Basic Introduction to Indian Economics
- Indian Economy is the third fastest growing economy in the world after China and the United States of India.
- The GDP of India is 9.4Trillion US$ after China which has a GDP of 23 Trillion US$ and the USA which has a GDP of 19.3 Trillion US$.
- India has a population of around 125 crore people and around 55% of the population of the country and around 45% of the land area of India is engaged in agriculture and agriculture-related activities however the share of agriculture in the GDP of India is only 17%.
- Poverty in India is widespread and according to the latest report by Mr C Ranjarajan around 22% of the population of India lives below the poverty line and according to the International Poverty Line by the World Bank around 24 % of the population of India lives below the poverty line.
- The rank of India in the Per Capita Income is 140th and it is 1852US$ per person per year. The labour force of India is around 52 crores which is the second-largest workforce in the world after China.
- The rate of Unemployment in India is around 5%.
The rank of India in the HDI is 131 out of 188 countries. The HDI report is the annual report published by the UNDP it consists of 3 major parameters:
- High Per Capita Income
- High Literacy
- High Life Expectancy
The nature of the Indian Economy is a mixed economy i.e. it is the combination of Socialist and Capitalist Economy it was adopted by the Indian government in the year 1991.
Socialist means the system under which the economic system is controlled and regulated by the government so as to ensure welfare and equal opportunity to the people in a society.
The idea of socialism is first introduced by Karl Marx and Fredric Engles in their book, ‘The Communist Manifesto’.
It is one of the oldest economic systems and its origin is in the time of the mid-eighteenth century in England in the wake of the Industrial Revolution. It is that system, where means of production are owned by private individuals, profit is the main motive and there is no interference by the government in the economic activities of the economy. Hence, it is known as a free-market economy.
There are three major sectors of the Indian Economy:
- Primary Sector- It consists of agriculture and agriculture-related activities it consists of 55% of the population and it contributes 17% of the total GDP of India
- Secondary Sector- It consists of manufacturing and industries it consists of 25% of the population and it contributes 28% of the total GDP of India
- Tertiary Sector/ Service Sector- It consists of business, transport, service, banking, IT, Insurance etc. it consists of 20% of the population and it contributes 55% of the total GDP of India.
Five Year Plans in India:
- India’s planning is based on the 5 years plans
- The concept of the 5-year plan has been borrowed from the constitution of USSR/ Russia
- The concept of planning in India was given in the year 1934 by Mr. M Vishveshvarya
- The National Planning Commission was setup in the year 1938
- Bombay Plan was given in the year 1944 by the top industrialist of India
- Gandhian Plan was given in the year 1944 by Mr. S.N Agarwal
- Labor leader Mr. M N Roy gave people’s plan in the year 1945
- Sarvodaya Plan was given by Lok Nayak Jaiprakash Narayan in the year 1950 Planning Commission was set up in the year 1950
- National Development Council was set up in the year 1952
- NITI Aayog was set up in the year 2015
- First five-year plan (1951-1956)
- Second five-year plan (1956-1961)
- Third Five Year Plan (1961-1966)
- Three annual plans (plan holiday 1966-1969)
- Fourth Five Year Plan (1969-1974)
- Fifth Five Year Plan (1974-1979)
- Rolling Plan (1978 – 1980)
- Sixth Five Year Plan (1980-1985)
- Seventh Five Year Plan (1985-1990)
- Annual Plan (1990-1992)
- Eighth Five Year Plan (1992-1997)
- Ninth Five Year Plan (1997-2002)
- Tenth Five Year Plan (2002-2007)
- Eleventh Five Year Plan (2007-2012)
- Twelfth Five Year Plan (2012-2017)
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