Introduction of Indian Economy

 INTRODUCTION OF INDIAN ECONOMY

Indian economy is primarily an agricultural economy with a major emphasis on the service sector.  Two-third of Indian people earn their living directly or indirectly through agriculture.  Indian economy is the 7th largest economy in the world measured by nominal GDP and the 3rd largest by Purchasing Power Parity(PPP).

Main characteristics of Indian economy are as follows

i)  Agrarian Economy    In an Agrarian Economy, agriculture dominates in both the Gross National Product(GNP) and employment.  More than half of India’s working population is engaged in agriculture.

ii)  Mixed Economy    It is an economy where both public and private sector co-exist.  The nature of Indian economy is a mixed economy.

The term was coined by JM Keynes.  India opted for ‘Mixed Economy’ in the industrial policy of 1948.

iii)  Developing Economy   Following features shows that ‘Indian economy is a developing economy’.

• Low per capita income and occupational pattern is biased towards the primary sector.

•  Heavy population pressure and prevalence of chronic unemployment and under employment.

• Steadily improving rate of capital formation.

• Low capital per head and unequal distribution of wealth/assets.