The Economy of India is the 10th 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. The independence The independence-era Indian economy (from 1947 to1991) was based on a mixed economy combining features of capitalism and socialism This model contributed to widespread inefficiencies and corruption, and the failings of this system were due largely to its poor implementation.
In 1991, India adopted liberal and free-market principles and liberalised its economy to international trade under the guidance of Former Finance ministerManmohanSingh who had eliminated Licence Raj, a pre- and post-British era mechanism of strict government controls on setting up new industry.The combination of protectionist, import-substitution, and Fabian social democratic-inspired policies governed India for sometime after the end of British occupation 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 fastest growing economies. Growth significantly slowed to 6.8% in 2008–09, but subsequently recovered to 7.4% in 2009–10, while the fiscal deficit rose from 5.9% to a high 6.5% during the same period.During 2011–12, India's foreign trade grew by an impressive 30.6%.
In 1975 the size of GDP (in 1990 dollars) was $545 billion in India, $1561 billion in the USSR, $1266 billion in Japan, and $3517 billion in the US.Before independence a large share of tax revenue was generated by the land tax, which was in effect a lump sum tax on land.the structural economic problems inherited at independence were exacerbated by the costs associated with the partition of British India, which had resulted in about 2 to 4 million refugees fleeing past each other across the new borders between India and Pakistan.Since 1950, India ran into trade deficits that increased in magnitude in the 1960s.As a result, the government issued bonds to the RBI, which increased the money supply, leading to inflation. In 1966, foreign aid, which was hitherto a key factor in preventing devaluation of the rupee was finally cut off and India was told it had to liberalise its restrictions on trade before foreign aid would again materialise.Defence spending in 1965/1966 was 24.06% of total expenditure, the highest in the period from 1965 to 1989.This, accompanied by the drought of 1965/1966, led to a severe devaluation of the rupee.From FY 1951 to FY 1979, the economy grew at an average rate of about 3.1 percent a year in constant prices, or at an annual rate of 1.0 percent per capitaDuring this period, industry grew at an average rate of 4.5 percent a year, compared with an annual average of 3.0 percent for agriculture.
Economic liberalisation in India in the 1990s and first decade of the 21st century led to large changes in the economy.The Indian steel industry began expanding into Europe in the 21st century. In January 2007 India's Tata Steel made a successful $11.3 billion offer to buy European steel maker Corus Group. In 2006 Mittal Steel (based in London but with Indian management) acquired Arcelor for $34.3 billion to become the world's biggest steel maker, ArcelorMittal, with 10% of the world's output.The top 3 per cent of the population still contribute 50 per cent of the GDP and benefits of economic growth have not trickled down.Currently, the economic activity in India has taken on a dynamic character which is at once curtailed by creaky infrastructure For purchasing power parity comparisons, the US Dollar is exchanged at 9.46 Rupees only The Union government treasury reported annual revenue of £51–52 billion in 2005 thus registering an average annual growth of almost 22 per cent since 2000. India imported about 85 per cent of oil and 22 per cent of gas consumption by 2003.Industry accounts for 26% of GDP and employs 22% of the total workforce. India is 11th in the world in terms of nominal factory output according to data compiled through CIA World Factbook figures.Textile manufacturing is the 2nd largest source of employment after agriculture and accounts for 20% of manufacturing output, providing employment to over 20 million people.
The services sector provides employment to 27% of the work force and is growing quickly, with a growth rate of 7.5% in 1991–2000, up from 4.5% in 1951–80.It has the largest share in the GDP, accounting for 57% in 2012, up from 15% in 1950.India is one of the fastest growing retail market in the world, with 1.2 billion people.The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets in the world by economic value.Tourism in India is relatively undeveloped, but a high growth sector. It contributes 6.23% to the national GDP and 8.78% of the total employment.Agriculture and allied sectors like forestry, logging and fishing accounted for 17% of the GDP in 2012, employed 51% of the total workforce, and despite a steady decline of its share in the GDP, 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'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 175 million 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.
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.
During the financial year 2011–12 (up to 31 December 2011) resource mobilization through primary market witnessed a sharp decline over the year 2010–11. The cumulative amount mobilized as on 31 December 2011 through equity public issues stood at Rs 9683 crore as compared to 48564 crore in 2011. During 2011–12 30 new companies were listed at the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) amounting to Rs 5043 crore as against 53 companies amounting to Rs 3559 crore listed in 2011–12. The mean IPO size of the year 2011–12 was Rs 168 crore as compared to Rs 671 crore. in 2010–11. Further, only Rs 4791 crore was mobilized through debt issue as compared to Rs 9451 crore in 2010–11. According to the official estimates, Indian economy was expected to grow at 7.6% (+/- 0.25%) in the fiscal year 2012–2013. However, leading financial organisations and economic think-tanks expect Indian economy to grow slower than official projections. In the end, India ended up growing 5% during the 2012–2013 fiscal year.