

A textile is a flexible material consisting of a network of natural or artificial fibres often referred to as thread or yarn. Yarn is produced by Spinning raw wool fibres, linen, cotton, or other material on a spinning wheel to produce long strands known as yarn....
 manufacturing is the second largest source for employment after agriculture and accounts for 26% of manufacturing output. Tirupur
Tirupur

Tirupur is a textile located on the banks of Noyyal River. It is the seventh largest in the Indian state of Tamil Nadu and the administrative headquarters of Tirupur district....
 has gained universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear. Dharavi
Dharavi

Dharavi is a slum and administrative ward, over parts of Sion, Bandra, Kurla and Kalina suburbs of Mumbai, India. Sandwiched between Mahim in the west and Sion, India in the east, is Dharavi....
 slum in Mumbai has gained fame for leather products. Tata Motors
Tata Motors

Tata Motors Limited, formerly known as TELCO , is a multinational corporation headquartered in Mumbai, India. It is India's largest passenger automobile and commercial vehicle manufacturing company....
' Nano
Tata Nano

The Tata Nano is a city car — rear-engined, four-passenger car aimed primarily at the Indian market — first presented by India's Tata Motors at the 9th annual Auto Expo on January 10, 2008, at Pragati Maidan in New Delhi, India....
 attempts to be the world's cheapest car.

Services

India is fifteenth
List of countries by GDP sector composition

File:2005gdpIndustrial.pngFile:2005gdpServices.pngThis is a list of countries by GDP sector composition based on nominal GDP estimates and sector composition ratios provided by the at market or government official exchange rates with figures in millions of United States dollars....
 in services output. It provides employment to 23% of work force, and it is growing fast, growth rate 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.

Business services (information technology
Information technology

Information technology , as defined by the Information Technology Association of America , is "the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware." IT deals with the use of electronic computers and computer software to data conv...
, information technology enabled services, business process outsourcing
Business process outsourcing

Business process outsourcing is a form of outsourcing that involves the contracting of the operations and responsibilities of a specific business functions to a third-party service provider....
) are among the fastest growing sectors contributing to one third of the total output of services in 2000. The growth in the IT sector is attributed to increased specialization, and an availability of a large pool of low cost, but highly skilled, educated and fluent English-speaking workers, on the supply side
Supply and demand

...
, matched on the demand side by an increased demand from foreign consumers interested in India's service exports, or those looking to outsource
Outsourcing

Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company. The decision to outsource is often made in the interest of lowering firm or making better use of time and energy costs, redirecting or conserving energy directed at the core competence of a particular business, or to make more efficient...
 their operations. India's IT industry, despite contributing significantly to its balance of payments
Balance of payments

In economics, the balance of payments, measures the payments that flow between any individual country and all other countries. It is used to summarize all international economics transactions for that country during a specific time period, usually a year....
, accounted for only about 1% of the total GDP or 1/50th of the total services in 2001 However the contribution of IT to GDP increased to 4.8 % in 2005-06 and is projected to increase to 7% of GDP in 2008

Most Indian shopping takes place in open markets and millions of independent grocery shops called kirana. Organized retail such supermarkets accounts for just 4% of the market as of 2008. 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 to states, from states, and even within states.

Tourism in India
Tourism in India

India attracted about 4 million foreign tourists in 2006 who spent US$8.9 billion. The tourism industry in India generated about US$100 billion in 2008 and that is expected to increase to US$275.5 billion by 2018 at a 9.4% annual growth rate....
 is relatively undeveloped, but growing at double digits. Some hospitals woo medical tourism
Medical tourism

Medical tourism is a term initially coined by Travel agency and the mass media to describe the rapidly-growing practice of traveling across international borders to obtain health care....
.

Finance

More than half of personal savings are invested in physical assets such as land, houses, cattle
Cattle

Cattle, colloquially referred to as cows, are domestication ungulates, a member of the subfamily Bovinae of the family Bovidae. They are raised as livestock for meat , dairy products , leather and as draft animals ....
, and gold
Gold

Gold is a chemical element with the symbol Au and atomic number 79. It is a highly sought-after precious metal, having been used as money, as a store of value, in jewelry, in sculpture, and for ornamentation since the beginning of recorded history....
.

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. 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.

Bombay Stock Exchange
Bombay Stock Exchange

The Bombay Stock Exchange Limited has the greatest number of listed companies in the world, with 4700 listed as of August 2007. It is located at Dalal Street, Mumbai, India....
 is the largest stock exchange in South Asia
South Asia

South Asia, also known as Southern Asia, is the southern region of the Asian continent, which comprises the sub-Himalayan countries and, for some authorities , also includes the adjoining countries on the west and the east....
.

Natural resources

India's total cultivable area is 1,269,219 km˛ (56.78% of total land area), which is decreasing due to constant pressure from an ever growing population and increased urbanisation.

India has a total water surface area of 314,400 km˛ and receives an average annual rainfall of 1,100 mm. Irrigation
Irrigation

Irrigation is an artificial application of water to the soil usually for assisting in growing crops. In crop production it is mainly used in dry areas and in periods of rainfall shortfalls, but also to protect plants against frost....
 accounts for 92% of the water utilisation, and comprised 380 km˛ in 1974, and is expected to rise to 1,050 km˛ by 2025, with the balance accounted for by industrial and domestic consumers. India's inland water resources comprising rivers, canals, ponds and lakes and marine resources comprising the east and west coasts of the Indian ocean
Indian Ocean

The Indian Ocean is the third largest of the world's oceanic divisions, covering about 20% of the water on the Earth's surface. It is bounded on the north by Asia ; on the west by Africa; on the east by Indochina, the Sunda Islands, and Australia; and on the south by the Southern Ocean ....
 and other gulfs
Headlands and bays

Headlands and bays are two related features of the coastal environment....
 and bay
Bay

A bay is an area of water bordered by land on three sides. Bays generally have calm waters than the surrounding sea, due to the surrounding land blocking some ocean surface wave and often reducing winds....
s provide employment to nearly 6 million people in the fisheries sector. In 2008, India had the world's third largest fishing industry.

India's major mineral
Mineral

A mineral is a naturally occurring solid formed through Geology processes that has a characteristic chemical composition, a highly ordered atomic structure, and specific physical properties....
 resources include Coal
Coal

Coal is a readily combustion black or brownish-black sedimentary rock. The harder forms, such as anthracite, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure....
 (3rd-largest reserves in the world), Iron
Iron

Iron is a chemical element with the symbol Fe and atomic number 26. Iron is a Group 8 element and period 4 element. Iron is lustrous and silvery in color....
 ore, Manganese
Manganese

Manganese is a chemical element, designated by the symbol Mn. It has the atomic number 25. It is found as a Oxidation state in nature , and in many minerals....
, Mica
Mica

The mica group of sheet silicate minerals includes several closely related materials having highly perfect basal cleavage. All are monoclinic with a tendency towards pseudo-hexagonal crystals and are similar in chemical composition....
, Bauxite
Bauxite

Bauxite is the most important aluminium ore. It consists largely of the minerals gibbsite Al3, boehmite ?-AlO, and diaspore a-AlO, together with the iron oxides goethite and hematite, the clay mineral kaolinite and small amounts of anatase TiO2....
, Titanium
Titanium

Titanium is a chemical element with the symbol Ti and atomic number 22. Sometimes called the ?space age metal?, it has a low density and is a strong, lustrous, corrosion-resistant transition metal with a silver colour....
 ore, Chromite
Chromite

Chromite is iron magnesium chromium oxide: Cr2O4. It is an oxide mineral belonging to the spinel group. Magnesium can substitute for iron in variable amounts; also, aluminium and ferric iron commonly substitute for chromium....
, Natural gas
Natural gas

Natural gas is a gas consisting primarily of methane. It is found associated with fossil fuels, in coal beds, as methane clathrates, and is created by methanogenic organisms in marshes, bogs, and landfills....
, Diamond
Diamond

In mineralogy, diamond is the Allotropes of carbon where the carbon atoms are arranged in an isometric-hexoctahedral crystal lattice. After graphite, diamond is the second most stable form of carbon....
s, Petroleum
Petroleum

Petroleum or crude oil is a naturally occurring, flammable liquid found in rock formations in the Earth consisting of a complex mixture of hydrocarbons of various molecular weights, plus other organic compounds....
, Limestone
Limestone

File:Limestone Formation In Waitomo.jpgLimestone is a sedimentary rock composed largely of the mineral calcite . The deposition of limestone strata is often a by-product and indicator of biological activity in the geology record....
 and Thorium
Thorium

Thorium is a chemical element with the symbol Th and atomic number 90. As a naturally occurring, slightly radioactive metal, it has been considered as an alternative nuclear fuel to uranium....
 (world's largest along Kerala
Kerala

Kerala is a Indian Union States and territories of India located in the southwestern part of India. With an Arabian Sea coastline on the west, it is bordered on the north by Karnataka and by Tamil Nadu on the south and east....
's shores). India's oil reserves
Oil reserves

Oil reserves are the estimated quantities of crude oil that are claimed to be recoverable under existing economic and business operations conditions....
, found in Bombay High
Bombay High

Bombay High is an offshore oilfield 160 km off the coast of Mumbai . Despite the name of Bombay being changed to Mumbai, the name of the rigs remains Bombay High....
 off the coast of Maharashtra
Maharashtra

Maharashtra is a States and territories of India located on the western coast of India. Maharashtra is a part of Western India. It is India's List of states of India by area and List of states of India by population....
, Gujarat
Gujarat

Gujarat is a States and territories of India in western India. Gujarat borders Pakistan to the north west and the state of Rajasthan to the north and northeast, Madhya Pradesh to the east, Maharashtra and the Union territory of Diu, Daman District, India, Dadra and Nagar Haveli to the south....
, Rajasthan
Rajasthan

Rajasthan is the largest States and territories of India of the Republic of India in terms of area. It encompasses most of the area of the large, inhospitable Great Indian Desert , which has an edge paralleling the Sutlej-Indus river valley along its border with Pakistan....
 and in eastern Assam
Assam

Assam ) is a North-East India state of India with its capital at Dispur, in the outskirts of the city Guwahati. Located south of the eastern Himalayas, Assam comprises the Brahmaputra and the Barak River river valleys and the Karbi Anglong District and the North Cachar Hills with an area of 30,285 square miles ....
 meet 25% of the country's demand.

Rising energy demand concomitant with economic growth has created a perpetual state of energy crunch in India. India is poor in oil resources and is currently heavily dependent on coal and foreign oil imports for its energy needs. Though India is rich in Thorium
Thorium

Thorium is a chemical element with the symbol Th and atomic number 90. As a naturally occurring, slightly radioactive metal, it has been considered as an alternative nuclear fuel to uranium....
, but not in Uranium
Uranium

Uranium is a silvery-gray metallic chemical element in the actinide series of the periodic table that has the chemical symbol U and atomic number 92....
, which it might get access to in light of the nuclear deal with US. India is rich in certain energy resources which promise significant future potential - clean / renewable energy resources like solar
Solar power in India

India is both densely populated and has high solar insolation, providing an ideal combination for solar power in India. Much of the country does not have an electric grid, so one of the first applications of solar power has been for water pumping, to begin replacing India's four to five million diesel powered water pumps, each consuming about...
, wind
Wind power in India

The development of wind power in India began in the 1990s, and has significantly increased in the last few years. Although a relative newcomer to the wind industry compared with Denmark or the US, a combination of domestic policy support for wind power and the rise of Suzlon have led India to become the country with the fourth largest instal...
, biofuels (jatropha, sugarcane).

Globalization


Until the liberalisation of 1991, India was largely and intentionally isolated from the world markets, to protect its fledging economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment
Foreign direct investment

Foreign direct investment in its classic form is defined as a company from one country making a physical investment into building a factory in another country....
 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 industrial sector.

India currently accounts for 1.2% of World trade as of 2006 according to the WTO. Despite reducing import restrictions several times in the 2000s, International trade
International trade

International trade is exchange of Capital , goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product ....
 as a proportion of GDP reached 24% by 2006, up from 6% in 1985 and still relatively moderate. India was evaluated by the World Trade Organization in 2008 as more restrictive than similar developing economies, such as Brazil, China, and Russia. The WTO also identified electricity shortages and inadequate transportation infrastructure as significant constraints on trade.

Since independence, India's balance of payments
Balance of payments

In economics, the balance of payments, measures the payments that flow between any individual country and all other countries. It is used to summarize all international economics transactions for that country during a specific time period, usually a year....
 on its current account
Current account

The current account is the difference between a nation's exports of goods and services and its imports of goods and services, if all financial transfers and investments and the like are ignored....
 has been negative.

Foreign direct investment
Foreign direct investment

Foreign direct investment in its classic form is defined as a company from one country making a physical investment into building a factory in another country....
 in India has reached 2% of GDP, compared with 0.1% in 1990, and Indian investment in other countries rose sharply in 2006. 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. FDI inflows into India reached a record US$19.5bn in fiscal year 2006/07 (April-March), according to the government's Secretariat for Industrial Assistance. This was more than double the total of US$7.8bn in the previous fiscal year. The FDI inflow for 2007-08 has been reported as $24bn and for 2008-09, it is expected to be above $35 billion. A critical factor in determining India's continued economic growth and realizing the potential to be an economic superpower is going to depend on how the government can create incentives for FDI flow across a large number of sectors in India.

Currency

M The Indian rupee
Indian rupee

The rupee is the currency of India. The issuance of the currency is controlled by the Reserve Bank of India. The most commonly used symbols for the rupee are Rs, ? and ??....
 is the only legal tender
Legal tender

Legal tender or forced tender is payment that, by law, cannot be refused in settlement of a debt.Legal tender is variously defined in different jurisdictions....
 accepted in India. The exchange rate as of March 07,2009 is 51.725 rupees to a US dollar, 65.4498 to a Euro, and 72.8726 to a UK pound. The Indian rupee is accepted as legal tender in the neighboring Nepal
Nepal

Nepal , officially the Federal Democratic Republic of Nepal, is a landlocked country in South Asia and is the world's youngest republic. It is bordered to the north by the People's Republic of China, and to the south, east, and west by India....
 and Bhutan
Bhutan

The Kingdom of Bhutan is a landlocked nation in South Asia, located at the eastern end of the Himalaya Mountains and is bordered to the south, east and west by India and to the north by the Tibet Autonomous Region of the People's Republic of China....
, both of which peg their currency to that of the Indian rupee. The rupee is divided into 100 paise
Paisa

A paisa is a monetary unit currently equivalent to of a rupee or Bangladeshi taka and is used in several countries, including Bangladesh, India, Nepal, and Pakistan....
. The highest-denomination banknote is the 1,000 rupee note; the lowest-denomination coin in circulation is the 25 paise coin (it earlier had 1,2,5,10 and 20 paise coins which have been discontinued by the Reserve Bank of India). There has been a recent fall in the value of the Rupee as a result of the global financial crisis of 2008, as foreign institutional investors sold $14 billion worth of Indian stocks in 2008 and invested in US treasury bonds.

India inherited several institutions, such as the civil services, Reserve Bank of India, railways, etc., from its British
British Raj

British Raj primarily refers to the British rule in the Indian subcontinent between 1858 and 1947; it can also refer to the period of dominion, and even the region under the rule....
 rulers. Mumbai
Mumbai

Mumbai— formerly Bombay, is the capital of the Indian state of Maharashtra. The city proper has approximately 14 million people and, along with the neighbouring suburbs of Navi Mumbai and Thane, Mumbai forms the World's largest urban agglomerations according to the United Nations World Urbanization Prospects report with around 19...
 serves as the nation's commercial capital, with the Reserve Bank of India (RBI), Bombay Stock Exchange
Bombay Stock Exchange

The Bombay Stock Exchange Limited has the greatest number of listed companies in the world, with 4700 listed as of August 2007. It is located at Dalal Street, Mumbai, India....
 (BSE) and the National Stock Exchange
National Stock Exchange of India

The National Stock Exchange of India Limited , is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading.....
 (NSE) located here. The headquarters of many financial institutions are also located in the city.

The RBI, the country's central bank
Central bank

A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country or of a group of member states....
 was established on April 1, 1935. It serves as the nation's monetary authority, regulator and supervisor of the financial system, manager of exchange control and as an issuer of currency. The RBI is governed by a central board, headed by a governor who is appointed by the Central government of India.

Income and consumption


As of 2005, 85.7% of the population lives on less than $2.50 (PPP) a day, down from 92.5% in 1981. This compares with 80.5% in Sub-Saharan Africa
Sub-Saharan Africa

Sub-Saharan Africa is a geographical term used to describe the area of the African continent which lies south of the Sahara, or those African countries which are fully or partially located south of the Sahara....
. 75.6% of the population lives on less than $2 a day (PPP), which is around 20 rupees or $0.5 a day in nominal terms. It was down from 86.6% and compares with 73.0% in Sub-Saharan Africa. A 24.3% of the population earned less than $1 (PPP, around $0.25 in nominal terms) a day in 2005, down from 42.1% in 1981. 41.6% of its population is living below the new international poverty line of $1.25 (PPP) per day, down from 59.8% in 1981. The World Bank further estimates that a third of the global poor now reside in India.

Today, more people afford to a bicycle
Bicycle

The bicycle, bike, or cycle is a pedal-driven, human-powered transport with two bicycle wheel attached to a bicycle frame, one behind the other....
 than ever before. Some 40% of Indian households owns a bicycle, with ownership rates ranging from around 30% to 70% at state level. Housing is still very modest. According to Times of India, "a majority of Indians have per capita space 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." The average is 103 sq ft per person in rural areas and 117 sq ft per person in urban areas.

Around half of Indian children are malnourished. The proportion of underweight children is nearly double that of Sub-Saharan Africa. However, India has not had famines
Famine in India

File:Starved child.jpgThere were 14 famines in History of India between 11th and 17th century . For example, during the 1022-1033 Great famines in India entire provinces were depopulated....
 since the Green Revolution
Green Revolution

Green Revolution usually refers to the transformation of agriculture that began in 1945. One significant factor came at the request of the Mexican government to establish an agricultural research station to develop more varieties of wheat that could be used to feed the rapidly growing population of the country....
 in the early 1970s. While poverty in India has reduced significantly, official figures estimate that 27.5% of Indians still lived below the national poverty line of $1 (PPP, around 10 rupees in nominal terms) a day in 2004-2005. 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 rupees per day with most working in "informal labour sector with no job or social security, living in abject poverty."

Since the early 1950s, successive governments have implemented various schemes, under planning
Planned economy

A planned economy or directed economy is an economic system in which the government or workers' councils manages the economy. It is an economic system in which the central government makes all decisions on the production and consumption of goods and services....
, to alleviate poverty, 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. In August 2005, the Indian parliament
Parliament of India

The Parliament of India is the Federal government and supreme legislative body of India. It consists of the office of President of India and two houses, the lower house, known as the Lok Sabha and the upper house, known as the Rajya Sabha.....
 passed the Rural Employment Guarantee Bill, the largest programme of this type in terms of cost and coverage, which promises 100 days of minimum wage employment to every rural household in 200 of India's 600 districts
Districts of India

A district is an administrative division of an Indian States of India or Union territories. Districts are further subdivided, in some cases into Subdivisions of India, and otherwise directly into tehsil....
. The question of whether economic reforms have reduced poverty or not has fuelled debates without generating any clear cut answers and has also put political pressure on further economic reforms, especially those involving the downsizing of labour and cutting agricultural subsidies.

Employment

Agricultural and allied sectors accounted for about 57% of the total workforce in 1999–2000, down from 60% in 1993–94. While agriculture has faced stagnation in growth, services have seen a steady growth. Of the total workforce, 8% is in the organised sector, two-thirds of which are in the public sector. The NSSO survey estimated that in 1999–2000, 106 million, nearly 10% of the population were unemployed and the overall unemployment rate was 7.32%, with rural areas doing marginally better (7.21%) than urban areas (7.65%). India's labor force is growing by 2.5% every year, but employment is growing only at 2.3% a year.

India's labor force is growing by 2.5% every year, but employment is growing only at 2.3% a year. Official unemployment exceeds 9%. Regulation and other obstacles have discouraged the emergence of formal businesses and jobs. Almost 30% of workers are casual workers who work only when they are able to get jobs and remain unpaid for the rest of the time. Only 10% of the workforce is in regular employment. India's labor regulations are heavy even by developing country standards and analysts have urged the government to abolish them.

Unemployment in India is characterized by chronic underemployment
Underemployment

In economics, the term underemployment has three different distinct meanings and applications. While it is related to unemployment, a situation in which a person who is searching for work cannot find a job, in the case of underemployment, a person is working....
 or disguised unemployment
Unemployment types

economics distinguish between various types of unemployment, including cyclical unemployment, frictional unemployment, structural unemployment and classical 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 decreased role of the public sector after liberalization has further underlined the need for focusing on better education and has also put political pressure on further reforms.

Child labor
Child labor

Child labour, or child labor, is the employment of children at regular and sustained labour. This practice is considered exploitative by many countries and international organizations....
 is a complex problem that is basically rooted in poverty. The Indian government is implementing the world's largest child labor elimination program, with primary education targeted for ~250 million. Numerous non-governmental and voluntary organizations are also involved. Special investigation cells have been set up in states to enforce existing laws banning employment of children (under 14) in hazardous industries. The allocation of the Government of India for the eradication of child labor
Child labor

Child labour, or child labor, is the employment of children at regular and sustained labour. This practice is considered exploitative by many countries and international organizations....
 was $10 million in 1995-96 and $16 million in 1996-97. The allocation for 2007 is $21 million.

In 2006, remittances
Remittances to India

Remittances to India are money transfers from Indian workers employed outside the country to friends or relatives in India. In 2006, they totalled $22 billion which was up from $14 billion, two years before....
 from Indian migrants overseas made up $27 billion or about 3% of India's GDP.

Development issues


Agriculture


The low productivity in India is a result of the following factors:
  • According to "India: Priorities for Agriculture and Rural Development" by World Bank, India's large agricultural subsidies are hampering productivity-enhancing investment. Overregulation of agriculture has increased costs, price risks and uncertainty. Government interventions in labor, land, and credit markets are hurting the market. Infrastructure and services are inadequate.
  • Illiteracy, general socio-economic backwardness, slow progress in implementing land reforms and inadequate or inefficient finance and marketing services for farm produce.
  • The average size of land holdings is very small (less than 20,000 m˛) and is subject to fragmentation, due to land ceiling acts and in some cases, family disputes. Such small holdings are often over-manned, resulting in disguised unemployment and low productivity of labour.
  • Adoption of modern agricultural practices and use of technology
    Agricultural machinery

    Agricultural machinery is one of the most revolutionary and impactful applications of modern technology. The truly elemental human need for food has often driven the development of technology and machines....
     is inadequate, hampered by ignorance of such practices, high costs and impracticality in the case of small land holdings.
  • World Bank says that the allocation of water is inefficient, unsustainable and inequitable. The irrigation
    Irrigation

    Irrigation is an artificial application of water to the soil usually for assisting in growing crops. In crop production it is mainly used in dry areas and in periods of rainfall shortfalls, but also to protect plants against frost....
     infrastructure is deteriorating. Irrigation facilities are inadequate, as revealed by the fact that only 52.6% of the land was irrigated in 2003–04, which result in farmers still being dependent on rainfall, specifically the Monsoon
    Monsoon

    A monsoon is a seasonal prevailing wind that lasts for several months. The term was first used in English in India, Bangladesh, Pakistan, and neighboring countries to refer to the big seasonal winds blowing from the Indian Ocean and Arabian Sea in the southwest bringing heavy rainfall to the region....
     season. A good monsoon results in a robust growth for the economy as a whole, while a poor monsoon leads to a sluggish growth. Farm credit is regulated by NABARD, which is the statutory apex agent for rural development in the subcontinent.


India has many farm insurance companies that insure wheat, fruit, rice and rubber farmers in the event of natural disasters or catastrophic crop failure, under the supervision of the Ministry of Agriculture
Ministry of Agriculture

An agriculture ministry is a Ministry or other government agency charged with agriculture. The ministry is often headed by a minister for agriculture....
. One notable company that provides all of these insurance policies is agriculture insurance company of india
Agriculture insurance company of india

Agriculture Insurance Company of India Limited is a public sector undertaking headquartered out of New Delhi, India. It currently offers area based and weather based crop insurance programs in almost 500 districts of India....
 and it alone insures almost 20 million farmers.

India's population is growing faster than its ability to produce rice and wheat. The most important structural reform for self-sufficiency is the ITC Limited plan to connect 20,000 villages to the Internet by 2013. This will provide farmers with up to date crop prices for the first time, which should minimise losses incurred from neighbouring producers selling early and in turn facilitate investment in rural areas.

Corruption


India ranked 120th on the Ease of Doing Business Index
Ease of Doing Business Index

The Ease of Doing Business Index is an index created by the World Bank. Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights....
 2008, behind countries such as China
People's Republic of China

The People's Republic of China , commonly known as China, is the largest country in East Asia and the List of countries by population in the world with over 1.3 billion people, approximately a fifth of the world's population....
 (83rd), Pakistan
Pakistan

Pakistan , officially the Islamic Republic of Pakistan, is a country located in South Asia and borders Central Asia and the Middle East. It has a 1,046 kilometre coastline along the Arabian Sea and Gulf of Oman in the south, and is bordered by Afghanistan and Iran in the west, India in the east and People's Republic of China in th...
 (86th), and Nigeria
Nigeria

Nigeria, officially the Federal Republic of Nigeria, is a federation constitutional republic comprising States of Nigeria and one Federal Capital Territory, Nigeria....
 (108th).

Corruption
Political corruption

Political corruption is the use of governmental powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption....
 has been one of the pervasive problems affecting India. The economic reforms of 1991 reduced the red tape
Red tape

"Red tape" is a derisive term for excessive regulation or rigid conformity to formal rules that is considered redundant or Bureaucracy and hinders or prevents action or decision-making....
, bureaucracy and the Licence Raj that had strangled private enterprise and was blamed for the corruption and inefficiencies. Yet, a 2005 study by Transparency International
Transparency International

Transparency International is an international non-governmental organization addressing corruption. This includes, but is not limited to, political corruption....
 (TI) India found that more than half of those surveyed had firsthand experience of paying bribe or peddling influence to get a job done in a public office.

The Right to Information Act
Right to Information Act

The Right to Information Act 2005 is a law enacted by the Parliament of India giving citizens of India access to records of the Government of India and State Governments as well as private colleges....
 (2005) and equivalent acts in the states, that require 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 or at least have opened up avenues to redress grievances. The 2007 report by Transparency International ranks India at 72nd place and states that significant improvements were made by India in reducing corruption.

Government

Private and Public Industry Employment in India(2003)
The current government has concluded that most spending fails to reach its intended recipients. Lant Pritchett
Lant Pritchett

Lant Pritchett is an American developmental economist.He was born in Utah in 1959 and raised in Boise, Idaho. He graduated from Brigham Young University in 1983 with a B.S....
 calls India's public sector "one of the world's top ten biggest problems - of the order of AIDS and climate change". The Economist
The Economist

The Economist is an English-language weekly news and international relations publication owned by The Economist Newspaper Ltd. and edited in London....
's article about Indian civil service (2008) says that Indian central government employs around 3 million people and states another 7 million, including "vast armies of paper-shuffling peons". Million dollar bureaucracies can be run without a single computer in the management.

At local level, administration can be worse. It is not unheard of that most state assembly seats are held by convicted criminals. One study found out that 25% of public sector teachers and 40% of public sector medical workers could not be found at the workplace. India's absence rates are one of the worst in the world.

The Reserve Bank of India has warned that India's public-debt to GDP ratio is over 70 percent. The government of India is highly indebted
List of countries by public debt

This is a list of countries by Government debt as percentage of annual gross domestic product, based on The World Factbook, OECD Economic Outlook and IMF estimates....
 and its former investment-grade status has deteriorated near junk status.

Education

India has made huge progress in terms of increasing primary education
Primary education

A primary school is an institution where children receive the first stage of compulsory education known as Primary education. Primary school is the preferred term in the United Kingdom and many Commonwealth of Nations, and in most publications of the United Nations Educational, Scientific, and Cultural Organization ....
 attendance rate and expanding literacy
Literacy in India

Literacy in India is an indispensable means for effective social and economic participation, contributing to human development and poverty reduction, says UNESCO....
 to approximately two thirds of the population. However, education is still far behind developing countries such as China. Most children never attend secondary schools. An optimistic estimate is that only one in five job-seekers in India has ever had any sort of vocational training.

Infrastructure

Development of infrastructure was completely in the hands of the public sector and was plagued by corruption, bureaucratic inefficiencies, urban-bias and an inability to scale investment. India's low spending on power, construction, transportation, telecommunications and real estate
Real estate

Real estate is a law term that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is fixed in location.
, 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 which has helped in a sustained growth rate of close to 9% for the past six quarters.

Some 600 million Indians have no mains electricity at all. While 80 percent of Indian villages have at least an electricity line, just 44 percent of rural households have access to electricity. According to a sample of 97,882 households in 2002, electricity was the main source of lighting for 53% of rural households compared to 36% in 1993. Some half of the electricity is stolen, compared with 3% in China. The stolen electricity amounts to 1.5% of GDP. Almost all of the electricity in India is produced by the public sector. Power outages are common. Many buy their own power generators to ensure electricity supply. As of 2005 the electricity production was at 661.6 billion kWh with oil production standing at 785,000 bbl/day. In 2007, electricity demand exceeded supply by 15%. Multi Commodity Exchange
Multi Commodity Exchange

Multi Commodity Exchange is an independent commodity exchange based in India. It was established in 2003 and is based in Mumbai. The turnover of the exchange for the period Apr-Dec 2008 was INR 32 Trillion ....
 has tried to get a permit to offer electricity future markets.

Indian Road Network
Indian Road Network

India has a huge network of over 3.314 million kilometers of roadways , making it List of countries by road network size in the world. This huge network, which includes both paved and unpaved roads, are categorized as expressways or freeways, National Highways, State Highways, major district roads, and rural & other roads....
 is developing. Trucking goods from Gurgaon
Gurgaon

Gurgaon is the sixth largest city in the Indian Indian state of Haryana. According to the 2001 India census, Gurgaon has a population of 228,820....
 to the port in Mumbai
Mumbai

Mumbai— formerly Bombay, is the capital of the Indian state of Maharashtra. The city proper has approximately 14 million people and, along with the neighbouring suburbs of Navi Mumbai and Thane, Mumbai forms the World's largest urban agglomerations according to the United Nations World Urbanization Prospects report with around 19...
 can take up to 10 days. Taxes and bribes are common between state borders; Transparency International estimates that truckers pay annually $5 billion in bribes. India has the world's second largest road network
List of countries by road network size

This is a list of countries by road network size, mostly based on CIA World Factbook .External linksReferences...
. Although India has only 1% of the world's vehicles, India has 8 per cent of the world's vehicle fatalities.

Container traffic is growing at 15% a year. Some 60% of India’s container traffic is handled by the Jawaharlal Nehru Port Trust in Mumbai
Mumbai

Mumbai— formerly Bombay, is the capital of the Indian state of Maharashtra. The city proper has approximately 14 million people and, along with the neighbouring suburbs of Navi Mumbai and Thane, Mumbai forms the World's largest urban agglomerations according to the United Nations World Urbanization Prospects report with around 19...
. It has just 9 berths compared to 40 in Singapore
Singapore

Singapore , officially the Republic of Singapore, is an island country microstate located at the southern tip of the Malay Peninsula. It lies 137 kilometres north of the equator, south of the Malaysian state of Johor and north of Indonesia's Riau Islands....
's main port. It takes an average of 21 days to clear import cargo in India compared to just 3 in Singapore. China had 30 times more container traffic in 2004.

Internet use is rare; there were only 2.1 million broadband lines in India in January 2007.

Most cities supply water only a few hours a day and none provides 24h water. A World Bank report says it is an institutional problem in water agencies, or "how the agency is embedded in the relationships between politics and the citizens who are the consumers." Only 13% of sewage is treated according to one estimate, leaving rivers and other water resources under severe strain. Some 700 million Indians do not have access to a proper toilet.

Labour laws

India's restrictive labor regulations hamper the large-scale creation of formal industrial jobs.

Internal imbalances


in Bihar
Bihar

Bihar is a States and territories of India in East India. Bihar is the 12th largest state in terms of geographical size 38,202 square mile and 3rd largest by population....
, the poorest state in India.]] One of the critical problems facing India's economy is the sharp and growing regional variations among India's different states and territories in terms of per capita income, poverty, availability of infrastructure and socio-economic development. Seven low-income states - Bihar
Bihar

Bihar is a States and territories of India in East India. Bihar is the 12th largest state in terms of geographical size 38,202 square mile and 3rd largest by population....
, Chhattisgarh
Chhattisgarh

Chhattisgarh , a States and territories of India in central India, formed when the sixteen Chhattisgarhi-speaking southeastern districts of Madhya Pradesh gained statehood on November 1, 2000....
, Jharkhand
Jharkhand

Jharkhand is a States and territories of India in eastern India. It was carved out of the southern part of Bihar state on 15 November 2000. Jharkhand shares its border with the states of Bihar to the north, Uttar Pradesh and Chhattisgarh to the west, Orissa to the south, and West Bengal to the east....
, Madhya Pradesh
Madhya Pradesh

Madhya Pradesh , often called the Heart of India, is a States and territories of India in central India. Its capital is Bhopal. Madhya Pradesh was originally the largest state in India until November 1, 2000 when the state of Chhattisgarh was carved out....
, Orissa
Orissa

Orissa , is a states and territories of India located on the east coast of India, by the Bay of Bengal. It was established on 1 April 1936 as a province in British India, and consists, predominantly of Oriya language speakers....
, Rajasthan
Rajasthan

Rajasthan is the largest States and territories of India of the Republic of India in terms of area. It encompasses most of the area of the large, inhospitable Great Indian Desert , which has an edge paralleling the Sutlej-Indus river valley along its border with Pakistan....
, and Uttar Pradesh
Uttar Pradesh

Uttar Pradesh , [often referred to as U.P.] is a States and territories of India located in the northern part of India. With a population of over 190 million people,...
 - are home to more than half of India's population.

Between 1999 and 2008, the annualized growth rates for Gujarat
Gujarat

Gujarat is a States and territories of India in western India. Gujarat borders Pakistan to the north west and the state of Rajasthan to the north and northeast, Madhya Pradesh to the east, Maharashtra and the Union territory of Diu, Daman District, India, Dadra and Nagar Haveli to the south....
 (8.8%), Haryana
Haryana

Haryana is a States and territories of India in the Punjab region of northern India. It is bordered by Punjab and Himachal Pradesh to the north, and by Rajasthan to the west and south....
 (8.7%), or Delhi
Delhi

Delhi , sometimes referred to as Dilli , is the List of most populous cities in India metropolis in India and, with over 11 million residents, the List of metropolitan areas by population....
 (7.4%) were much higher than for Bihar
Bihar

Bihar is a States and territories of India in East India. Bihar is the 12th largest state in terms of geographical size 38,202 square mile and 3rd largest by population....
 (5.1%), Uttar Pradesh
Uttar Pradesh

Uttar Pradesh , [often referred to as U.P.] is a States and territories of India located in the northern part of India. With a population of over 190 million people,...
 (4.4%), or Madhya Pradesh
Madhya Pradesh

Madhya Pradesh , often called the Heart of India, is a States and territories of India in central India. Its capital is Bhopal. Madhya Pradesh was originally the largest state in India until November 1, 2000 when the state of Chhattisgarh was carved out....
 (3.5%).

Poverty rates in rural Orissa
Orissa

Orissa , is a states and territories of India located on the east coast of India, by the Bay of Bengal. It was established on 1 April 1936 as a province in British India, and consists, predominantly of Oriya language speakers....
 (43%) and rural Bihar
Bihar

Bihar is a States and territories of India in East India. Bihar is the 12th largest state in terms of geographical size 38,202 square mile and 3rd largest by population....
 (40%) are some of the worst in the world. On the other hand, rural Haryana
Haryana

Haryana is a States and territories of India in the Punjab region of northern India. It is bordered by Punjab and Himachal Pradesh to the north, and by Rajasthan to the west and south....
 (5.7%) and rural Punjab
Punjab (India)

Punjab is a States and territories of India in northwest India. The Indian state borders the Pakistani province of Punjab to the west, Jammu and Kashmir to the north, Himachal Pradesh to the northeast, Haryana to the south and southeast, Chandigarh to the southeast and Rajasthan to the southwest....
 (2.4%) compare well with middle-income countries.

The five-year plans have attempted to reduce regional disparities by encouraging industrial development in the interior regions, but industries still tend to concentrate around urban areas and port cities After liberalization, the more advanced states are better placed to benefit from them, with infrastructure like well developed ports, urbanisation and an educated and skilled workforce which attract manufacturing and service sectors. The union and state governments of backward regions are trying to reduce the disparities by offering tax 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 is faster to develop than other sectors.

Environment and health


On Yale and Columbia's Environmental Performance Index
Environmental Performance Index

The Environmental Performance Index is a method of quantifying and numerically benchmarking the environmentalism performance of a country's policies....
, India's score is 21/100 on sanitation, compared with 67/100 for the region and 48/100 for the country income group.

About 1.2 billion people in developing nations lack clean, safe water because most household and industrial wastes are dumped directly into rivers and lakes without treatment. This contributes to the rapid increase in waterborne diseases in humans. Out of India's 3119 towns and cities, just 209 have partial treatment facilities, and only 8 have full wastewater treatment facilities (WHO 1992). 114 cities dump untreated sewage
Sewage

Sewage is the mainly liquid waste containing some solids produced by humans which typically consists of washing water, feces, urine, laundry waste and other material which goes down Plumbing fixture from households and industry....
 and partially cremated bodies directly into the Ganges River. Downstream, the untreated water is used for drinking, bathing, and washing. This situation is typical of many rivers in India as well as other developing countries. NewsWeek describes Delhi's sacred Yamuna River as "a putrid ribbon of black sludge" where fecal bacteria is 10,000 over safety limits despite a 15-year program to address the problem. Cholera
Cholera

Cholera, sometimes known as Asiatic or epidemic cholera, is an infectious gastroenteritis caused by enterotoxin-producing strains of the bacterium Vibrio cholerae....
 epidemics are not unknown. Open defecation
Defecation

Defecation is the final act of digestion by which organisms eliminate solid, semisolid or liquid waste material from the digestive tract via the anus....
 is widespread even in urban areas of India.

Indoor air pollution from burning wood, coal and animal dung is widespread. 70% of rural households in India lack ventilation. Particulate concentrations in houses are reported to range from 8,300 to 15,000 µg/m3, greatly exceeding the 75 µg/m3 maximum standard for indoor particulate matter in the United States.

Changes in ecosystem biological diversity, evolution of parasites, and invasion by exotic species all frequently result in disease outbreaks such as cholera
Cholera

Cholera, sometimes known as Asiatic or epidemic cholera, is an infectious gastroenteritis caused by enterotoxin-producing strains of the bacterium Vibrio cholerae....
 which emerged in 1992 in India. The frequency of AIDS
AIDS

Acquired immune deficiency syndrome or acquired immunodeficiency syndrome is a disease of the human immune system caused by the HIV ....
/HIV
HIV

Human immunodeficiency virus is a lentivirus that can lead to AIDS , a condition in humans in which the immune system begins to fail, leading to life-threatening opportunistic infections....
 is increasing. In 1996, about 46,000 Indians out of 2.8 million (1.6 % of the population) tested were found to be infected with HIV.

Even in the rich regions, health care is poor. World Bank reports that "a detailed survey of the knowledge of medical practitioners for treating five common conditions in Delhi found that the typical quality doctor in a public primary health center has a more than 50-50 chance of recommending a harmful treatment". The competence rating of India's doctors is below Tanzania
Tanzania

Tanzania , officially the United Republic of Tanzania , is a country in East Africa that is bordered by Kenya and Uganda on the north, Rwanda, Burundi and the Democratic Republic of the Congo on the west, and Zambia, Malawi and Mozambique on the south....
's.

See also

  • Economic development in India
  • List of Indian companies
    List of Indian companies

    This is a list of major companies based in India. Please note that the list is highly incomplete and does not have every company of all sizes. More information about the companies can be found in the links to the company articles....
  • International investment position
    International investment position

    File:Nettoauslandsverm?genUSen.PNGA country's international investment position is a financial statement setting out the value and composition of that country's external financial assets and liabilities....
  • Bilateral Investment Treaty
    Bilateral Investment Treaty

    A Bilateral Investment Treaty is an agreement establishing the terms and conditions for private investment by nationals and companies of one state in the state of the other....
  • Energy policy
    Energy policy of India

    File:182619562 00d6f703b6 b.jpgThe energy policy of India is characterized by tradeoffs between four major drivers:* Rapidly growing economy, with a need for dependable and reliable supply of electricity, natural gas, and petroleum products;...
  • List of co-operative banks in India
    List of co-operative banks in India

    This is a list of Cooperative bank in India....
  • Indian Construction Industry
    Indian Construction Industry

    The evolution of Indian Construction Industry was almost similar to the construction industry evolution in other countries : founded by Government and slowly taken over by enterprises....


External links

Government of India websites
  • - Official website for Investment and Trade in India


Publications and statistics
  • [https://www.cia.gov/library/publications/the-world-factbook/geos/in.html CIA - The World Factbook – India]