Economic reforms during the post independence period:

The post independence period of India was marked by economic policies which tried to
make the country self sufficient. Under the economic reform, stress was given more to
development of defense, infrastructure and agricultural sectors. Government companies
were set up and investment was done more on the public sector. This was made to make
the base of the country stronger. To strengthen the infrastructure, new roads, rail lines,
bridges, dams and lots more were constructed.

During the Five Years Plans initiated in the 1950s, the economic reforms of India
somewhat followed the democratic socialist principle with more emphasis on the growth
of the public and rural sector. Most of the policies were meant towards the increase of
exports compared to imports, central planning, business regulation and also intervention
of the state in the finance and labor markets. In the mid 50's huge scale nationalization
was done to industries like mining, telecommunications, electricity and so on.

Economic Reforms during 1960s and 1980s:

During the mid 1960's effort was made to make India self sufficient and also increase the
production and export of the food grains. To make the plan a success, huge scale
agricultural development was undertaken. The government initiated the ‘Green
Revolution’ movement and stressed on better agricultural yield through the use of
fertilizers, improved seed and lots more. New irrigation projects were undertaken and the
rural banks were also set up to provide financial support to the farmers.

The first step towards liberalization of the economy was taken up by Rajiv Gandhi. After
he became the Prime Minister, a number of restrictions on various sectors were eased,
control on pricing was removed, and stress was given on increased growth rate and so
on.

Economic Reforms during 1990s to the present times:

Due to the fall of the Soviet Union and the problems in balance of payment accounts, the
country faced economic crisis and the IMF asked for the bailout loan. To get out of the
situation, the then Finance Minister, Manmohan Singh initiated the economic liberation
reform in the year 1991. This is considered to be one of the milestones in India economic
reform as it changed the market and financial scenario of the country. Under the
liberalization program, foreign direct investment was encouraged, public monopolies
were stopped, and service and tertiary sectors were developed.

Since the initiation of the liberalization plan in the 1990s, the economic reforms have put
emphasis on the open market economic policies. Foreign investments have come in
various sectors and there has been a good growth in the standard of living, per capital
income and Gross Domestic Product.
Private sector of Indian economy

Due to the global meltdown, the economy of India suffered as well. However, unlike
other countries, India sustained the shock as an important part of its financial and banking
sector is still under government regulation. Nevertheless, to cope with the present
situation, the Indian government has taken a number of decisions like strengthening the
banking and tertiary sectors, increasing the quantity of exports and lots more. The private
sector of Indian economy is the past few years have delineated significant development in
terms of investment and in terms of its share in the gross domestic product. The key areas
in private sector of Indian economy that have surpassed the public sector are transport,
financial services etc.
Indian government has considered plans to take concrete steps to bring affect poverty
alleviation through the creation of more job opportunities in the private sector of Indian
economy, increase in the number of financial institutions in the private sector, to provide
loans for purchase of houses, equipments, education, and for infrastructural development
also. The private sector of Indian economy is recently showing its inclination to serve the
society through women empowerment programs, aiding the people affected by natural
calamities, extending help to the street children and so on. The government of India is
being assisted by a number of agencies to identify the areas that are blocking the entry of
the private sector of Indian economy in the arena of infrastructural development, like
regulatory policies, legal procedures etc. The most interesting fact about the private
sector of India economy is that though the overall pace of its development is
comparatively slower than the public sector, still the investment of private sector in the
recent past, i.e. in the first quarter of 1990 registered approximately 56 % which rose to
nearly 71 % in the next quarter, accounting for an increase of 15 %. Certain steps taken
by the Indian government are acting as the stepping stone of the private sector continued
journey to success, include industrial de-licensing, devaluation that was implemented
previously.

The private sector of Indian economy is also adversely affected by the huge number of
permits and enormous time required for the processing of documents to initiate a firm,
however the central government has decided to abolish MRTP Act and incorporate a
Competition Commission of India to bring the public sector and the private sector at the
same platform.

The participation of the private sector of Indian economy is desired by the government of
India for infrastructural development including specific sectors like power, development
of highways and so on. As the contribution of public sector in these sectors have been
arrested due to the shift of the attention of the Indian government to issues like
population increase, industrial growth. The main reasons behind the low contribution of
the private sector in infrastructural development activities are that:

• The small and medium scale companies in the private sector of Indian
economy suffer from lack of finances to welcome the idea of extending their
business to other states or diversify their product range.
 • The private sector of Indian economy also suffer from the absence of
appropriate regulatory structure, to guide the private sector and this speaks for its
unorganized framework
• The unorganized framework of the private sector is interrupting the proper
management of this sector resulting in the slowdown of its development.

Rural Indian economy:

The Rural Economy in India is wholly agriculture based and it is of tremendous

importance because it has vital supply and demand links with the other Indian industries.
Agriculture is the main stay of the Indian economy, as it constitutes the backbone of rural
India which inhabitants more than 70% of total Indian population. The fertility of the soil
has augmented the success of agriculture in India. Further, Rural Economy in India has
been playing an important role towards the overall economic growth and social growth of
India. India has been predominantly an agriculture-based country and it was the only
source of livelihood in ancient time. During prehistoric time when there was no currency
system the India economy system followed barter system for trading i.e. the excess of
agricultural produce were exchanged against other items. The agriculture produce and
system in India are varied and thus offers a wide agricultural product portfolio.

Today, the rural economy in India and its subsequent productivity growth is predicated to
a large extent upon the development of its 700-million strong rural population. The
agricultural economy of India is drafted according to the needs of rural India since
majority of the population lives in about 600,000 small villages. In India, agriculture
accounts for almost 19% of Indian gross domestic products (GDP). The rural section of
Indian population is primarily engaged with agriculture, directly or indirectly. The
Ministry of Agriculture, the Ministry of Rural Infrastructure, and the Planning
Commission of India are the main governing bodies that formulate and implements the
policy related to rural economy in India and its subsequent development for the overall
growth of the Indian economy.

The main agricultural products that controls the fate of the Rural Economy in India are as
follows -

• Food Grains - Rice, Wheat, Pulses, Cereals, Corn, Maize, Rice Bran Extractions,
Sorghum, Soy meal, Suji, Parmal, Lentils, Jowar, Bajra, Chick pea
 Indian economy:

No, it shall survive the storm…We are talking of the Indian Economy – in midst of this
global financial dilemma. It took lot of pressure and effort to reach the place that it is
experiencing now – Indian economy has surely outshined a lot of its peers. Is the Indian
economy still given the title of the ‘lumbering tiger’? Can it never outwit the super-active
dragon?

No doubt that the Indian economy has been treading an exceptional growth path since
the last decade. Being the least hit of all economies, the Indian economy has really
survived the storm of global financial crisis. Rating agencies like, Moody's, have stated
that the strong performance is a resultant factor of renewed growth between India and
China. Growth figures of Indian economy –

• Real Gross Domestic Product (GDP) at factor cost – 6.7% in 2008-09

• Growth of GDP in agriculture, forestry and fishing – 1.6% in 2008-09
• Growth of GDP in industry – 3.9% in 2008-09

But as of now, the Government is undertaking every possible means to restore the India
economic growth to 9% annually. Some other Indian economy growth projections are –

1. World Bank has forecasted an 8% growth for India in 2010

2. Economists predicted a 6.5% growth for 2009–2010
3. Goldman Sachs predicts a 5.8% for 2010
4. The Government has raised the GDP growth forecast to 8.5% for FY11.

Agriculture Sector of Indian Economy

Is one of the most significant part of India. Agriculture is the only means of living for
almost two-thirds of the employed class in India. As being stated by the economic data of
financial year 2006-07, agriculture has acquired 18 percent of India's GDP.

The agriculture sector of India has occupied almost 43 percent of India's geographical
area. Agriculture is still the only largest contributor to India's GDP even after a decline
in the same in the agriculture share of India. Agriculture also plays a significant role in
the growth of socio-economic sector in India.

In the earlier times, India was largely dependent upon food imports but the successive
stories of the agriculture sector of Indian economy has made it self-sufficing in grain
production. The country also has substantial reserves for the same. India depends heavily
on the agriculture sector, especially on the food production unit after the 1960 crisis in
food sector. Since then, India has put a lot of effort to be self-sufficient in the food
production and this endeavor of India has led to the Green Revolution. The Green
Revolution came into existence with the aim to improve the agriculture in India.
The services enhanced by the Green Revolution in the agriculture sector of Indian
economy are as follows:

• Acquiring more area for cultivation purposes

• Expanding irrigation facilities
• Use of improved and advanced high-yielding variety of seeds
• Implementing better techniques that emerged from agriculture research
• Water management
• Plan protection activities through prudent use of fertilizers, pesticides, and
cropping applications

All these measures taken by the Green Revolution led to an alarming rise in the wheat
and rice production of India's agriculture. Considering the quantum leap witnessed by the
wheat and rice production unit of India's agriculture, a National Pulse Development
Programme that covered almost 13 states, was set up in 1986 with the aim to introduce
the improved technologies to the farmers. A Technology Mission was introduced in 1986
right after the success of National Pulse Development Programme to boost the oilseeds
sector in Indian economy. Pulses too came under this programme. A new seed policy was
planned to provide entree to superior quality seeds and plant material for fruits,
vegetables, oilseeds, pulses, and flowers.

The Indian government also set up Ministry of Food Processing Industries to stimulate
the agriculture sector of Indian economy and make it more lucrative. India's agriculture
sector highly depends upon the monsoon season as heavy rainfall during the time leads to
a rich harvest. But the entire year's agriculture cannot possibly depend upon only one
season. Taking into account this fact, a second Green Revolution is likely to be formed to
overcome the such restrictions. An increase in the growth rate and irrigation area,
improved water management, improving the soil quality, and diversifying into high value
outputs, fruits, vegetables, herbs, flowers, medicinal plants, and bio-diesel are also on the
list of the services to be taken by the Green Revolution to improve the agriculture in
India.

The 12th largest economy in the world in terms of the market exchange rate, the Indian economy has come a
long way to become one of the fastest growing economies. In order to have an idea of the various economic
stages, one needs to make an analysis of the Indian economy history.
GDP India Growth Rate

increasing inflation and the intricacies in administering the world's biggest democracy are acting as the
major hurdle in the field of development.

Indian economy in recent years has been consistently performing with flying colors, escalating 9.2% in 2007
and 9.6% in 2006. This uninterrupted expansion is assisted by markets restructuring, huge infusions of FDI,
increasing foreign exchange reserves, boom in both IT and real estate sectors, and a thriving capital market.

The latest reviews of the India GDP growth rate are as under -

• For the first quarter of 2007-08 GDP posted a growth of 9.3% and stood at Rs 7,23,132 crore,
as compared to the consequent quarter of previous fiscal year
• In the quarter of April-June economy of India grew at 9.3%. The progress was triggered by
construction, manufacturing, services and agriculture industries
• For the week concluded July 28, 2007, the yearly inflation rate was 4.45%
• Balance of Payments in India is predicted to remain contended
• Merchandise Exports registered steady growth
• Manufacturing posted 11.95 expansion

INDUSTRY SECTOR
ves. Post 1990s have seen a sea of change in the policy drafting of Indian Industry. The highly
insulated Indian Market were opened to foreign companies and investors. Thus Indian
Industryregistered an impressive growth during the last decade and half. The number of industries in
India have increased substantially in the last fifteen years. Though the main occupation has been agriculture
for the majority of the Indian population, it was realized that India would become a prosperous and a modern
state only with proper industrialization. Therefore different policy were drafted, modified and initiated to build
up an adequate infrastructure for rapid industrialization and improve the Indian industry.

The newly drafted Industry policy fueled rapid increase in the various sectors in all verticals. But the
astronomical growth was observed in the IT, Telecommunication and Pharmaceutical Industry. The Indian
software industry has grew at a massive rate from a mere US $ 150 million in 1991-92 to a staggering US $
5.7 billion (including over $4 billion worth of software exports) in 1999-2000. No other Indian industry has
performed this well against the ever increasing global competition. The telecommunication industry also
marked stupendous growth, so is the pharmaceutical industry. The newly draftedIndustry policy of India has
helped.

The central Government's liberalized Industry outlook envisages rapid and substantial economic growth,
and integration with the global economy and earn a major share in the international market.
The Industrypolicy reforms have reduced the industrial licensing requirements, removed restrictions on
investment and expansion, and facilitated easy access to foreign technology and foreign direct
investment.