Chill Saturday part 2! Uber chill I’d say, but have to keep working as well. Anyway, today’s learnings – Introduction to Indian Economy
Introduction to Indian Economy
- The Indian Economy is a mixed developing economy which means it has both the essence of a private and public economy and it is the sixth largest economy in terms of Nominal GDP after USA, China, Japan, Germany and UK.
- It is also the third largest economy in terms of Purchasing Power Parity – PPP – after USA and China and the highest employment is contributed by the agriculture sector.
- The highest contributing sector to GDP is service sector and the economy is highly diversified with the influences of traditional villages, modern farming, handicrafts, industries and services.
- The Indian economy can be bifurcated into two distinct phases – Pre Liberalization Era (Before 1991 Reforms) and Post Liberalization Era (After 1991 reforms)
- The low annual growth rate of India before liberalization of 1991 stood at 3.5% from 1950s to 1980s while the per capita income growth averaged 1.3% is termed as Hindu Rate of Growth – by Raj Krishna and it is also known as Nehruvian Socialism.
- Inspite of India being an agro based economy, much emphasis was given to factors like development of industries (Capital & Consumer goods), development of service sector (Banking system, construction sector etc), and development of socio economic infrastructure like education and health.
Nature of Indian Economy
- The nature of Indian economy is based on 3 parameters – Production, Ownership/Organization and Habitation
- The Production based economy has few factors like – Primary / Agriculture sector which includes Dairy, Poultry, Animal Husbandry, and other allied activities, secondary / manufacturing sector like small, medium, large scale facilities and all types of manufacturing units and finally tertiary / service sector which includes dairy, poultry, animal husbandry and other allied activities.
- The Ownership based economy has few factors like Private sector which is managed by private enterprises and public sector which is managed by the government
- Then based economy has few factors like rural sector where the main occupation is agriculture and into primary sector, whereas urban sector where the main occupation is either manufacturing or service.
Issues in the Indian Underdeveloped Economy
- The major issues in the Indian Economy are as follows –
- Predominance of Agriculture
- Population Explosion
- Low Per capita Income
- Low gross domestic savings (% of GDP)
- High Unemployment and underemployment
- Traditional social life and orthodox nature
- Poverty
- Unequal distribution of Income and wealth
- Primitive and backward techniques of production in agriculture.
So this was all about Introduction to Indian Economy. Stay tuned for more blogs!
