India's Economy and Infrastructure
OVERVIEW
India is rich in natural resources and manpower and has made significant economic progress since attaining independence in 1947. India's economy encompasses traditional village farming, forestry, fishing, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of support services.
Economy transformed from primarily agriculture, forestry, fishing, and textile manufacturing in 1947 to major heavy industry, transportation, and telecommunications industries by late 1970s. Central government planning in 1950 through late 1970s giving way to economic reforms and more private-sector initiatives in 1980s and 1990s. A sophisticated industrial base has been created and a large pool of skilled manpower has emerged. Nevertheless, 67% of India's labor force (nearly 400 million) works in agriculture, which contributes 30% of the country's GDP.
Production, trade, and investment reforms since 1991 have provided new opportunities for Indian businesspersons and an estimated 300 million middle class consumers. New Delhi has avoided debt rescheduling, attracted foreign investment, and revived confidence in India's economic prospects since 1991. Many of the country's fundamentals - including savings rates (26% of GDP) and reserves (now about $24 billion) - are healthy. Inflation eased to 7% in 1997, and interest rates dropped to between 10% and 13%. Even so, the Indian Government needs to restore the early momentum of reform, especially by continuing reductions in the extensive remaining government regulations. Moreover, economic policy changes have not yet significantly increased jobs or reduced the risk that international financial strains will reemerge within the next few years. Nearly 40% of the Indian population remains too poor to afford an adequate diet.
India's exports, currency, and foreign institutional investment were affected by the East Asian crisis in late 1997 and early 1998, but capital account controls, a low ratio of short-term debt to reserves, and enhanced supervision of the financial sector helped insulate it from near term balance-of-payments problems. Export growth, has been slipping in 1996-97, averaging only about 4% to 5%a large drop from the more than 20% increases it was experiencing over the prior three yearsmainly because of the fall in Asian currencies relative to the rupee. Energy, telecommunications, and transportation shortages and the legacy of inefficient factories constrain industrial growth, which expanded only 6.7% in 1997down from more than 11% in 1996. Growth of the agricultural sector is still fairly slow rebounding to only 5.7% in 1997 from a fall of 0.1% in 1996. Agricultural investment has slowed, while costly subsidies on fertilizer, food distribution, and rural electricity remain.
... British had colonized India for approximately 200 years, there were lasting effects on the country in terms of many sectors, specifically the economical and industrial sectors. Due to India’s non-participation and manipulation of agriculture by the British, some would argue that the British obliterated the economy. Others would argue that the British instead helped due to the creation of the railroad, improved communication and created the beginnings of an industry. The British harmed the economy and industrial sector more than they helped it, and effectively caused the destruction of the economy both in the short term and the long term. The growth rate directly after the independence was less than 1% for almost 5 years (BIC 4). It was necessary for India to rebuild the economy if they ever wanted to be on the same playing field as the other countries at the time.
Firstly, industrialisation has expanded the employment opportunities in India. People living in rural areas have moved to cities in search of better employment.
By 1750, imperialistic powers had begun to seize control of many regions through South and Southeast Asia. India fell under control of the British East India company and later became a British colony. Many other areas fell under the control of the Dutch and other European powers. These areas were exploited as sources of raw materials and a place to send European manufactured goods. As in Latin America, few industries rose in Southeast Asia and India. Around World Wars I and II, struggles for independence began there too. When India finally did gain independence, it went through the same problem as Latin America and the rest of Southeast Asia. India’s cotton industry had been destroyed by the flow of cheap British manufactured textiles and the government held monopolies on many trade goods such as salt. Gandhi had supported the limited Westernization of India and the revival of its past industries. The Third World status of many Southeastern nations is beginning to change as trade shifts into the Pacific Ocean. and the Asian Tigers continue to gain power and
Few concerns have surfaced in economy that plays a vital role in agriculture and therefore in economic development. Developing countries and more even, LDC’s, are dependent on agriculture for income for the population. But achieving good agriculture means that many things have to change within these countries self. Good transportation is need in these countries and more often than not the infrastructure doesn’t allow this to happen and transporting agricultural goods are more expensive for these countries, thus these countries need capital and investments to further their outputs and inputs to gain bet...
[6] Kripalani, Majeet & Egnardio, Pete. The Rise Of India. Business Week Online. December 8, 2003. http://www.businessweek.com/magazine/content/03_49/b3861001_mz001.htm
Subramanian, Arvind. India’s Economy is stumbling? The New York Times. August 31, 2013: A19. Print.
The country adopted a liberal democratic system that has since then reduced the level of government interference. Foreign investments and free trade in the country has helped India’s economy to become one of the fastest growing economies in the world today (Patnaik, 2014). The country has managed to reduce poverty levels and it is on the process of improving living standards for the people. This shows that having a stable democracy is a major key to rapid economic growth. Another country that has faced similar conditions as India is Bangladesh.
India, the second highest populated country in the world after China, with 1.27 billion people currently recorded to be living there and equates for 17.31% (India Online Pages 2014) of the world's population, but is still considered a developing country due to it’s poverty and illiteracy rates. As these nations continue to grow at rates that are too fast for resources to remain sustainable, the government’s in these areas wi...
...an HDI of 0.36. These discrepancies in levels of development have led to an exodus of people, from less developed areas to the areas that have been benefitted by development. This situation seems to depict that predicted by the Dependency theory in which the developed countries progressed due to the exploitation of peripheral nations; the same seems to be happening in India. The states that are wealthier are exploiting the poorer states. It would be difficult to imagine India having the economic status that it now has, if it was not for the terrible working conditions and wages at which the Indians are willing to work and the massive work force available in the country. Now that India has seen economic growth the government should start taking care of its citizens by implementing policies that protect the labor rights of the workforce.
criteria, where the state is a key player in industrial ownership and production, and uses
British colonialism brought this quest of modern industrial development to India in early 19th century. India being the second largest populated country in the world; industrial revelation was must for her. The business class of India identifies this requirement first and acted as the change was needed. With the help of western machinery they stated the industrialization with home grown agricultural product. Jute, Cotton, Metal (especially steel), and Tea were the first few product that came out in the initial phase of this development process. Along with the independence, India started ...
India's strategy for development has had many critics. It was pointed out that the emphasis on heavy industry
Agriculture has changed dramatically, especially since the end of World War II. Food and fibre productivity rose due to new technologies, mechanization, increased chemical use, specialization and government policies that favoured maximizing production. These changes allowed fewer farmers with reduced labour demands to produce the majority of the food and fibre.
We must avoid the temptation if at any given time our individual national economy is more prosperous than those of our other partner states, to be so arrogant as to forget that our economic situation may be suddenly reversed and that therefore we will soon need close links with our partner states in matters concerning both the intra-regional and extra-regional spheres. West Indian history abounds with instances of countries suffering sudden reversals of their economic fortunes.
In India, the small-scale industrial sector has been a key contributor to the Gross Domestic Product (GDP). This sector in India is measured to have a huge growth panorama with its wide range of products. With 40% contribution in total industrial output and 35% contribution towards exports, the small-scale industrial sector in India is performing as the engine of expansion.