Economy of India

Economy of India
Economy of India

Mumbai, Maharashtra is considered the trade and commerce capital of India

Rank

10th (nominal) / 3rd (PPP)

Currency

Indian rupee (INR) (

Fiscal year

1 April 31 March

Trade organizations

WTO, SAFTA, BRIC, G-20 and others

) = 100 Paise

Statistics
GDP

GDP growth

$1.87 trillion (nominal: 10th; 2013)

$5.07trillion (PPP: 3rd; 2013)
5.7% (2014)

GDP per capita

$1,504 (nominal: 130th; 2013)

$4,077(PPP: 127th; 2013)

GDP by sector

agriculture: 13.7%, industry: 21.5%, services: 64.8% (2013)

Inflation (CPI)

CPI: 8.79%, WPI: 5.05% (January 2014)

Population below poverty

line

29.5% (2012, Rangarajan panel)

22% (2012, Reserve Bank of India),
[3]
14.3% or 179.6 million people (2014, World Bank)

Gini coefficient

33.9

Labour force

487.3 million (2013 est.)

Labour force by
occupation

agriculture: 49%, industry: 20%, services: 31% (2012 est.)

Unemployment

3% Urban, 2% Rural, 10.8 million Total

(2013, NSSO method)

Average gross salary

[5]
$1.46 per hour ($3,036.8 yearly in 2010);
[6]
GNI per capita: $1,570 yearly per person (2013);
[7]
Average household income: $6,671 yearly (2011)

Main industries

agriculture, petroleum products, chemicals, pharmaceuticals, software, textiles, steel, transportation equipment,
[8][9]
machinery, cement, mining, construction

[1][2]

[4]

Economy of India

Ease-of-doing-business
rank

2
134th (2014)

External
Exports

$296.8 billion: merchandize exports,

$145.6 billion: services exports,
[10]
$442.4 billion: total (2012)

Export goods

software, petrochemicals, agriculture products, jewelry, engineering goods,

transportation parts, ores and other commodities

Main export partners

[11]

pharmaceuticals, textiles, chemicals,

European Union 16.8%(2012)

United States 12.8%
United Arab Emirates 12.4%
China 5.1%
Singapore 4.7%

Imports

$488.6 billion: merchandize imports,

$128.1 billion: services imports,
$616.7 billion: total (2012)

Import goods

crude oil, gold and precious stones, electronics, engineering goods, chemicals, plastics, coal and ores, iron and steel,
vegetable oil and other commodities

Main import partners

FDI stock

China 11.1% (2012)

European Union 11.1%
United Arab Emirates 7.7%
Saudi Arabia 6.7%
Switzerland 5.9%
Inflows: $151.7billion,
[12]
Outflows: $54.6billion (2009-2013)
Public finances
[13]

Public debt

66.7% of GDP (2013.)

Budget deficit

4.8% of GDP (201213)

Revenues

$181.3billionbillion (2013 est.)

Expenses

$281.6billionbillion (2013 est.)

Economicaid

$2.107billion (2008)

Credit rating

BBB- (Domestic)
BBB- (Foreign)
BBB+ (T&C Assessment)
Outlook: Stable
(Standard & Poor's)

Foreign reserves

[14]

[15]

$316.39billion

[16]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The economy of India is the tenth-largest in the world by nominal GDP and the third-largest by purchasing power
parity (PPP). The country is one of the G-20 major economies, a member of BRICS and a developing economy that
is among the top 20 global traders according to the WTO.[17] India was the 19th-largest merchandise and the 6th
largest services exporter in the world in 2013; it imported a total of $616.7 billion worth of merchandise and services
in 2013, as the 12th-largest merchandise and 7th largest services importer.[18] India's economic growth slowed to
4.7% for the 201314 fiscal year, in contrast to higher economic growth rates in 2000s.[19] IMF projects India's GDP

Economy of India
to grow at 5.4% over 2014-15. Agriculture sector is the largest employer in India's economy but contributes a
declining share of its GDP (13.7% in 2012-13). Its manufacturing industry has held a constant share of its economic
contribution, while the fastest-growing part of the economy has been its services sector - which includes
construction, telecom, software and information technologies, infrastructure, tourism, education, health care, travel,
trade, banking and others components of its economy.
The post independence-era Indian economy (from 1947 to 1991) was a mixed economy with an inward-looking,
centrally planned, interventionist policies and import-substituting economic model that failed to take advantage of
the post-war expansion of trade and that nationalized many sectors of its economy.[20] India's share of global trade
fell from 1.3% in 1953 to 0.5% in 1983.[21] This model contributed to widespread inefficiencies and corruption, and
it was poorly implemented.[22]
After a fiscal crisis in 1991, India has increasingly adopted free-market principles and liberalised its economy to
international trade. These reforms were started by former Finance minister Manmohan Singh under the Prime
Ministership of P.V.Narasimha Rao. They eliminated much of Licence Raj, a pre- and post-British era mechanism of
strict government controls on setting up new industry. Following these economic reforms, and a strong focus on
developing national infrastructure such as the Golden Quadrilateral project by former Prime Minister Atal Bihari
Vajpayee, the country's economic growth progressed at a rapid pace, with relatively large increases in per-capita
incomes. The south western state of Maharashtra contributes the highest towards India's GDP among all states, while
Bihar is among its poorest states in terms of GNI per capita. Mumbai is known as the trade and financial capital of
India.

Overview
The combination of protectionist, import-substitution, and Fabian socialism, social democratic-inspired policies
governed India for sometime after the end of British occupation. The economy was then characterised by extensive
regulation, protectionism, public ownership of large monopolies, pervasive corruption and slow growth.[23] Since
1991, continuing economic liberalisation has moved the country towards a market-based economy. By 2008, India
had established itself as one of the world's faster-growing economies. Growth significantly slowed to 6.8% in
200809, but subsequently recovered to 7.4% in 200910, while the fiscal deficit rose from 5.9% to a high 6.5%
during the same period.[24] India's current account deficit surged to 4.1% of GDP during Q2 FY11 against 3.2% the
previous quarter. The unemployment rate for 201213, according to Government of India's Labour Bureau, was
4.7% nationwide, by UPS method; and 3% by NSSO method. India's consumer price inflation has ranged between
8.9 to 12% over the 2009-2013 period.[25]

History
Main articles: Economic history of India and Timeline of the economy of India

Pre-colonial period (up to 1773)

The citizens of the Indus Valley civilisation, a permanent settlement that flourished between 2800BC and 1800BC,
practiced agriculture, domesticated animals, used uniform weights and measures, made tools and weapons, and
traded with other cities. Evidence of well-planned streets, a drainage system and water supply reveals their
knowledge of urban planning, which included the world's first urban sanitation systems and the existence of a form
of municipal government.

Economy of India

Maritime trade was carried out extensively between South India and
southeast and West Asia from early times until around the fourteenth
century AD. Both the Malabar and Coromandel Coasts were the sites
of important trading centres from as early as the first century BC, used
for import and export as well as transit points between the
Mediterranean region and southeast Asia. Over time, traders organised
themselves into associations which received state patronage.
Raychaudhuri and Habib claim this state patronage for overseas trade
came to an end by the thirteenth century AD, when it was largely taken
over by the local Parsi, Jewish and Muslim communities, initially on
the Malabar and subsequently on the Coromandel coast.

The spice trade between India and Europe was

the main catalyst for the Age of Discovery.

Other scholars suggest trading from India to West Asia and Eastern Europe was
active between 14th and 18th century. During this period, Indian traders had
settled in Surakhani, a suburb of greater Baku, Azerbaijan. These traders had
built a Hindu temple, now preserved by the government of Azerbaijan. French
Jesuit Villotte, who lived in Azerbaijan in late 1600s, wrote this Indian temple
was revered by Hindus; the temple has numerous carvings in Sanskrit or Punjabi,
dated to be between 1500 and 1745AD. The Atashgah temple built by the
Baku-resident traders from India suggests commerce was active and prosperous
for Indians by the 17th century.
Atashgah is a temple built by Indian
traders before 1745. The temple is
west of Caspian Sea, between West
Asia and Eastern Europe. The
inscription shown is in Sanskrit
(above) and Persian.

Further north, the Saurashtra and Bengal coasts played an important role in
maritime trade, and the Gangetic plains and the Indus valley housed several
centres of river-borne commerce. Most overland trade was carried out via the
Khyber Pass connecting the Punjab region with Afghanistan and onward to the
Middle East and Central Asia. Although many kingdoms and rulers issued coins,
barter was prevalent. Villages paid a portion of their agricultural produce as
revenue to the rulers, while their craftsmen received a part of the crops at harvest time for their services.

Silver coin of the Maurya Empire, 3rd century BC.

Silver coin of the Gupta dynasty, 5th century AD.

Sean Harkin estimates China and India may have accounted for 60 to 70 percent of world GDP in the 17th century.
Assessment of India's pre-colonial economy is mostly qualitative, owing to the lack of quantitative information. The
Mughal economy functioned on an elaborate system of coined currency, land revenue and trade. Gold, silver and
copper coins were issued by the royal mints which functioned on the basis of free coinage. The political stability and
uniform revenue policy resulting from a centralised administration under the Mughals, coupled with a
well-developed internal trade network, ensured that India, before the arrival of the British, was to a large extent
economically unified, despite having a traditional agrarian economy characterised by a predominance of subsistence
agriculture dependent on primitive technology. After the decline of the Mughals, western, central and parts of south
and north India were integrated and administered by the Maratha Empire. After the loss at the Third Battle of
Panipat, the Maratha Empire disintegrated into several confederate states, and the resulting political instability and
armed conflict severely affected economic life in several parts of the country, although this was compensated for to

Economy of India

some extent by localised prosperity in the new provincial kingdoms. By the end of the eighteenth century, the British
East India Company entered the Indian political theatre and established its dominance over other European powers.
This marked a determinative shift in India's trade, and a less powerful impact on the rest of the economy.

Colonial period (17731947)

There is no doubt that our grievances against the British Empire
had a sound basis. As the painstaking statistical work of the
Cambridge historian Angus Maddison has shown, India's share
of world income collapsed from 22.6% in 1700, almost equal to
Europe's share of 23.3% at that time, to as low as 3.8% in 1952.
Indeed, at the beginning of the 20th century, "the brightest jewel
in the British Crown" was the poorest country in the world in
terms of per capita income.
Manmohan Singh

An aerial view of Calcutta Port taken in 1945.

Company rule in India brought a major change in the taxation and

Calcutta, which was the economic hub of British
India, saw increased industrial activity during
agricultural policies, which tended to promote commercialisation of
World War II.
agriculture with a focus on trade, resulting in decreased production of
food crops, mass impoverishment and destitution of farmers, and in the
short term, led to numerous famines. The economic policies of the British Raj caused a severe decline in the
handicrafts and handloom sectors, due to reduced demand and dipping employment. After the removal of
international restrictions by the Charter of 1813, Indian trade expanded substantially and over the long term showed
an upward trend. The result was a significant transfer of capital from India to England, which, due to the colonial
policies of the British, led to a massive drain of revenue rather than any systematic effort at modernisation of the
domestic economy.
India's colonisation by the British created an
institutional environment that, on paper,
guaranteed property rights among the colonisers,
encouraged free trade, and created a single
currency with fixed exchange rates, standardised
weights and measures and capital markets. It
also established a system of railways and
telegraphs, a civil service that aimed to be free
from political interference, a common-law and
an adversarial legal system. This coincided with
major changes in the world economy
industrialisation, and significant growth in
Estimated per capita GDP of India and United Kingdom from 1700 to 1950,
[26]
production and trade. However, at the end of
inflation adjusted to 1990 US$.
Other estimates suggest a similar
stagnation in India's per capita GDP and income during the colonial era.
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, a largely illiterate and
unskilled labour force, and extremely inadequate infrastructure.
The 1872 census revealed that 91.3% of the population of the region constituting present-day India resided in
villages, and urbanisation generally remained sluggish until the 1920s, due to the lack of industrialisation and
absence of adequate transportation. Subsequently, the policy of discriminating protection (where certain important
industries were given financial protection by the state), coupled with the Second World War, saw the development

Economy of India

and dispersal of industries, encouraging rural-urban migration, and in particular the large port cities of Bombay,
Calcutta and Madras grew rapidly. Despite this, only one-sixth of India's population lived in cities by 1951.
The impact of British occupation on India's economy is a controversial topic. Leaders of the Indian independence
movement and economic historians have blamed colonial occupation for the dismal state of India's economy in its
aftermath and argued that financial strength required for industrial development in Europe was derived from the
wealth taken from colonies in Asia and Africa. At the same time, right-wing historians have countered that India's
low economic performance was due to various sectors being in a state of growth and decline due to changes brought
in by colonialism and a world that was moving towards industrialisation and economic integration.

Pre-liberalisation period (19471991)

Indian economic policy after independence was influenced by the colonial experience, which was seen by Indian
leaders as exploitative, and by those leaders' exposure to British social democracy as well as the planned economy of
the Soviet Union. Domestic policy tended towards protectionism, with a strong emphasis on import substitution
industrialisation, economic interventionism, a large government run public sector, business regulation, and central
planning, while trade and foreign investment policies were relatively liberal. Five-Year Plans of India resembled
central planning in the Soviet Union. Steel, mining, machine tools, telecommunications, insurance, and power plants,
among other industries, were effectively nationalised in the mid-1950s.

Never talk to me about profit, Jeh, it is a dirty

word.

Nehru, India's Fabian Socialism inspired first prime minister to industrialist J.R.D. Tata, when Tata suggested state-owned companies should be
profitable,

Jawaharlal Nehru, the first prime minister of India, along with the statistician Prasanta Chandra Mahalanobis,
formulated and oversaw economic policy during the initial years of the country's independence. They expected
favourable outcomes from their strategy, involving the rapid development of heavy industry by both public and
private sectors, and based on direct and indirect state intervention, rather than the more extreme Soviet-style central
command system. The policy of concentrating simultaneously on capital- and technology-intensive heavy industry
and subsidising manual, low-skill cottage industries was criticised by economist Milton Friedman, who thought it
would waste capital and labour, and retard the development of small manufacturers. The rate of growth of the Indian
economy in the first three decades after independence was derisively referred to as the Hindu rate of growth by
economists, because of the unfavourable comparison with growth rates in other Asian countries.
(In the current Indian regulatory system, ) I cannot decide how much to borrow, what shares to issue, at what price, what wages and bonus to
pay, and what dividend to give. I even need the government's permission for the salary I pay to a senior executive.

J. R. D. Tata in 1969,

Since 1965, the use of high-yielding varieties of seeds, increased fertilisers and improved irrigation facilities
collectively contributed to the Green Revolution in India, which improved the condition of agriculture by increasing
crop productivity, improving crop patterns and strengthening forward and backward linkages between agriculture
and industry. However, it has also been criticised as an unsustainable effort, resulting in the growth of capitalistic
farming, ignoring institutional reforms and widening income disparities.
Subsequently the Emergency and Garibi Hatao concept under which income tax levels at one point rose to a
maximum of 97.5%, a record in the world for non-communist economies, started diluting the earlier efforts.

Economy of India

Post-liberalisation period (since 1991)

Main articles: Economic liberalisation in India and Economic development in India
In the late 1970s, the government led by
Morarji Desai eased restrictions on capacity
expansion for incumbent companies,
removed price controls, reduced corporate
taxes and promoted the creation of small
scale industries in large numbers. However,
the subsequent government policy of Fabian
socialism hampered the benefits of the
economy, leading to high fiscal deficits and
a worsening current account. The collapse
of the Soviet Union, which was India's
major trading partner, and the Gulf War,
GDP of India has risen rapidly since 1991.
which caused a spike in oil prices, resulted
in a major balance-of-payments crisis for
India, which found itself facing the prospect of defaulting on its loans. India asked for a $1.8billion bailout loan
from the International Monetary Fund (IMF), which in return demanded de-regulation.[27]
In response, Prime Minister Narasimha Rao, along with his finance minister Manmohan Singh, initiated the
economic liberalisation of 1991. The reforms did away with the Licence Raj, reduced tariffs and interest rates and
ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors.[28] Since
then, the overall thrust of liberalisation has remained the same, although no government has tried to take on powerful
lobbies such as trade unions and farmers, on contentious issues such as reforming labour laws and reducing
agricultural subsidies. By the turn of the 21st century, India had progressed towards a free-market economy, with a
substantial reduction in state control of the economy and increased financial liberalisation. This has been
accompanied by increases in life expectancy, literacy rates and food security, although urban residents have
benefited more than agricultural residents.[29]
While the credit rating of India was hit by its nuclear weapons tests in 1998, it has since been raised to investment
level in 2003 by S&P and Moody's. India enjoyed high growth rates for a period from 2003 to 2007 with growth
averaging 9% during this period.[30] Growth then moderated due to the global financial crisis starting in 2008. In
2003, Goldman Sachs predicted that India's GDP in current prices would overtake France and Italy by 2020,
Germany, UK and Russia by 2025 and Japan by 2035, making it the third largest economy of the world, behind the
US and China. India is often seen by most economists as a rising economic superpower and is believed to play a
major role in the global economy in the 21st century.
Starting in 2012, India entered a period of more anaemic growth, with growth slowing down to 4.4%.[31] Other
economic problems also became apparent: a plunging Indian rupee, a persistent high current account deficit and slow
industrial growth. Hit by the U.S. Federal Reserve's decision to taper quantitative easing, foreign investors had been
rapidly pulling out money from India though this has now reversed with the Stock market at near all time high and
the current account deficit narrowing substantially.
India is ranked at 134 out of 189, overall, in World Bank's 2013 ease of doing business index. However, this score
masks the underlying data: in terms of starting a business, dealing with bureaucratic permits and enforcing contracts,
it is ranked among the 10 worst in the world; while in terms of protecting investors, general operations and other
measures, India ranks very favorably among 189 countries.[32]

Economy of India

Sectors
Historically, India has classified and tracked
its economy and GDP as three sectors agriculture,
industry
and
services.
Agriculture includes crops, horticulture,
milk and animal husbandry, aquaculture,
fishing, sericulture, aviculture, forestry and
related activities. Industry includes various
manufacturing sub-sectors. India's definition
of services sector includes its construction,
retail, software, IT, communications,
hospitality,
infrastructure
operations,
education, health care, banking and
insurance, and many other economic
activities.[34][35]

[33]

Percent labor employment in India by its economic sectors (2010).

Agriculture
Main articles: Agriculture in India, Forestry
in India, Animal husbandry in India, Fishing
in India and Natural resources in India
India ranks second worldwide in farm
output. Agriculture and allied sectors like
forestry, logging and fishing accounted for
17% of the GDP and employed 51% of the
total workforce in 2012. As Indian economy
has diversified and grown, agriculture's
The GDP contribution of various sectors of Indian economy have evolved between
1951 to 2013, as its economy has diversified and developed.
contribution to GDP has steadily declined
from 1951 to 2011, yet it is still the largest
employment source and a significant piece of the overall socio-economic development of India.[36] Crop yield per
unit area of all crops have grown since 1950, due to the special emphasis placed on agriculture in the five-year plans
and steady improvements in irrigation, technology, application of modern agricultural practices and provision of
agricultural credit and subsidies since the Green Revolution in India. However, international comparisons reveal the
average yield in India is generally 30% to 50% of the highest average yield in the world. Indian states Uttar Pradesh,
Punjab, Haryana, Madhya Pradesh, Andhra Pradesh, Bihar, West Bengal, Gujarat and Maharashtra are key
agricultural contributing states of India.
India receives an average annual rainfall of 1,208 millimetres (47.6in) and a total annual precipitation of
4000billion cubic metres, with the total utilisable water resources, including surface and groundwater, amounting to
1123billion cubic metres. 546,820 square kilometres (211,130sqmi) of the land area, or about 39% of the total
cultivated area, is irrigated. India's inland water resources including rivers, canals, ponds and lakes and marine
resources comprising the east and west coasts of the Indian ocean and other gulfs and bays provide employment to
nearly six million people in the fisheries sector. In 2008, India had the world's third largest fishing industry.
India is the largest producer in the world of milk, jute and pulses, and also has the world's second largest cattle
population with 175million animals in 2008. It is the second largest producer of rice, wheat, sugarcane, cotton and
groundnuts, as well as the second largest fruit and vegetable producer, accounting for 10.9% and 8.6% of the world
fruit and vegetable production respectively. India is also the second largest producer and the largest consumer of silk

Economy of India
in the world, producing 77,000tons in 2005.
India exports several agriculture products, such as Basmati rice, wheat, cereals, spices, fresh fruits, dry fruits, buffalo
beef meat, cotton, tea, coffee and other cash crops particularly to the Middle East, Southeast and East Asian
countries. It earns about 10 percent of its export earnings from this trade.

Industry
Industry accounts for 26% of GDP and employs 22% of the total workforce. According to the World Bank, India's
industrial manufacturing GDP output in 2012 was 10th largest in the world on current US dollar basis ($239.5
billion),[37] and 9th largest on inflation adjusted constant 2005 US dollar basis ($197.1 billion).[38] The Indian
industrial sector underwent significant changes as a result of the economic liberalisation in India economic reforms
of 1991, which removed import restrictions, brought in foreign competition, led to the privatisation of certain
government owned public sector industries, liberalised the FDI regime, improved infrastructure and led to an
expansion in the production of fast moving consumer goods.[39] Post-liberalisation, the Indian private sector was
faced with increasing domestic as well as foreign competition, including the threat of cheaper Chinese imports. It has
since handled the change by squeezing costs, revamping management, and relying on cheap labour and new
technology. However, this has also reduced employment generation even by smaller manufacturers who earlier
relied on relatively labour-intensive processes.
Petroleum products and chemicals
Petroleum products and chemicals are a major contributor to India's industrial GDP, and together they contribute
over 34% of its export earnings. India hosts many oil refinery and petrochemical operations, including the world's
largest refinery complex in Jamnagar that processes 1.24 million barrels of crude per day.[40] By volume, Indian
chemical industry was the third largest producer in Asia, and it alone contributed 5% of its GDP. India is one of the
top 5 world producers of agrochemicals, polymers and plastics, dyes and various organic and inorganic
chemicals.[41] Despite being a large producer and exporter of chemicals, India is a net importer of chemicals given
its domestic demand for products.[42]
Pharmaceuticals
The Indian pharmaceutical industry has grown in recent years to become a major manufacturer of health care
products to the world. India produced about 8 per cent of global pharmaceutical supply in 2011 by value, that
included over 60,000 generic brands of medicines sold around the world.[43] It is one of the fastest-growing
sub-sectors of its industry and significant contributor of India's export earnings. The state of Gujarat has become a
hub for the manufacture and export of pharmaceuticals and APIs.[44] The industry is expected to double from its
2012 levels to US$55 billion by 2020, according to a McKinsey report.[45]
Engineering
Engineering industry of India is the largest sub-sector of its industry GDP and is one of three largest foreign
exchange earning sectors for the country.[46] It includes transport equipment, machine tools, capital goods,
transformers, switchgears, furnaces, cast and forged simple to precision parts for turbines, automobiles and railways.
The industry employs about four million workers. On value added basis, India's engineering industry sector exported
$67 billion worth of engineering goods in 2013-14 fiscal year, as well served part of the domestic demand for
engineering goods.[47]
The engineering industry of India includes its growing car, motorcycle and scooters industry, as well as productivity
machinery such as tractors. India manufactured and assembled about 18 million passenger and utility vehicles in
2011, of which 2.3 million were exported. India is the world's largest producer of and the largest market for tractors,
accounting for 29% of world's tractor production in 2013.[][48] India is the 12th largest producer and 7th largest
consumer of machine tools in the world.

Economy of India

10

Gems and jewelry

Gems and jewelry industry is an ancient and

continuing major sub-sectors of Indian economy.
Many famous stones such as the Koh-i-noor and
Hope Diamond (above), now at the Smithsonian,
[49][50]
came from India.

India is one of the world's largest diamonds and gem polishing and
jewelry manufacturing center; it is also one of the two largest
consumers of gold.[51][52] After crude oil and petroleum products, the
export and import of gold, precious metals, precious stones, gems and
jewelry accounts for the largest portion of India's global trade. The
industry contributes about 7% of India's GDP, employs millions, and is
a major source of its foreign exchange earnings.[53] The gems and
jewellery industry, in 2013, created 251000 crore (US$42billion) in
economic output on value added basis. It is growing sector of Indian
economy, and A.T. Kearney projects it to grow to 500000 crore
(US$83billion) by 2018.[54]

The gems and jewelry industry has been an ancient art and continuous
economic activity in India, traced over several thousand years.[55] Till
18th century, India was the world's only known major reliable source
of diamond mining and its processing. Now, South Africa and Australia are the major sources of diamonds and
precious metals, but along with Antwerp, New York, and Ramat Gan, Indian cities such as Surat and Mumbai are the
hubs of world's jewelry polishing, cutting, precision finishing, supply and trade. Unlike other centers, the gems and
jewelry economic activity in India is primarily artisans driven, is manual, the sector is highly fragmented, and 96%
of the industry is served by family owned operations.
Indian gem and jewelry economy's particular strength is in precision cutting, polishing and processing small
diamonds (below one carat). Yet, India is also a hub for processing of larger diamonds, pearls and other precious
stones. About 11 out of 12 diamonds set in any jewellery in the world are cut and polished in India.[56] It is also a
major hub of gold and other precious metal-based precision jewelry industry. Its domestic demand for gold and
jewelry products is another driver of India's GDP.
Textile
Textile industry contributes about 4 per cent to the countrys GDP, 14 per cent of the industrial production, and 17
per cent to export earnings. India's textile industry has transformed from a declining sector to a rapidly developing
one in recent years. After freeing the industry in 20042005 from a number of limitations, primarily financial, the
government gave a green light to massive investment inflows both domestic and foreign. During the period from
2004 to 2008, total investment into textile sector increased by 27billion dollars. Ludhiana produces 90% of woollens
in India and is known as the Manchester of India. Tirupur has gained universal recognition as the leading source of
hosiery, knitted garments, casual wear and sportswear. Expanding textile centers such as Ichalkaranji enjoy one of
the highest per capita incomes in the country. India's cotton farms, fiber and textile industry provides employment to
45million people in India, including some child labour (1%). The sector is estimated to employ around 400,000
children under the age of 18.
Mining
Main article: Mining in India
India's mining industry was the 4th largest producer of minerals in the world by volume, and 8th largest producer by
value in 2009.[57] In 2013, it mined and processed 89 minerals, of which 4 were fuel, 3 were atomic energy minerals,
and 80 non-fuel.[58] The government owned public sector accounted for 68% of mineral produced by volume, in
2011-12.
Nearly 50% of India's mining industry, by output value, is concentrated in eight states - Odisha, Rajasthan,
Chhattisgarh, Andhra Pradesh, Telangana, Jharkhand, Madhya Pradesh and Karnataka. Another 25% of the output

Economy of India
by value comes from its offshore oil and gas resources.[] India operated about 3,000 mines in 2010, half of which
were coal, limestone and iron ore.[59] On output value basis, India's was one of five largest producers of mica,
chromite, coal, lignite, iron ore, bauxite, barites, zinc, manganese; while being one of the 10 largest global producers
of many other minerals. India was fourth largest producer of steel in the world in 2013,[60] and seventh largest
producer of aluminum.[61]
India's mineral resources are vast.[62] However, its mining industry has declined - contributing 2.3% of its GDP in
2010 compared to 3% in 2000, and employed 2.9 million people - a decreasing percentage of its total labor. India is a
net importer of many minerals including coal. India's mining sector decline is because of complex permit, regulatory
and administrative procedures that take 6 to 20 fold more time than other mining countries such as Australia and
South Africa, inadequate infrastructure, shortage of capital resources, and slow adoption of ecologically and
environmentally sustainable technologies.[63]

Services
Further information: Information technology in India and Business process outsourcing in India
India's services sector has the largest share in the GDP, accounting for 57% in 2012, up from 15% in 1950. It is the
12th largest in the world by nominal GDP, and fourth largest when purchasing power is taken into account. The
services sector provides employment to 27% of the work force. Information technology and business process
outsourcing are among the fastest-growing sectors, having a cumulative growth rate of revenue 33.6% between 1997
and 1998 and 200203 and contributing to 25% of the country's total exports in 200708. The growth in the IT
sector is attributed to increased specialisation, and an availability of a large pool of low cost, highly skilled, educated
and fluent English-speaking workers, on the supply side, matched on the demand side by increased demand from
foreign consumers interested in India's service exports, or those looking to outsource their operations. The share of
the Indian IT industry in the country's GDP increased from 4.8% in 200506 to 7% in 2008. In 2009, seven Indian
firms were listed among the top 15 technology outsourcing companies in the world.
Energy and power
Main article: Electricity sector in India
As of 2009, India is the fourth largest producer of electricity and oil
products and the fourth largest importer of coal and crude-oil in the
world. Coal and oil together account for 66% of the energy
consumption of India.
India's oil reserves meet 25% of the country's domestic oil demand. As
of 2012, India's total proven oil reserves of 5.5million barrels
(870million litres), while gas reserves stood at 43,800million cubic
feet (1,240million cubic metres). Oil and natural gas fields are located
As of 2010, India imported about 70% of its
offshore at Mumbai High, Krishna Godavari Basin and the Cauvery
crude oil requirements. Shown here is an ONGC
platform at Mumbai High in the Arabian Sea, one
Delta, and onshore mainly in the states of Assam, Gujarat and
of the sites of domestic production.
Rajasthan. India is the fourth largest consumer of oil in the world and
imported 726386 crore (US$120billion) worth of oil in 2011-12,
which had an adverse effect on its current account deficit. The petroleum industry in India mostly consists of public
sector companies such as Oil and Natural Gas Corporation (ONGC), Hindustan Petroleum Corporation Limited
(HPCL), Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL). There are
some major private Indian companies in the oil sector such as Reliance Industries Limited (RIL) which operates the
world's largest oil refining complex.
As of December 2011, India had an installed power generation capacity of 233.929 GW as of December 2013, of
which thermal power contributed 68.31%, hydroelectricity 17.05%, other sources of renewable energy 12.59%, and

11

Economy of India
nuclear power 2.04%. India meets most of its domestic energy demand through its 106billion tonnes of coal
reserves. India is also rich in certain alternative sources of energy with significant future potential such as solar, wind
and biofuels (jatropha, sugarcane). India's dwindling uranium reserves stagnated the growth of nuclear energy in the
country for many years. Recent discoveries of natural uranium in Tummalapalle belt, which promises to be one of
the top 20 of the world's reserves, and an estimated reserve of 846,477 metric tons (933,081 short tons) of thorium
about 25% of world's reserves are expected to fuel the country's ambitious nuclear energy program in the long-run.
The Indo-US nuclear deal has also paved the way for India to import uranium from other countries.
Infrastructure
Main articles: Indian road network, Indian Railways, Ports in India and Transport in India
India's infrastructure and transport sector contributes about 5% of its GDP. India has the world's second largest road
network in quantitative terms, covering more than 4.3million kilometers. Qualitatively, India's roads are a mix of
modern highways and narrow, unpaved roads. India also has the lowest kilometer lane road density per 100,000
people among G-27 countries - leading to traffic congestion. It is upgrading its infrastructure. As of May 2014, India
had completed and placed in use over 22,600 kilometres of recently built 4 or 6-lane highways connecting most of its
major manufacturing, commercial and cultural centers. India's road infrastructure carries 60% of freight and 87% of
passenger traffic.
Indian Railways is the fourth largest rail network in the world, with a track length of 114,500kilometers and 7,172
stations. This government owned and operated railway network carried an average of 23 million passengers a day,
and over a billion tonnes of freight a year.[64] India has a coastline of 7,500 kilometers with 13 major ports and 60
operational non-major ports, which together handle 95% of the countrys external trade by volume and 70% by value
(rest handled by air).[65] Nhava Sheva, Mumbai is the largest public port, while Mundra is the largest private sea
port.[66] The airport infrastructure of India includes 125 airports,[67] of which 66 airports are licensed to handle both
passengers and logistics.[68]
About 74 people out of 100 have land or wireless telephones in India, or about 927million telephone subscribers,
two-thirds of them in urban areas. Internet use has been growing rapidly in India, with an estimated 243 million users
in June 2014. This is projected to grow to 330370 million users by 2016.[69]
Retail
Main article: Retailing in India
Retail industry contributes between 1415% to 20% of India's GDP.[70] The Indian retail market is estimated to be
US$450 billion and one of the top five retail markets in the world by economic value. India is one of the
fastest-growing retail market in the world, and is projected to reach $1.3 trillion by 2020.[71]
India's retailing industry mostly consists of the local mom and pop store, owner manned shops and street vendors.
Organised retail supermarkets are growing but small, with a market share of 4% as of 2008. In 2012 government
permitted 51% FDI in multi brand retail and 100% FDI in single brand retail. However, a lack of back end
warehouse retail infrastructure, as well as state level permits and red tape continues to limit organized retail's growth
in Indian economy.[72] Over thirty regulations such as "signboard licences" and "anti-hoarding measures" have to be
complied before a store can open doors. There are taxes for moving goods from state to state, and even within states.
The lack of infrastructure and efficient retail network, according to The Wall Street Journal, causes a third of India's
agriculture produce to be lost from spoilage.[73]

12

Economy of India
Tourism
Main articles: Tourism in India and Medical tourism in India
International and domestic tourism industry contributes more to India's GDP than its textile sector. India attracted
6.85 million international tourist arrivals and $18.4 billion in foreign exchange earnings from tourism receipts in
2013.[74] Tourism to India has seen a steady growth, year on year, from 4.45 million arrivals in 2006 to nearly 7
million arrivals in 2013. The United States is the largest source of international tourists to India, while European
Union nations and Japan are other major sources of international tourists.[75][76] Less than 10% of international
tourists visit the Taj Mahal, with majority visiting other cultural, thematic and holiday circuits.[77] Over 12 million
Indian citizens take international trips each year for tourism, while domestic tourism within India adds about 740
million Indian travelers. The combined international and domestic tourism contributed 5.92% of India's GDP, and
9.3% to its employment in 2011.[78] India has a fast-growing medical tourism sector of its health care economy
offering low cost health and long term care.[79]
Banking and finance
Main article: Finance in India
See also: Banking in India and Insurance in India
The Indian money market is classified into the organised sector, comprising private, public and foreign owned
commercial banks and cooperative banks, together known as scheduled banks, and the unorganised sector, which
includes individual or family owned indigenous bankers or money lenders and non-banking financial companies.
The unorganised sector and microcredit are still preferred over traditional banks in rural and sub-urban areas,
especially for non-productive purposes, like ceremonies and short duration loans.
Prime Minister Indira Gandhi nationalised 14 banks in 1969, followed by six others in 1980, and made it mandatory
for banks to provide 40% of their net credit to priority sectors like agriculture, small-scale industry, retail trade, small
businesses, etc. to ensure that the banks fulfill their social and developmental goals. Since then, the number of bank
branches has increased from 8,260 in 1969 to 72,170 in 2007 and the population covered by a branch decreased from
63,800 to 15,000 during the same period. The total bank deposits increased from 59.1 billion (US$980million) in
197071 to 38309.22 billion (US$640billion) in 200809. Despite an increase of rural branches, from 1,860 or
22% of the total number of branches in 1969 to 30,590 or 42% in 2007, only 32,270 out of 500,000 villages are
covered by a scheduled bank.
India's gross domestic saving in 200607 as a percentage of GDP stood at a high 32.8%. More than half of personal
savings are invested in physical assets such as land, houses, cattle, and gold. The government owned 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.

13

Economy of India

External trade and investment

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

Global trade relations

Until the liberalisation of 1991, India
was largely and intentionally isolated
from the world markets, to protect its
economy and to achieve self-reliance.
Foreign trade was subject to import
tariffs, export taxes and quantitative
restrictions, while foreign direct
investment (FDI) was restricted by
upper-limit
equity
participation,
restrictions on technology transfer,
A map showing the global distribution of Indian exports in 2006 as a percentage of the
top market (USA $20.9 billion).
export obligations and government
approvals; these approvals were
needed for nearly 60% of new FDI in the industrial sector. The restrictions ensured that FDI averaged only around
$200million annually between 1985 and 1991; a large percentage of the capital flows consisted of foreign aid,
commercial borrowing and deposits of non-resident Indians. India's exports were stagnant for the first 15years after
independence, due to general neglect of trade policy by the government of that period. Imports in the same period,
due to industrialisation being nascent, consisted predominantly of machinery, raw materials and consumer goods.

India's exports (top) and imports, by value, in 2013-2014.

14

Economy of India
Since liberalisation, the value of India's international trade has increased sharply, with the contribution of total trade
in goods and services to the GDP rising from 16% in 199091 to 47% in 200810. India accounts for 1.44% of
exports and 2.12% of imports for merchandise trade and 3.34% of exports and 3.31% of imports for commercial
services trade worldwide. India's major trading partners are the European Union, China, the United States of
America and the United Arab Emirates. In 200607, major export commodities included engineering goods,
petroleum products, chemicals and pharmaceuticals, gems and jewellery, textiles and garments, agricultural
products, iron ore and other minerals. Major import commodities included crude oil and related products, machinery,
electronic goods, gold and silver. In November 2010, exports increased 22.3% year-on-year to 850.63 billion
(US$14billion), while imports were up 7.5% at 1251.33 billion (US$21billion). Trade deficit for the same month
dropped from 468.65 billion (US$7.8billion) in 2009 to 400.7 billion (US$6.7billion) in 2010.
India is a founding-member of General Agreement on Tariffs and Trade (GATT) since 1947 and its successor, the
WTO. While participating actively in its general council meetings, India has been crucial in voicing the concerns of
the developing world. For instance, India has continued its opposition to the inclusion of such matters as labour and
environment issues and other non-tariff barriers to trade into the WTO policies.

Balance of payments
Since independence, India's balance of payments on its current account
has been negative. Since economic liberalisation in the 1990s,
precipitated by a balance of payment crisis, India's exports rose
consistently, covering 80.3% of its imports in 200203, up from 66.2%
in 199091. However, the global economic slump followed by a
general deceleration in world trade saw the exports as a percentage of
Cumulative Current Account Balance 19802008
imports drop to 61.4% in 200809.[80] India's growing oil import bill is
based on IMF data
seen as the main driver behind the large current account deficit, which
rose to $118.7billion, or 11.11% of GDP, in 200809.[81] Between January and October 2010, India imported
$82.1billion worth of crude oil.
Indian economy has run a trade deficit every year over 2002-2012 period, with a merchandise trade deficit of
US$189 billion in 2011-12.[82] Its trade with China has the largest deficit, about $31 billion in 2013.[83]
India's reliance on external assistance and concessional debt has decreased since liberalisation of the economy, and
the debt service ratio decreased from 35.3% in 199091 to 4.4% in 200809.[84] In India, External Commercial
Borrowings (ECBs), or commercial loans from non-resident lenders, are being permitted by the Government for
providing an additional source of funds to Indian corporates. The Ministry of Finance monitors and regulates them
through ECB policy guidelines issued by the Reserve Bank of India under the Foreign Exchange Management Act of
1999. India's foreign exchange reserves have steadily risen from $5.8billion in March 1991 to $318.6billion in
December 2009. [85] In 2012, the United Kingdom announced an end to all financial aid to India, citing the growth
and robustness of Indian economy.[86][87]

Foreign direct investment

See also Foreign direct investment, India section.

15

Economy of India

16
Share of top five investing countries in FDI inflows. (20002010)
Rank

Country

Inflows
Inflows (%)
(million USD)

Mauritius

50,164

42.00

Singapore

11,275

9.00

USA

8,914

7.00

UK

6,158

5.00

Netherlands 4,968

4.00

Into India
As the third-largest economy in the world in PPP terms, India has attracted foreign direct investment; During the
year 2011, FDI inflow into India stood at $36.5billion, 51.1% higher than 2010 figure of $24.15billion. India has
strengths in telecommunication, information technology and other significant areas such as auto components,
chemicals, apparels, pharmaceuticals, and jewellery. Despite a surge in foreign investments, rigid FDI policies were
a significant hindrance. Over time, India has adopted a number of FDI reforms. India has a large pool of skilled
managerial and technical expertise. The size of the middle-class population stands at 300million and represents a
growing consumer market.
India's liberalised its FDI policy in 2005, allowing up to a 100% FDI stake in ventures. Industrial policy reforms
have substantially reduced industrial licensing requirements, removed restrictions on expansion and facilitated easy
access to foreign technology and foreign direct investment FDI. The upward moving growth curve of the real-estate
sector owes some credit to a booming economy and liberalised FDI regime. In March 2005, the government
amended the rules to allow 100% FDI in the construction sector, including built-up infrastructure and construction
development projects comprising housing, commercial premises, hospitals, educational institutions, recreational
facilities, and city- and regional-level infrastructure. Over 2012-14, India extended these reforms to defense,
telecom, oil, retail, aviation and a number of other sectors.[88][89]
During 200010, the country attracted $178billion as FDI. The inordinately high investment from Mauritius is due
to routing of international funds through the country given significant tax advantages; double taxation is avoided due
to a tax treaty between India and Mauritius, and Mauritius is a capital gains tax haven, effectively creating a
zero-taxation FDI channel.
From India
Since 2000, Indian companies have expanded overseas, investing FDI and creating jobs outside India. Over the
2006-2010 period, FDI by Indian companies outside India amounted to 1.34 per cent of its GDP.[90] Indian
companies have deployed FDI and started operations in the United States,[91] while others have expanded in Europe
and Africa.[92] The Indian company Tata is United Kingdom's largest manufacturer and private sector
employer.[93][94]

Economy of India

17

Currency
Main articles: Indian rupee and Reserve Bank of India

The RBI's new headquarters in Mumbai

Year

Rupee per US$

(average annual)

1975 8.4058
1980 7.8800
1985 12.3640
1990 17.4992
1995 32.4198
2000 44.9401
2005 44.1000
2010 45.7393
2013 58.5515

The Indian rupee ( ) is the only legal tender in India, and is also accepted as legal tender in the neighbouring Nepal
and Bhutan, both of which peg their currency to that of the Indian rupee. The rupee is divided into 100 paise. The
highest-denomination banknote is the 1,000 note; the lowest-denomination coin in circulation is the 50 paise coin;
with effect from 30 June 2011 all denominations below 50 paise have ceased to be legal currency. India's monetary
system is managed by the Reserve Bank of India (RBI), the country's central bank. Established on 1 April 1935 and
nationalised in 1949, the RBI serves as the nation's monetary authority, regulator and supervisor of the monetary
system, banker to the government, custodian of foreign exchange reserves, and as an issuer of currency. It is
governed by a central board of directors, headed by a governor who is appointed by the Government of India.
The rupee was linked to the British pound from 1927 to 1946 and then the U.S. dollar till 1975 through a fixed
exchange rate. It was devalued in September 1975 and the system of fixed par rate was replaced with a basket of four
major international currencies the British pound, the U.S. dollar, the Japanese yen and the Deutsche mark. In 1991,
after the collapse of its largest trading partner Soviet Union, India faced the major foreign exchange crisis and the
rupee was devalued by around 19% in two stages on 1 and 2 July. In 1992 a Liberalized Exchange Rate Mechanism
LERMS- was introduced. Under LERMS exporters had to surrender 40 percent of their foreign exchange earnings
to the RBI at the RBI determined exchange rate. The balance 60% was allowed to be converted at the market
determined exchange rate. In 1994 the rupee was convertible on the current account, with some capital controls.

Economy of India

18

Reserve Bank of India intervenes in the foreign exchange market to curb excessive volatility.Wikipedia:Citation
needed
After the sharp devaluation in 1991 and transition to current account convertibility in 1994, the value of the rupee is
largely determined by the market forces. The rupee has been fairly stable during the decade 2000 to 2010. In
September 2013, the rupee touched an all time low 68.27 to the U.S. dollar.[95]

Income and consumption

Main article: Income in India
India's gross national income per capita had
experienced high growth rates since 2002.
India's Per Capita Income has tripled from Rs.
19,040 in 200203 to Rs. 53,331 in 201011,
averaging 13.7% growth over these eight years
peaking 15.6% in 201011. However growth in
the inflation adjusted Per capita income of the
nation slowed to 5.6% in 201011, down from
6.4% in the previous year. These consumption
levels are on an individual basis, not household.
On a household basis, the average income in
India was $6,671 per household in 2011.[97]

Gini Index of India compared to other countries per World Bank data tables
[96]
as of 2014.

Per 2011 census, India has about 330million houses and 247million households. The household size in India has
dropped in recent years, with 2011 census reporting 50% of households have 4 or less members. The average per
2011 census was 4.8 members per household, and included surviving grandparents. These households produced a
GDP of about $1.7Trillion. The household consumption patterns per 2011 census: approximately 67% of
households use firewood, crop residue or cow dung cakes for cooking purposes; 53% do not have sanitation or
drainage facilities on premises; 83% have water supply within their premises or 100metres from their house in urban
areas and 500metres from the house in rural areas; 67% of the households have access to electricity; 63% of
households have landline or mobile telephone connection; 43% have a television; 26% have either a two wheel
(motorcycle) or four wheel (car) vehicle. Compared to 2001, these income and consumption trends represent
moderate to significant improvements. One report in 2010 claimed that the number of high income households has
crossed lower income households.
Poverty
Main article: Poverty in India
The World Bank in 2010, using its older 2005
methodology, estimated about 400million
people in India, as compared to 1.29billion
people worldwide, live on less than $1.25 (PPP)
per day. The World Bank reviewed and proposed
revisions in May 2014, to its poverty calculation
methodology and purchasing power parity basis
for measuring poverty worldwide, including
India. According to this revised methodology,
the world had 872.3 million people below the

Per capita gross national income of India in 2013 compared to other

[98]
countries, on Purchasing Power Parity basis, per World Bank data.

new poverty line, of which 179.6 million people lived in India. In other words, India with 17.5% of total world's
population, had 20.6% share of world's poorest in 2013. According to a 2005-2006 survey,[99] India had about 61

Economy of India
million children under the age of 5 who were chronically malnourished. A 2011 UNICEF report stated that that
between 1990 to 2010, India achieved a 45 percent reduction in under age 5 mortality rates, and now ranks 46 in 188
countries on this metric.
Since the early 1950s, successive governments have implemented various schemes to alleviate poverty, under central
planning, that have met with partial success. In 2005, Indian government enacted the Mahatma Gandhi National
Rural Employment Guarantee Act, guaranteeing 100days of minimum wage employment to every rural household
in all the districts of India. In 2011, this Rural Employment Guarantee programme was widely criticised as no more
effective than other poverty reduction programs in India. Despite its best intentions, MGNREGA is beset with
controversy about corrupt officials, deficit financing as the source of funds, poor quality of infrastructure built under
this program, and unintended destructive effect on poverty. Other studies suggest that the Rural Employment
Guarantee welfare program has helped in reducing rural poverty in some cases.[100][101] Yet other studies report that
India's economic growth has been the driver of sustainable employment and poverty reduction, but a sizable
population remains in poverty.[102][103]

Employment
See also: Labour in India, Indian labour law and Child labour in India
Agricultural and allied sectors accounted for about 52.1% of the total workforce in 200910. While agriculture
employment has fallen over time in percentage of labor employed, services which includes construction and
infrastructure have seen a steady growth accounting for 20.3% of employment in 2012-13. Of the total workforce,
7% is in the organised sector, two-thirds of which are in the government controlled public sector. About 51.2% of
the labor in India is self-employed. According to 2005-06 survey, there is a gender gap in employment and salaries.
In rural areas, both men and women are primarily self-employed, mostly in agriculture. In urban areas, salaried work
was the largest source of employment for both men and women in 2006.[104]
Unemployment in India is characterised by chronic (disguised) unemployment. Government schemes that target
eradication of both poverty and unemployment (which in recent decades has sent millions of poor and unskilled
people into urban areas in search of livelihoods) attempt to solve the problem, by providing financial assistance for
setting up businesses, skill honing, setting up public sector enterprises, reservations in governments, etc. The decline
in organised employment due to the decreased role of the public sector after liberalisation has further underlined the
need for focusing on better education and has also put political pressure on further reforms.[105] India's labour
regulations are heavy even by developing country standards and analysts have urged the government to abolish or
modify them in order to make the environment more conducive for employment generation. The 11th five-year plan
has also identified the need for a congenial environment to be created for employment generation, by reducing the
number of permissions and other bureaucratic clearances required. Further, inequalities and inadequacies in the
education system have been identified as an obstacle preventing the benefits of increased employment opportunities
from reaching all sectors of society.
Child labour in India is a complex problem that is basically rooted in poverty. The Indian government has
implemented, since the 1990s, a variety of programs to eliminate child labor. These have included setting up schools,
launching free school lunch program, setting up special investigation cells and others. Desai et al. state that recent
studies on child labour in India have found some pockets of industries in which children are employed, but overall,
relatively few Indian children are employed. Child labor below the age of 10 is now rare. In the 10-14 group, the
latest surveys find only 2% of children working for wage, while another 9% work within their home or rural farms
assisting their parents in times of high work demand such as sowing and harvesting of crops.[106]
India has the second largest diaspora around the world, an estimated 25 million people,[107] many of whom work
overseas and remit funds back to their families. The Middle East region is the largest source of employment of expat
Indians. The crude oil production and infrastructure industry of Saudi Arabia employs over 2 million expat Indians.
Cities such as Dubai and Abu Dhabi in United Arab Emirates alone have employed another 2 million Indian

19

Economy of India

20

construction workers during its construction boom in recent decades.[108] In 200910, remittances from Indian
migrants overseas stood at 2500 billion (US$42billion), the highest in the world, but their share in FDI remained
low at around 1%.

Economic trends and issues

With 1.2 billion people and the worlds fourth-largest economy,
Indias recent growth and development has been one of the most
significant achievements of our times. Over the six and half
decades since independence, the country has brought about a
landmark agricultural revolution that has transformed the nation
from chronic dependence on grain imports into a global
agricultural powerhouse that is now a net exporter of food. Life
expectancy has more than doubled, literacy rates have
Commercial office buildings in Gurgaon.
quadrupled, health conditions have improved. India will soon
have the largest and youngest workforce the world has ever seen.
At the same time, the country is in the midst of a massive wave of urbanization as some 10 million people
move to towns and cities each year in search of jobs and opportunity. It is the largest rural-urban migration of
this century. Massive investments will be needed to create the jobs, housing, and infrastructure to meet soaring
aspirations and make towns and cities more livable and green.
World Bank: "India Country Overview 2013"

Agriculture
Main article: Agriculture in India
Agriculture is an important part of Indian economy. In 2008, a New York Times article claimed, with the right
technology and policies, India could contribute to feeding not just itself but the world. However, agricultural output
of India lags far behind its potential. The low productivity in India is a result of several factors. According to the
World Bank, India's large agricultural subsidies are distorting what farmers grow and they are hampering
productivity-enhancing investment. While overregulation of agriculture has increased costs, price risks and
uncertainty, governmental intervention in labour, land, and credit markets are hurting the market. Infrastructure such
as rural roads, electricity, ports, food storage, retail markets and services are inadequate. Further, the average size of
land holdings is very small, with 70% of holdings being less than one hectare in size. Irrigation facilities are
inadequate, as revealed by the fact that only 39% of the total cultivable land was irrigated as of 2010, resulting in
farmers still being dependent on rainfall, specifically the monsoon season, which is often inconsistent and unevenly
distributed across the country. Farmer incomes are low also in part because of lack of food storage and distribution
infrastructure. A third of India's agriculture produce is lost from spoilage.

Economy of India

21

Corruption
Main article: Corruption in India
Corruption has been one of the pervasive problems
affecting India. A 2005 study by Transparency
International (TI) 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
in the previous year. A follow-on 2008 TI study found
this rate to be 40 percent. In 2011, Transparency
International ranked India at 95th place amongst 183
countries in perceived levels of public sector
corruption.

Perception of corruption index for India compared to other countries,

2010.

In 1996, red tape, bureaucracy and the Licence Raj were suggested as a cause for the institutionalised corruption and
inefficiency. More recent reports suggest the causes of corruption in India include excessive regulations and
approval requirements, mandated spending programs, monopoly of certain goods and service providers by
government controlled institutions, bureaucracy with discretionary powers, and lack of transparent laws and
processes.
The Right to Information Act (2005) which requires government officials to furnish information requested by
citizens or face punitive action, computerisation of services, and various central and state government acts that
established vigilance commissions, have considerably reduced corruption and opened up avenues to redress
grievances.
In 2011, the Indian government concluded that most spending fails to reach its intended recipients. A large,
cumbersome and tumor-like bureaucracy sponges up or siphons off spending budgets. India's absence rates are one
of the worst in the world; one study found that 25% of public sector teachers and 40% of government owned public
sector medical workers could not be found at the workplace. Similarly, there are many issues facing Indian scientists,
with demands for transparency, a meritocratic system, and an overhaul of the bureaucratic agencies that oversee
science and technology.
The Indian economy has an underground economy, with a 2006 report alleging that the Swiss Bankers Association
suggested India topped the worldwide list for black money with almost $1,456billion stashed in Swiss banks. This
amounts to 13 times the country's total external debt. These allegations have been denied by Swiss Banking
Association. James Nason, the Head of International Communications for Swiss Banking Association, suggests "The
(black money) figures were rapidly picked up in the Indian media and in Indian opposition circles, and circulated as
gospel truth. However, this story was a complete fabrication. The Swiss Bankers Association never published such a
report. Anyone claiming to have such figures (for India) should be forced to identify their source and explain the
methodology used to produce them."

Education
Main article: Education in India
India has made huge progress in terms of increasing primary education attendance rate and expanding literacy to
approximately three-fourths of the population. India's literacy rate had grown from 52.2% in 1991 to 74.04% in
2011. The right to education at elementary level has been made one of the fundamental rights under the eighty-sixth
Amendment of 2002, and legislation has been enacted to further the objective of providing free education to all
children.[109] However, the literacy rate of 74% is still lower than the worldwide average and the country suffers
from a high dropout rate. Further, the literacy rates and educational opportunities vary by region, gender, urban and
rural areas, and among different social groups.[110]

Economy of India

22

Economic disparities
Main articles: Economic disparities in India and Poverty in India
Poverty rates in Indias poorest states are three
to four times higher than those in the more
advanced states. While Indias average annual
per capita income was $1,410 in 2011
placing it among the poorest of the worlds
middle-income countries it was just $436 in
Uttar Pradesh (which has more people than
Brazil) and only $294 in Bihar, one of Indias
poorest states.
World Bank: India Country Overview 2013
A critical problem facing India's economy is the
sharp and growing regional variations among India's
different states and territories in terms of poverty,
availability of infrastructure and socio-economic
development. Six low-income states Bihar,
Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha
and Uttar Pradesh are home to more than one-third
of India's population. Severe disparities exist among
states in terms of income, literacy rates, life
expectancy and living conditions.

Economic disparities among the States and Union Territories of India,

on GDP per capita, PPP basis in 2011.

The five-year plans, especially in the pre-liberalisation era, attempted to reduce regional disparities by encouraging
industrial development in the interior regions and distributing industries across states, but the results have not been
very encouraging since these measures in fact increased inefficiency and hampered effective industrial growth. After
liberalisation, the more advanced states have been better placed to benefit from them, with well-developed
infrastructure and an educated and skilled workforce, which attract the manufacturing and service sectors. The
governments of backward regions are trying to reduce disparities by offering tax holidays and cheap land, and
focusing more on sectors like tourism which, although being geographically and historically determined, can become
a source of growth and develops faster than other sectors. India's income Gini coefficient is 33.9, according to The
World Bank, indicating overall income distribution to be more uniform than East Asia, Latin America and Africa
that have higher Gini coefficients.
There is a continuing debate on whether India's economic expansion has been pro-poor or anti-poor.[111] Studies
suggest that the economic growth has been pro-poor and has reduced poverty in India.[112]

Insurance
Life Insurance
There are 23 private-sector firms providing life insurance, who have commenced operations over the period
200010. The industry which reported in annual growth rate of 19.8% during the period 199697 to 200001 has,
post opening up the sector reported in an annual growth rate of 23.4% during 200102 to
201011.Wikipedia:Citation needed There has been an average growth of 34% in the first premium in the insurance
sector between 2001 and 2002 and 201011. The life insurers underwrote new business of Rs 1,26,381crore during
financial year 201011 as against Rs 1,09,894crore during the year 200910, recording a growth of 15%. Of the
new business premium underwritten, LIC accounted Rs 87012.65crore (68.9% market share). The market share of
these insurers was 65.1% and 34.9% respectively in the corresponding period 200910.Wikipedia:Citation needed

Economy of India
Other Insurance
The industry which reported a growth rate of around 10 percent during the period 199697 to 200010 has, post
opening up the sector, reported average annual growth of 15.85% over the period 200102 to
201011.Wikipedia:Citation needed In addition, the specialized insurers Export Credit Guarantee Corporation and
Agriculture Insurance Company (AIC) are offering credit guarantee and corp insurance respectively. AIC, which has
initially offering coverage under the National Agriculture Insurance Company (NAIS), has now started providing
crop insurance cover on commercial line as well.Wikipedia:Citation needed It has introduced several innovative
products such as weather insurance and specific crop related products. The premium underwritten by the non life
insurers during 201011 was Rs 42,576crore as against Rs 34,620crore in 200910. The growth was satisfactory,
particularly in the view of the across the broad cuts in the tariff rates. The private insurers underwrote premium of Rs
17,424crore as against rs Rs 13,977crore in 200910. The public sector insurers on the other hand, underwrote a
premium of Rs 25,151.8 in 201011 as against Rs 20,643.5crore in 200910, i.e. a growth of 21.8% as against
14.5% in 200910.Wikipedia:Citation needed
Market Penetration
The Indian insurance business has in the past remained under developed with low levels of insurance penetration.
Post liberalization sector has succeeded in raising the levels of insurance penetration from 2.3 (life 1.8 and non life
0.7) in 2000 to 5.1 (life 4.4 and non life 0.7) in 2010.Wikipedia:Citation needed

Security Markets
The development of Indian security markets began with launch of Bombay Stock Exchange (BSE), Mumbai in July
1875 and Ahmedabad Stock exchange in 1894 and 22 other exchange in various cities over the years. In 2014,
India's stock exchange market became the 10th largest in the world by market capitalization, just above those of
South Korea and Australia.[113] India's two major stock exchanges, BSE and National Stock Exchange of India, had
a market capitalization of US$1.4997 trillion and US$1.4722 trillion respectively as of June 2014, according to
World Federation of Exchanges.[114]
The Initial Public Offering (IPO) market in India has been small compared to NYSE and NASDAQ, raising US$300
million in 2013 and US$1.4 billion in 2012. Ernst and Young states[115] that the low IPO activity reflects market
conditions as well as slow government approval process and complex regulations. Before 2013, Indian companies
were not allowed to list their securities internationally without first completing an IPO in India. In 2013, these
security laws were reformed and Indian companies can now choose where they want to list first - overseas,
domestically, or concurrently.[116] Further, security laws have been revised to ease overseas listings of already listed
companies, to increase liquidity for private equity and international investors in Indian companies.

Notes
[1] Agriculture's share in GDP declines to 13.7% in 2012-13 (http:/ / articles. economictimes. indiatimes. com/ 2013-08-30/ news/
41618996_1_gdp-foodgrains-allied-sectors) The Economic Times (30 August 2013)
[2] India's Fiscal Budget 2012-13 (http:/ / indiabudget. nic. in/ es2012-13/ echap-10. pdf) Chapter 10, Government of India (February 2014)
[3] Shawn Donnan, World Bank eyes biggest global poverty line increase in decades (http:/ / www. ft. com/ intl/ cms/ s/ 0/
091808e0-d6da-11e3-b95e-00144feabdc0. html#axzz34f4iVmaC) The Financial Times (9 May 2014)

Chandy and Kharas, What Do New Price Data Mean for the Goal of Ending Extreme Poverty? (http:/ / www. brookings. edu/ blogs/
up-front/ posts/ 2014/ 05/ 05-data-extreme-poverty-chandy-kharas) Brookings Institute, Washington D.C. (May 2014)
[4] GINI index (http:/ / data. worldbank. org/ indicator/ SI. POV. GINI) World Bank (2009-2012)
[5] International Labor Comparisons - India (http:/ / www. bls. gov/ fls/ india. htm) Average Salary Tables, Bureau of Labor Statistics, US
Government (2012)
[6] GNI per capita, Atlas method (current US$) (http:/ / data. worldbank. org/ indicator/ NY. GNP. PCAP. CD/ countries) World Bank (2014)
[7] Table 3.4, World Consumer Income and Expenditure Patterns - Annual Household Income (http:/ / www. euromonitor. com/ medialibrary/
PDF/ Book_WCIEP0. pdf) Euro Monitor International (2013), pp 45

23

Economy of India
[8] GDP of India and major Sectors of Economy (http:/ / data. gov. in/ catalog/
gdp-india-and-major-sectors-economy-share-each-sector-gdp-and-growth-rate-gdp-and-other#web_catalog_tabs_block_10) Government of
India (2013)
[9] Foreign Trade Performance of India Annual Report (http:/ / www. dgciskol. nic. in/ ) Directorate General of Commercial Intelligence and
Statistics, Ministry of Commerce and Industry, Government of India (2012)
[10] Trade Profile - India (http:/ / stat. wto. org/ CountryProfile/ WSDBCountryPFView. aspx?Country=IN& Language=F) World Trade
Organization (2013)
[11] India's definition of engineering goods includes metal products, industrial machinery and equipment, auto and its components, and transport
equipment
[12] World Investment Report 2014 (http:/ / unctad. org/ en/ PublicationsLibrary/ wir2014_en. pdf) UNCTAD - United Nations Conference on
Trade and Development (February 2014), page 206
[13] World Economic Outlook Database, October 2012 (http:/ / www. imf. org/ external/ pubs/ ft/ weo/ 2012/ 02/ weodata/ weorept.
aspx?sy=2010& ey=2017& scsm=1& ssd=1& sort=country& ds=. & br=1& c=534& s=NGDP_RPCH,NGDPD,GGXWDG_NGDP& grp=0&
a=& pr. x=45& pr. y=12)
[14] India 2014 Article IV Consultation - Country Report 14/57 (http:/ / www. imf. org/ external/ pubs/ ft/ scr/ 2014/ cr1457. pdf) International
Monetary Fund, page 6 (February 2014)
[15] http:/ / in. reuters. com/ article/ 2014/ 07/ 11/ india-rbi-forexreserve-idINKBN0FG1AE20140711
[16] https:/ / www. cia. gov/ library/ publications/ the-world-factbook/ geos/ in. html
[17] World Trade Organization, World Trade Report 2013 (http:/ / www. wto. org/ english/ res_e/ booksp_e/ world_trade_report13_e. pdf),
Geneva, ISBN 978-92-870-3859-3
[18] Modest trade growth anticipated for 2014 and 2015 following two year slump (http:/ / www. wto. org/ english/ news_e/ pres14_e/ pr721_e.
htm) World Trade Organization (14 April 2014)
[19] RBI governor Raghuram Rajan meets Narendra Modi (http:/ / www. livemint. com/ Politics/ Jh1N8RUWG7J5BKZfTSyYZO/
RBI-governor-Raghuram-Rajan-meets-Narendra-Modi. html) LiveMint (1 June 2014)
[20] The India Model, by Das, Gurcharan. 1936. Foreign Affairs, Vol. 85, No. 4 (Jul.Aug. 2006), p. 4: "Father and daughter shackled the
energies of the Indian people under a mixed economy that combined the worst features of capitalism and socialism. Their model was
inward-looking and importsubstituting rather than an outward-looking and export-promoting, and it denied India a share in the prosperity
that a massive expansion in global trade brought in the post-World War II era."
[21] List of Tables (http:/ / www. wto. org/ english/ res_e/ statis_e/ its2013_e/ its13_world_trade_dev_e. pdf), World Trade, WTO Geneva, pp
22-23
[22] The India Model, by Das, Gurcharan. 1936. Foreign Affairs, Vol. 85, No. 4 (Jul.Aug. 2006), p. 4: "But even this system could have
delivered more had it been better implemented. It did not have to degenerate into a 'license-permit-quota raj'..."
[23] ref name="potential">
[24] Economic Survey 2010, pp.12.
[25] Inflation, consumer prices (annual %) (http:/ / data. worldbank. org/ indicator/ FP. CPI. TOTL. ZG) The World Bank (2014)
[26] Maddison A (2007), Contours of the World Economy I-2030AD, Oxford University Press, ISBN 978-0199227204. The data tables from this
book are available online here (http:/ / www. ggdc. net/ maddison/ oriindex. htm)
[27] Task Force Report 2006, p.7.
[28] Task Force Report 2006, pp.78.
[29] Task Force Report 2006, pp.1720.
[30] http:/ / www. un. org/ en/ development/ desa/ policy/ wesp/ wesp_archive/ 2010annex. pdf
[31] GDP growth in 2012-13 worse than expected (http:/ / www. livemint. com/ Politics/ burPSwwZ4JstNqkBGGWXCP/
Economy-grows-45-in-fiscal-2013. html) LiveMint and The Wall Street Journal (31 January 2014)
[32] Ease of Doing Business Indices (http:/ / www. doingbusiness. org/ rankings), World Bank (June 2013)
[33] Employment across various sectors (http:/ / planningcommission. nic. in/ data/ datatable/ 0306/ table 116. pdf), NSSO 66th Nationwide
Survey, Planning Commission, Government of India (June 3, 2014), pp 116
[34] Indian Economy (http:/ / indiainbusiness. nic. in/ newdesign/ index. php?param=advantage/ 163) Government of India (2013)
[35] Employment across various sectors (http:/ / planningcommission. nic. in/ data/ datatable/ 0306/ table 116. pdf), NSSO 66th Nationwide
Survey, Planning Commission, Government of India (3 June 2014)
[36] Economic Survey 2010, p.180.
[37] GDP and its breakdown at current prices in US Dollars (http:/ / unstats. un. org/ unsd/ snaama/ dnlList. asp) United Nations Statistics
Division (2013)
[38] GDP and its breakdown at constant 2005 prices in US Dollars (http:/ / unstats. un. org/ unsd/ snaama/ dnlList. asp) United Nations Statistics
Division (2013)
[39] Task Force Report 2006, pp.910.
[40] Top ten large oil refineries (http:/ / www. hydrocarbons-technology. com/ features/ feature-top-ten-largest-oil-refineries-world/ )
Hydrocarbon Technologies (September 2013)
[41] Indian Chemical Industry (http:/ / www. ibef. org/ download/ Chemicals-March-220313. pdf) IBEF, Ministry of Commerce and Industry,
Government of India (March 2013)

24

Economy of India
[42] Indian Chemical Industry (http:/ / www. ibef. org/ download/ chemicals-august-2013. pdf) IBEF, Ministry of Commerce and Industry,
Government of India (August 2013)
[43] Indian Pharmaceutical Industry (http:/ / www. ibef. org/ download/ Pharmaceuticals-March-220313. pdf) IBEF, Ministry of Commerce and
Industry, Government of India (2013)
[44] Gujarat Pharma Industry (http:/ / www. in. kpmg. com/ pdf/ gujarat-pharma08. pdf) KPMG (2010)
[45] Indian Pharmaceutical Industry (http:/ / www. ibef. org/ industry/ pharmaceutical-india. aspx) IBEF, Ministry of Commerce and Industry,
Government of India (2013)
[46] Engineering industry of India (http:/ / www. ibef. org/ industry/ engineering-india. aspx) IBEF, Ministry of Commerce and Industry,
Government of India (April 2014)
[47] Making a case for higher engineering exports (http:/ / www. financialexpress. com/ news/ making-a-case-for-higher-engineering-exports/
1273068) The Financial Express (24 July 2014)
[48] Global Tractor Market Analysis Available to AEM Members from Agrievolution Alliance (http:/ / www. aem. org/ News/ Advisors/ AEM/
?HL=Global_Tractor_Market_Analysis_Available_to_AEM_Members_from_Agrievolution_Alliance& A=1292) Association of Equipment
Manufacturers, Milwaukee, Wisconsin, USA (2014)
[49] India Before Europe, C.E.B. Asher and C. Talbot, Cambridge University Press, 2006, ISBN 0-521-80904-5, p. 40
[50] A History of India, Hermann Kulke and Dietmar Rothermund, Edition: 3, Routledge, 1998, p. 160; ISBN 0-415-15482-0
[51] India's gem and Jewelry Sector (https:/ / www. dnb. co. in/ IndianGemsandJewellerySector/ Overview. asp) Dun and Bradstreet (2012)
[52] Consumer demand for gold up 53% in Q2 2013 led by strong growth in China and India (http:/ / www. gold. org/ news-and-events/
press-releases/ consumer-demand-gold-53-q2-2013-led-strong-growth-china-and-india) World Gold Council (August 2013)
[53] Gems and Jewelry Industry in India (http:/ / www. ibef. org/ industry/ gems-jewellery-india. aspx) IBEF, Ministry of Commerce and
Industry, Government of India (2013)
[54] All that glitters is Gold: India Jewellery Review 2013 (http:/ / www. ficci. com/ spdocument/ 20332/ India-Jewellery-Review-2013. pdf)
A.T. Kearny (2014)
[55] Oppi Untracht (1997), Traditional jewelry of India, ISBN 978-0810938861, pp 1-23
[56] Indian diamond cutting and polishing sector (http:/ / www. rough-polished. com/ en/ analytics/ 77889. html) Rough and Polished (6 March
2013)
[57] Mining (http:/ / mospi. nic. in/ Mospi_New/ upload/ SYB2014/ CH-15-MINING/ Mining. pdf) Chapter 15, Ministry of Statistics and
Programme Implementation, Govt of India (2011)
[58] Emerging economies and Indias mining industry (http:/ / www. ey. com/ IN/ en/ Industries/ Mining---Metals/
EY-emerging-economies-and-Indias-mining-industry) Ernst & Young (2014)
[59] Mining (http:/ / mospi. nic. in/ Mospi_New/ upload/ SYB2014/ CH-15-MINING/ Mining. pdf) Chapter 15, Ministry of Statistics and
Programme Implementation, Govt of India (2011), pp 205
[60] World Steel Figures in 2013 (https:/ / www. worldsteel. org/ dms/ internetDocumentList/ bookshop/ Word-Steel-in-Figures-2013/ document/
World Steel in Figures 2013. pdf) World Steel Association (2014), pp 9
[61] Aluminum (http:/ / minerals. usgs. gov/ minerals/ pubs/ commodity/ aluminum/ mcs-2014-alumi. pdf) USGS, U.S. Government (2014)
[62] Mines (http:/ / business. gov. in/ Industry_services/ mines. php) Business Knowledge Resources, Government of India (2013)
[63] Unlocking the Potential of the Indian Minerals Sector (http:/ / mines. nic. in/
writereaddata\Contentlinks\9eeb6e3b6113423586029ee88e1f4b36. pdf) Ministry of Mines, Govt of India (November 2011)
[64] Indian Railways (http:/ / www. indianrailways. gov. in/ railwayboard/ uploads/ directorate/ stat_econ/ MTHSTAT/ 2014/
MER_March_2014. pdf) Govt of India (2014)
[65] India Infrastructure Summit 2012 (http:/ / www. ey. com/ Publication/ vwLUAssets/ FICCI_Infra_report_final/ $FILE/
FICCI_Infra_report_final. pdf) Ernst & Young (2013), pp 4
[66] Ports (http:/ / business. gov. in/ infrastructure/ ports. php) Business Resources, Govt of India (2013)
[67] Airports (http:/ / www. aai. aero/ allAirports/ airports. jsp) AAI, Govt of India (2013)
[68] LIST OF LICENSED AERODROME (http:/ / dgca. nic. in/ aerodrome/ aero_list. pdf) Directorate General of Commercial Aviation, Govt of
India (May 2014)
[69] Gnanasambandam et al., Online and upcoming: The Internets impact on India (http:/ / www. mckinsey. com/ ~/ media/ mckinsey offices/
india/ pdfs/ online_and_upcoming_the_internets_impact_on_india. ashx) McKinsey & Company (December 2012)
[70] The Indian Kaleidoscope - Emerging trends in retail (http:/ / www. pwc. in/ en_IN/ in/ assets/ pdfs/ industries/ retail-and-consumer/
retail-report-300812. pdf) PWC (2012)
[71] Successful Innovations in Indian Retail (http:/ / www. strategyand. pwc. com/ media/ file/
RAI_Strategyand_Successful-Innovations-in-Indian-Retail. pdf) Booz Allen & PwC (February 2013)
[72] Sharma and Mukherji, Bad Roads, Red Tape, Burly Thugs Slow Wal-Mart's Passage in India (http:/ / online. wsj. com/ news/ articles/
SB10001424127887323622904578129294224588914) The Wall Street Journal (12 January 2013)
[73] India's Food Transportation Ordeal (http:/ / online. wsj. com/ news/ articles/ SB10001424127887324907204578187122310400706) The
Wall Street Journal (11 January 2013)
[74] UNWTO Tourism Highlights 2014 Edition (http:/ / dtxtq4w60xqpw. cloudfront. net/ sites/ all/ files/ pdf/ unwto_highlights14_en_hr_0. pdf)
United Nations World Tourism Organization, pp 9

25

Economy of India
[75] India's tourism performance (http:/ / asiapacific. unwto. org/ sites/ all/ files/ pdf/ cap-csa-24-5b_ref_indias_report. pdf) United Nations
World Tourism Organization (2013)
[76] Yearbook of Tourism Statistics, Data 2008 2012, 2014 Edition (http:/ / www2. unwto. org/ publication/
yearbook-tourism-statistics-data-2008-2012-2014-edition) United Nations World Tourism Organization (2014)
[77] RN Pandey, Inbound Tourism Statistics of India (http:/ / statistics. unwto. org/ sites/ all/ files/ pdf/ india_inbound_0. pdf) Ministry of
Tourism, Govt of India (2012)
[78] The GDP contribution of international tourism is estimated at 2.8% by UNWTO, International Tourism Statistics (http:/ / dtxtq4w60xqpw.
cloudfront. net/ sites/ all/ files/ docpdf/ statistics. pdf)
[79] Medical Tourism draws Americans to India (http:/ / communities. washingtontimes. com/ neighborhood/ travelers-notebook/ 2013/ aug/ 18/
medical-tourism-draws-americans-india/ ) Washington Times (18 August 2013)
[80] Economic Survey 2010, pp.127129.
[81] Economic Survey 2010, p.127.
[82] 2013 Annual Report (http:/ / commerce. gov. in/ publications/ pdf/ annualreport_overview-2012-13. pdf) Ministry of Commerce, Govt of
India (2013)
[83] India's trade deficit with China mounts to $ 31.42 bn (http:/ / articles. economictimes. indiatimes. com/ 2014-01-10/ news/
46066593_1_trade-deficit-indian-it-trade-data) The Economic Times (10 January 2014)
[84] Economic Survey 2010, pp.142144.
[85] Economic Survey 2010, p.132.
[86] UK to end financial aid to India (http:/ / www. ft. com/ intl/ cms/ s/ 0/ 30203e68-2a55-11e2-99bb-00144feabdc0. html#axzz396DRjDNU)
The Financial Times (9 November 2012)
[87] http:/ / in. reuters. com/ article/ 2014/ 09/ 05/ india-cenbank-forex-reserves-idINS8N0QH02M20140905
[88] Govt unleashes big-bang FDI reforms, opens up defence (http:/ / timesofindia. indiatimes. com/ business/ india-business/
Govt-unleashes-big-bang-FDI-reforms-opens-up-defence/ articleshow/ 21110866. cms) The Times of India (17 July 2014)
[89] Govt allows FDI multi-brand retail, aviation in bold reform push (http:/ / in. reuters. com/ article/ 2012/ 09/ 14/
india-economy-retail-fdi-reform-idINDEE88D08M20120914) Reuters (14 September 2012)
[90] Shah and Patnaik, India's financial globalisation (http:/ / www. imf. org/ external/ pubs/ ft/ wp/ 2011/ wp1107. pdf) IMF (2012)
[91] Mahindra Expands Effort to Counter Global Rivals with U.S. Engineering (http:/ / online. wsj. com/ news/ articles/
SB10001424052702304655304579552181391629024) The Wall Street Journal (9 May 2014)
[92] A Slice of World Action (http:/ / businesstoday. intoday. in/ story/ bt-500-indian-inc-goes-global/ 1/ 189144. html) Business Today (11
November 2012)
[93] Indias industrial outpost Tata for now (http:/ / www. economist. com/ node/ 21528653) The Economist (10 September 2011)
[94] JLR's Ratan Tata warns on UK competitiveness (http:/ / www. telegraph. co. uk/ finance/ newsbysector/ industry/ 9722673/
JLRs-Ratan-Tata-warns-on-UK-competitiveness. html) The Telegraph (5 December 2012)
[95] USD INR (http:/ / finance. yahoo. com/ echarts?s=USDINR=X+ Interactive#symbol=USDINR=X;range=2y) Currency Conversion Rates,
Yahoo
[96] Table 2.9 of World Development Indicators: Distribution of income or consumption (http:/ / wdi. worldbank. org/ table/ 2. 9) The World
Bank
[97] Table 3.4, World Consumer Income and Expenditure Patterns - Annual Household Income (http:/ / www. euromonitor. com/ medialibrary/
PDF/ Book_WCIEP0. pdf) Euro Monitor International (2013)
[98] GNI per capita, PPP (current international $) (http:/ / data. worldbank. org/ indicator/ NY. GNP. PCAP. PP.
CD?order=wbapi_data_value_2013+ wbapi_data_value+ wbapi_data_value-last& sort=desc) The World Bank (July 2014)
[99] Nutrition (http:/ / www. unicef. org/ india/ nutrition. html), Fast Facts, UNICEF (2009)
[100] Sarkar & Kumar (2011), Impact of MGNREGA on Reducing Rural Poverty and Improving Socio-economic Status of Rural Poor: A Study
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[102] Aggarwal & Kumar (November 2012), Structural change, industrialization and poverty reduction: the case of India (http:/ / sswa. unescap.
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[103] Kotwal, Ramaswami & Wadhwa (2011), Economic liberalization and Indian economic growth: What's the evidence?, Journal of Economic
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[104] Desai, Sonalde, Amaresh Dubey, B.L. Joshi, Mitali Sen, Abusaleh Shariff and Reeve Vanneman (201) India Human Development in India:
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[105] Economic Survey 2010, pp.275277.
[106] Desai, Sonalde, Amaresh Dubey, B.L. Joshi, Mitali Sen, Abusaleh Shariff and Reeve Vanneman (201) India Human Development in India:
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[107] India and its diaspora (http:/ / moia. gov. in/ accessories. aspx?aid=10) Ministry of Overseas Indian Affairs, India
[108] Leone Lakhani, Dubai's expat Indians: The world's most productive foreign workers (http:/ / edition. cnn. com/ 2014/ 05/ 15/ business/
dubai-indians-expats-elections/ ) CNN (19 May 2014)

26

Economy of India
[109] Economic Survey 2010, pp.280281.
[110] Ranking of states and union territories by lireacy rate: 2011 (http:/ / censusindia. gov. in/ 2011-prov-results/ data_files/ india/
Final_PPT_2011_chapter6. pdf) Census of India, Ministry of Home Affairs, Government of India (2013)
[111] Datt & Ravallion (2011), Has India's economic growth become more pro-poor in the wake of economic reforms?, The World Bank
Economic Review, 25(2), pp 157-189
[112] Tripathi, Sabyasachi (December 2013), Has urban economic growth in Post-Reform India been pro-poor between 1993-94 and 2009-10?
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[113] Modi Mania propels Indias stock market into worlds top 10 (http:/ / www. ft. com/ intl/ cms/ s/ 0/
fa07a946-e1a1-11e3-b7c4-00144feabdc0. html#axzz38le1HY8o) The Financial Times (22 May 2014)
[114] Latest Statistics of Stock Exchanges Worldwide (http:/ / www. world-exchanges. org/ statistics/ monthly-reports) WFE (July 2014), see
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[115] EY Global IPO Trends Global IPO Trends Q4 2013 (http:/ / www. ey. com/ Publication/ vwLUAssets/
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[116] Listing abroad sans domestic IPO set to be a reality soon (http:/ / www. business-standard. com/ article/ markets/
listing-abroad-sans-domestic-ipo-set-to-be-a-reality-soon-113122000712_1. html) Business Standard (28 July 2013)

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Kumar, Dharma (2005). The Cambridge Economic History of India, Volume II : c. 17572003. New Delhi:
Orient Longman. p.1115. ISBN978-81-250-2710-2.
Nehru, Jawaharlal (1946). The Discovery of India. Penguin Books. ISBN0-14-303103-1.
Panagariya, Arvind (2008). India: The Emerging Giant. Oxford University Press. p.514.
ISBN978-0-19-531503-5.
Raychaudhuri, Tapan; Habib, Irfan (2004). The Cambridge Economic History of India, Volume I : c. 1200 c.
1750. New Delhi: Orient Longman. p.543. ISBN978-81-250-2709-6.
Roy, Tirthankar (2006). The Economic History of India 18571947. Oxford University Press. p.385.
ISBN978-0-19-568430-8.
Papers and reports
"Economic reforms in India: Task force report" (http://harrisschool.uchicago.edu/News/press-releases/IPP
Economic Reform in India.pdf) (PDF). University of Chicago. p.32.
"Economic Survey 200910" (http://indiabudget.nic.in/es2009-10/chapt2010/chapter.zip). Ministry of
Finance, Government of India. p.294.

27

Economy of India

Further reading
Books
Alamgir, Jalal (2008). India's Open-Economy Policy. Routledge. ISBN978-0-415-77684-4.
Bharadwaj, Krishna (1991). "Regional differentiation in India". In Sathyamurthy, T.V. Industry & agriculture in
India since independence. Oxford University Press. pp.189199. ISBN0-19-564394-1.
Articles
"Growth of India" (http://www.janderie.live.haverford.edu/wiki/index.php?title=India_growth). Retrieved
2005-08-10.
"Milton Friedman on the Nehru/Mahalanobis Plan" (http://www.indiapolicy.org/debate/Notes/fried_opinion.
html). Retrieved 2005-07-16.
"Infrastructure in India: Requirements and favourable climate for foreign investment" (http://www.asiatradehub.
com/india/intro.asp). Retrieved 2005-08-14.
Bernardi, Luigi and Fraschini, Angela (2005). Tax System And Tax Reforms in India (http://ideas.repec.org/p/
uca/ucapdv/45.html). Working paper n. 51.
Centre for Media Studies (2005). India Corruption Study 2005: To Improve Governance Volume I: Key
Highlights (http://www.prajanet.org/newsroom/internal/tii/ICS2k5_Vol1.pdf) (PDF). Transparency
International India. Retrieved 2009-06-21.
Ghosh, Jayati. "Bank Nationalisation: The Record" (http://www.macroscan.com/cur/jul05/
cur210705Bank_Nationalisation.htm). Macroscan. Retrieved 2005-08-05.
Gordon, Jim and Gupta, Poonam (2003). Understanding India's Services Revolution (http://www.imf.org/
external/np/apd/seminars/2003/newdelhi/gordon.pdf) (PDF). 12 November 2003. Retrieved 2009-06-21.
Panagariya, Arvind (2004). India in the 1980s and 1990s: A Triumph of Reforms (http://ideas.repec.org/p/
wpa/wuwpit/0403005.html).
Sachs, D. Jeffrey; Bajpai, Nirupam and Ramiah, Ananthi (2002). Understanding Regional Economic Growth in
India (http://web.archive.org/web/20070701042205/http://www2.cid.harvard.edu/cidwp/088.pdf) (PDF).
Working paper 88. Archived from the original (http://www2.cid.harvard.edu/cidwp/088.pdf) on 1 July 2007.
Srinivasan, T.N. (2002). Economic Reforms and Global Integration (http://www.econ.yale.edu/~srinivas/
ec_reforms.pdf) (PDF). 17 January 2002. Retrieved 2009-06-21.
Kurian, N.J. "Regional disparities in india" (http://planningcommission.nic.in/reports/sereport/ser/
vision2025/regdsprty.doc). Retrieved 2005-08-06.
News
Ravi S Jha. "India, the Goliath, Falls with a Thud" (http://www.khaleejtimes.com/kt-article-display-1.
asp?section=business&xfile=data/business/2008/october/business_october347.xml).
"India says 21 of 29 states to launch new tax" (http://www.dailytimes.com.pk/default.
asp?page=story_25-3-2005_pg5_13). Daily Times. 25 March 2005.
"Economic structure" (http://www.economist.com/countries/India/profile.cfm?folder=Profile-Economic
Structure). The Economist. 6 October 2003.a
"Regional stock exchanges Bulldozed by the Big Two" (http://www.thehindubusinessline.com/businessline/
2001/07/20/stories/0420.62 billion.htm). Retrieved 2005-08-10.
"FinMin considers three single-brand retail FDI proposals" (http://news.indiamart.com/story/
finmin-considers-three-single-brand-retail-fdi-proposals-169557.html).

28

Economy of India

29

External links
Wikimedia Commons has media related to Economy of India.

Wikiquote has quotations related to: Economy of India

Government of India websites

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

Department of Commerce, Government of India (http://commerce.nic.in/)
Department of Industrial Policy & Promotion (http://dipp.nic.in/English/default.aspx)
Office of the Economic Adviser (http://eaindustry.nic.in/)
India in Business (http://www.indiainbusiness.nic.in/)- Official website for Investment and Trade in India
Union Budget & Economic Survey (http://indiabudget.nic.in/index.asp)
Income Tax Department of India (http://www.incometaxindia.gov.in/home.asp)
Central Board of Excise and Customs (http://www.cbec.gov.in/cae1-english.htm)
Reserve Bank of India's database on the Indian economy (http://www.rbi.org.in/scripts/Statistics.aspx)

Publications and statistics

Key indicators of household consumer expenditure in India 20112012 (http://www.indiaenvironmentportal.
org.in/reports-documents/key-indicators-household-consumer-expenditure-india-2011-2012)
World Bank India 2012 Trade Summary Statistics (http://wits.worldbank.org/CountryProfile/Country/IND/
Year/2012/Summary)
World Bank India Country Overview (http://www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/
SOUTHASIAEXT/INDIAEXTN/
0,,contentMDK:20195738~menuPK:295591~pagePK:141137~piPK:141127~theSitePK:295584,00.html)
Ernst & Young 2011 Report on Doing Business in India (http://www.ey.com/Publication/vwLUAssets/
Doing_business_in_India_2011/$FILE/Doing_business_in_India_2011.pdf)
IMF, India (http://www.imf.org/external/country/IND/index.htm)
CIA The World Factbook India (https://www.cia.gov/library/publications/the-world-factbook/geos/in.
html)
Quandl India Country Overview (http://www.quandl.com/india)

Article Sources and Contributors

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Aathma123, Abanerjee054, Abecedare, Abhaynagale, Abhiag, Abhirassharma, Abhishekc2q, AbhisheksinghWIKI, Abhowmick, Abjerer, Achmad Fahri, Acs4b, Adityaconsul, Adityapatadia,
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