The economy of India is the sixth-largest economy in the world measured by nominal GDP and the third-largest by purchasing power parity (PPP). The country is classified as a newly industrialised country, one of the G-20 major Economy, a member of BRICS and a developing with an average growth rate of approximately 7% over the last two decades. India's economy became the world's fastest-growing major economy in the last quarter of 2014, replacing the People's Republic of China.
India did not wish to build a monopolistic economy either with no private players and hence, a mixed approach was followed.
MIXED ECONOMY:
“Mixed economy is that economy in which both government and private individuals exercise economic control.” –Murad.
Meaning:
It is a golden mixture of capitalism and socialism.
Under this system, there is freedom of economic activities and government interferences for the social welfare, hence it is a blend of both the economies.
The developing countries like India have adopted mixed economy to accelerate the pace of economic development. Even the developed countries like UK, USA, etc. have also adopted ‘Mixed Capitalist System’.
Nature of Indian Economy:
To know and understand the nature of Indian economy, it is very necessary to have a clear idea about the meaning of Indian economy.
After Independence India launched her First Five Years plan in 1950-51; then now 5-Year Plan is going on.
Although India is an agro-based economy, but a lot of emphases has been given on the development of industries (both consumer goods and capital goods), service sector (including construction, trade, commerce, banking system etc.) and socio-economic infrastructure (like education, health, housing power, energy, transport, communication etc.).
Both central and state governments in India join their hands in all the spheres leading to economic development.
On the basis of production:
(i) Primary or Agricultural Sector:
This sector consists of agriculture and its allied activities including dairy, poultry, cattle rearing, fishing, forestry, animal husbandry etc. In the primary sector, most of the goods are produced by using natural resources, since India is an overpopulated agro-based economy, therefore, this sector plays an important role in economic growth.
(ii) Secondary or Manufacturing Sector:
This sector is also known as an industrial sector. In this category, all types of manufacturing sector like large-scale, small-scale and tiny scale are included. Small and tiny scale industries include clothes, candle, poultry, matchbox, handloom, toys etc. These units provide huge employment. On the other hand, large-scale industries like iron and steel, heavy engineering, chemicals, fertilizers, shipbuilding etc. contribute a huge amount to our gross domestic product.
(iii) Service or Tertiary Sector:
This sector produces different services like transport, communication, banking, insurance, trade and commerce, including both national and international trade. Moreover, all the professional services like doctors, engineers, teachers, lawyers etc. come under service sector. Again the services provided by the government itself for the welfare of citizens are also included in the tertiary sector.
On the basis of Ownership or Organization:
(i) Public Sector:
It consists of all the economic organizations which are controlled and managed by the government. All the government-owned production units come under this head. These units produce and distribute goods and services among the common mass with an objective of welfare motives.
(ii) Private Sector:
It consists of all the economic enterprises which are controlled and managed by the private enterprises. All the privately owned production units come under this category. These units will produce and distribute goods and services to the people with an objective of the profit motive.
On the basis of habitation,
(i) Rural Sector:
According to M.K. Gandhi, “India lives in villages”. About three-fourths of the total population in India lived in the rural sector. The main occupations of this sector are agriculture and allied activities.
(ii) Urban Sector:
One-fourth of the total population in India lived in the urban sector. It consists of towns and cities. People living in this sector are mainly engaged in either secondary sector or tertiary sector.
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