Indian Economy GDP of India
Indian economy is positioned as sixth in terms of the nominal GDP and is considered as the third-largest economy in terms of purchasing power parity (PPP). The years, 2015 and 2016 have played a vital role in Indian economic development as during this period Indian World Bank’sexpansion and growth was observed. This was the major reason why the economy developed to 7.6%. However, this growth diminished in2017 to 7.1% but it is assumed that the growth rate will rise up to 7.2%in 2018 following 7.7% in 2019.
Indian economy is mainly known for its service sectors as it has been one of the leading countries to export business process outsourcing(BPO) services and software services. India is also rich in the agricultural sector employing thousands of people in agricultural fields and seeking a second position in the world in terms of farm output. History of Indian economy After the conclusion of British rule, India’s economy grew but the rate of development was slow. When India adopted liberalization, it became one of the fastest-growing countries in the world. Generally, there were 3 era’sin Indian histories that are: the ancient and medieval period, the Mughal era, and the British era. Let’s discuss these periods in detail: Ancient and medieval era The ancient period is linked with1800 BC and 2800 BC when the people used to exercise agricultural activities, use uniform measures to weigh, developed urban sanitation system, and brought in various changes. South India and West Asia were the two regions involved in maritime trading and the two spots named Coromandel Coast and Malabar were set as the trading centers. However, the trading could not sustain for a long time as the Coromandel Coast and Malabar were snatched and controlled by the Jewish, Parsi, Syria, Muslims, and Christian. In this era, the reputed kings and rulers used to take revenues from the small agricultural farmers for lending them the land to harvest crops. The farmers were given some harvested crops for their hard work and services.
This clearly states that though the kings had the authority to issue coins and currency, the barter system still exists and exploited the peasants. Mughal era The Mughal era began in 1526and lasted till 1793 in which the Indian economy remained stable until the 18th century. The Gold, Silver, copper, and other important coins were issued by the Mughal emperor. Before the arrival of Britishers, India was united. There were about 64% of the people engaged in agricultural activities and 36% of people opted for industrial and service sectors for their daily livelihood. In comparison to Europe where more than 80% of the people were dependent on agriculture, the Indian economy proved to be better. Indian industrial sector boosted under the Mughal period. The cash crops, goods, equipment, tools, and other commodities were exported all over the world. The major leading industries in India during the Mughal rule include textiles, steel, and shipbuilding. The food that was supplied was sugar, oil, and butter. In the 17th and 18thcentury, Europe was highly lured by the Mughal’sproduction and hence several commodities like spices, indigo, peppers, and silks were imported from Europe. The Mughal emperor concluded in the 18th century when north India and South India were snatched by the Marathas.
This led to the decrease in agricultural productivity and hence the industrial sectors were affected by the slow growth. British era (1793-1947) In the 19th century, India was controlled by the Britishers who used to take the Indian raw materials and supply the same to Britain for the conversion of raw materials into final products. These final products were then sold to Indians at an expensive rate. The period of the British era resulted in a declined productivity of food crops, mass impoverishment, unemployment, and various famines. The per capita income which was estimated to be 24.4% during the Mughal period was brought down to 4.2% in the 1950s. A large number of Indian markets were conquered by the Britishers and the tariffs and Quotas were introduced in India for exporting the commodities to other countries except for Britain. Although the British government ruined the Indian economy, there were some positive aspects of this colonial rule as well. The railways, communication, airways, and roadways were well-developed by the Britishers for the transfer of Indian commodities to Britain and vice versa. After the conclusion of the British period, India adopted the worst economy that comprised illiterate farmers and a labor force, insufficient agricultural production in respect to the Indian population, inadequate infrastructure, and massive unemployment. Three sectors of Economy Indian adopted a three sectors economy including Agricultural sector – crops, horticulture, milk and animal husbandry, fishing, aquaculture, forestry, aviculture, and much more Industry and manufacturing sector– manufacture and processing of steel, iron, copper, and other industrial related goods. The service sector – construction, infrastructure, education, communication, healthcare, banking and financing, hospitals, transport, insurance, and other such economic activities. Agricultural sector According to the surveys of 2014, India was placed at 2nd position in agricultural productivity with around 49% of the people employed in the same sector. Although Indian agriculture declined till 2011, the green Revolution played a major part in improving irrigation, technology, adoption of modern agricultural tools and equipment, and allowance of various agriculture subsidies.
The international reports clarified that Indian agriculture contributes 30% – 50% of the total agricultural production in the world. Uttar Pradesh, Madhya Pradesh, Telangana, Andhra Pradesh, Bihar, West Bengal, Maharashtra, and Gujarat are the major contributors to agriculture productivity. Around six million of the Indian workforce is engaged in fisheries work. The country has also occupied the Sixth position in the largest fishing industries of the world. Cotton, milk, and jute are largely produced in India and are exported to diverse parts of the world. The 2011 estimation states that there are a total of 170 million animals present in this land i.e., the second-largest country in the animal population. India has ranked second in the production of wheat, Rice, sugarcane, cotton, groundnuts, fruit and vegetables, and consumer silk. Industrial sector There is recently 22% of the Indian workforce engaged in the industrial sector. The Indian industries experience several amendments after the end of colonial rule. In 1991, India was liberalized from the export and import of foreign countries and hence welcomed foreign investment, the government-owned companies that experienced losses were privatized, and the infrastructure was improved to a great extent leading to the easy flow of goods and services from one place to another. India also adopted the latest and modern technologies reducing labor-intensive industries. But this expansion also resulted in increased unemployment. Petroleum products and chemicals The overall contribution of petroleum and chemical industries to India’s GDP is 34%. Jamnagar in India owns the world’s largest refinery. India is also listed under the top5 producers of agrochemicals, polymers, plastic, dyes, and other such chemicals. At the same time, the country also imports a large number of chemicals to accomplish domestic requirements. Engineering The engineering sector includes machines, tools, transformers, capital goods, automobiles, switchgear, furnaces, and much more.
India is the third-largest exporter of Engineering products and this sector also has a major contribution to the GDP. Gems and jewelry India has been the major producer and supplier of precious metals like Diamonds, Gold, and Silver for many years. Surat and Mumbai are mainly known for polishing jewelry, cutting, finishing, and supply. The jewelry industries contribute to 7% of the Indian GDP. Service sector In 1950, the service sector has the lowest contribution to GDP that is 15% but in today’s era, this sector is the major contributor with 57% of the world’s GDP. Around 27% of the Indian workforce is employed by the service sector. Banking and finance are one of the essential service factors that are classified into two types i.e., an organized sector that consists of private banks, public banks, and foreign-operated banks. The unorganized sector consists of money lenders and other financial institutions. According to the surveys taken in 2006and 2007, the public bank had around 75% of assets and on the other hand, the private and foreign-owned had 18.2% assets.
Electricity sector India is titled as the third-largest energy-consuming country with China and the United States of America being the first and second places. India consumes 85% of coal and crude oil and the oil stock of India accomplishes25% of people’s requirements. Assam, Gujarat, Rajasthan, and Mumbai are the major cities where the oil and natural gas fields are sited. In 2013, India ranked third in the production of electricity. Infrastructure India’s infrastructure adds 5% to the GDP. The roadways are well built and the Indian roads are the second-largest roadways in the world. India has government-owned railway tracks that are considered the fourth largest railways in the world. There are about 125 airports in India among which there are 65 airports that have the permit to carry both travelers as well as cargo.
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