ECONOMIC

SYSTEM OF INDIA
AND GREECE AND
THEIR TYPES OF
MARKET
 INTRODUCTION

Before the last decade, the 1990's, India was probably on the short list of almost every

economist outside of India of the countries with the worst economic systems. India had and

probably still has a parasitical class of politicians and bureaucrats that micromanage the

economy in the interests of their class. They hypocritically aver that they are doing what they are

doing in the interest of the people of India. There has been some official allegiance to socialism

with a goal of achieving it through Stalinist central planning. The fact that the result has been

some horrible mixture of state capitalism and moribund corporatism is usually attributed to

incompetence and ineptitude on the part of the bureaucracy. The Indian American economist

Jagdish Baghwati of Columbia University remarked that he agreed with the view that "India's

misfortune was to have brilliant economists: an affliction that the Far Eastern super-performers

were spared." The policies implemented by the Government of India before the last decade were

brilliant only in maintaining the power and influence of the bureaucrats. Judged with respect to

an promoting the welfare of the Indian people those policies were ridiculously bad, to the point

of stupidity.

The bureaucracy has been rather competent in generating excuses for the failure of their

policies. One of those exceuses has been that there is a Hindu rate of growth that is significantly

lower than the rate of growth that other countries could achieve. What the bureacrats dare not say

is that in maintaining a pool of economic rents the bureaucrats' policies were an outstanding

success.

The disappointing economic progress in India up to 1990 cannot be attributed to any

shortcoming in talent among the Indian people or the impediments resulting from Indian
cultures. Indians out from under the oppression of the bureaucracy of the Indian Government

have succeeded spectacularly in professions and business.

Probably the misguidance of India development can be attributed to India's first prime

minister, Jawarharlal Nehru. Nehru chose the goal of economic self-sufficiency with economic

development to be achieved by central planning modeled on that of the Soviet Union. By cutting

off imports India gave a protected market to domestic producers. India got domestic production

but it was production of low quality, obsolete products. The policies stifled economic growth and

India, with its high level of population and poverty, could ill afford low rates of economic

growth.
 INDIA’S ECONOMIC SYSTEM

The economy in India today resembles a capitalist economy with certain modifications. Most

economies in the world sit somewhere between a market economy and a centrally planned

economy – India is one of these countries that has a mixed economy with several characteristics

of a market economy. This country tries to change the structure of the capitalist economy to

make it more appropriate for model economy situations. 

As mentioned previously, India is a combination of a Socialist and a Capitalist economy. This

economic system was adopted after Independence with the intention of procuring the advantages

of both systems while avoiding the disadvantages. The productive activities in India are divided

between the government (public sector) and the people (private sector). Some examples of

industries which are placed in the public sector include: the basic industries, the capital good

industries and the heavy industries whereas light industries and consumer goods industries are

placed in the private sector. While the activities of the public sector are guided by welfare, the

activities of the private sector are guided by profit. This creates balance in the economy as it

ensures the acquisition of profit with a high level of public welfare. The public sectors are

completely directed by the government whereas the private sectors are indirectly controlled by

the government.

An economy refers to the way a nation makes economic choices about how the nation will use

its resources to produce and distribute goods and services. The Indian Economy was called an
underdeveloped economy but slowly become a developing economy but is now referred to as the

mixed economy.

An economic system is defined by a way wherein the country’s resources are utilized to produce

goods and services in such a manner that these goods and services are distributed for consumption.

It is a system that involves production, distribution, and consumption of goods and services between

the entities in a particular society.

The economy of India stands as the world’s 12th largest according to the market exchange rates

and is also the 4th largest economy on the basis of Purchasing Power Parity. The Indian Economic

System was based on the basis of Social Democratic policies from the year 1947 to 1991.  
 INDIA’S ECONOMY DATA

2015 2016 2017 2018 2019

Population (million) 1,283 1,300 1,317 1,334 1,352

GDP per capita (USD) 1,633 1,766 2,018 2,023 2,113

GDP (USD bn) 2,096 2,295 2,657 2,699 2,857

Economic Growth (GDP, annual variation in %) 8.0 8.3 7.0 6.1 -  

Consumption (annual variation in %) 7.9 8.1 7.0 7.2 -  

Investment (annual variation in %) 6.5 8.5 7.2 9.8 -  

Industrial Production (annual variation in %) 3.3 4.6 4.4 3.8 -1.2

Public Debt (% of GDP) 68.8 68.7 69.4 69.4 71.9

Money (annual variation in %) 11.5 6.7 21.8 14.3 10.3

Inflation Rate (CPI, annual variation in %, eop) 4.8 3.9 4.3 2.9 5.9

Inflation Rate (CPI, annual variation in %) 4.9 4.5 3.6 3.4 4.8

Inflation (PPI, annual variation in %) -3.6 1.8 2.9 4.3 1.7

Policy Interest Rate (%) 6.75 6.25 6.00 6.25 4.40

Stock Market (annual variation in %) -9.4 16.9 11.3 17.3 -23.8

Exchange Rate (vs USD) 66.25 64.86 65.11 69.19 75.34

Exchange Rate (vs USD, aop) 65.42 67.04 64.46 69.91 70.91

Current Account (% of GDP) -1.1 -0.7 -1.8 -2.1 -  

 2015 2016 2017 2018 2019

Current Account Balance (USD bn) -22.1 -15.2 -48.7 -57.0 -  

Trade Balance (USD billion) -117.3 -108.9 -158.6 -182.3 -153.5

Exports (USD billion) 262 275 305 331 314

Imports (USD billion) 379 384 463 513 467

Exports (annual variation in %) -15.6 5.1 10.6 8.5 -5.1

Imports (annual variation in %) -15.3 1.3 20.5 10.7 -8.9

International Reserves (USD) 356 373 421 414 476

External Debt (% of GDP) 23.1 20.5 19.9 20.1 -  

GROSS DOMESTIC PRODUCT (GDP)

SECTOR-WISE GDP IN INDIA

The services sector is the largest sector of India. Gross Value Added (GVA) at current prices

for the services sector is estimated at 100.46 lakh crore INR in 2019-20. The services sector

accounts for 54.77% of total India's GVA of 183.43 lakh crore Indian rupees. With GVA of Rs.

50.40 lakh crore, the Industry sector contributes 27.48%. While Agriculture and allied sector

share 17.76%.

At 2011-12 prices, the Agriculture & allied, Industry, and Services sector's composition is

14.65%, 30.19%, and 55.17%, respectively.

 Share of primary (comprising agriculture, forestry, fishing, and mining & quarrying),

secondary (comprising manufacturing, electricity, gas, water supply & other utility services, and

construction), and tertiary (services) sectors have been estimated as 19.90 percent, 25.33 percent,

and 54.77 percent.

At previous methodology, the composition of Agriculture & allied, Industry, and Services

sector was 51.81%, 14.16%, and 33.25%, respectively at current prices in 1950-51. Share of

Agriculture & allied sector has declined at 18.20% in 2013-14. Share of Services sector has

improved to 57.03%. Share of Industry sector has also increased to 24.77%.

According to CIA Fackbook, sector-wise Indian GDP composition in 2017 is as follows:

Agriculture (15.4%), Industry (23%), and Services (61.5%). With the production of agriculture

activity of $375.61 billion, India is 2nd larger producer of agriculture products. India accounts

for 7.39 percent of total global agricultural output. India is way behind China, which has $991 bn

GDP in the agriculture sector. GDP of the Industry sector is $560.97 billion, and world rank is 6.

India's world rank is eight in the Services sector, and its GDP is $1500 billion.

The Agriculture sector's contribution to the Indian economy is much higher than the world's

average (6.4%). The industry and services sector's contribution is lower than the world's average

30% for the Industry sector and 63% for the Services sector.
 TYPES OF MARKET

1. Purely Competitive Market

- A purely competitive market is one in which there are a large number of

independent buyers and sellers dealing in standardized products. In pure

competition, the products are standardized because they are either identical to

each other or homogeneous. Moreover, the price of products is same in the entire

market.

2. Perfectly Competitive Market

- In a purely competitive market, there are a large number of buyers and sellers

dealing in homogeneous products. A perfectly competitive market is a wider term

than a purely competitive market. A perfectly competitive market is characterized

by a situation when there is perfect competition in the market.

3. Imperfectly Competitive Market

- In economics terms, imperfectly competition is a market situation under which the

conditions necessary for perfectly competition are not satisfied. In other words.

Imperfectly competition can be defined as a type of market that is free from the

stringent rules of perfect competition.

 GREECE

The Economy of Greece is the 15th largest economy in the 27-member European Union and

the 34th largest country in the world by nominal gross domestic product (2012). A developed

country, Greece economy is based on the service sector (85%) and industry (12%), while the

agricultural sector consists only 3% of the national economic output.

The most important economic industries in Greece are tourism and merchant shipping. In fact,

about 20 million international tourists visit Greece every year, which makes it the 7th most

visited country in the EU and the 16th in the world. As for merchant shipping, Greece has the

largest merchant marine in the world as it covers 16% of the world's total capacity.

In 1982, Greece became a member of the European Community (later European Union). In

January 2002, Euro became the official currency of the country, replacing drachma at an

exchange rate of 340.75 drachmae to euro.

Greece is also a member of the International Monetary Fund, the World Trade Organization,

the Organization for the Economic Co-operation and Development and many other world

financial organizations.

The economy of Greece is the 50st largest in the world with a nominal gross domestic

product (GDP) of $209.857 billion per annum. In terms of purchasing power parity, Greece is the

world's 46th largest economy, at $348.349 billion per annum. As of 2021, Greece is

the fourteenth-largest economy in the 27-member European Union. According to IMF figures for

2021, Greece's GDP per capita is $19,673 at nominal value and $30,495 at purchasing power

parity.
 Greece is a developed country with an economy based on the service (80%)

and industrial sectors (16%), with the agricultural sector contributing an estimated 4% of

national economic output in 2017. Important Greek industries include tourism and shipping.

With 18 million international tourists in 2013, Greece was the 7th most visited country in the

European Union and 16th in the world. The Greek Merchant Navy is the largest in the world,

with Greek-owned vessels accounting for 15% of global deadweight tonnage as of 2013. The

increased demand for international maritime transportation between Greece and Asia has

resulted in unprecedented investment in the shipping industry.

The country is a significant agricultural producer within the EU. Greece has the largest

economy in the Balkans and is as an important regional investor. Greece was the largest foreign

investor in Albania in 2013, the third in Bulgaria, in the top-three in Romania and Serbia and the

most important trading partner and largest foreign investor in North Macedonia. The Greek

telecommunications company OTE has become a strong investor in certain former Yugoslav and

other Balkan countries.

 GREECE ECONOMIC GROWTH

The economy is seen rebounding strongly in 2021, supported by reviving private and capital

spending and incoming EU funding. Moreover, the gradual easing of Covid-19 restrictions

globally should bolster the crucial tourism industry. That said, the banking sector’s high ratio of

non-performing loans and the country’s massive public debt pose key downside risks.

FocusEconomics panelists see GDP growing 5.1% in 2021, which is down 0.1 percentage points

from last month’s projection. In 2022 the panel sees the economy expanding 4.0%.

GREECE ECONOMY DATA

2015 2016 2017 2018 2019

Population (million) 10.9 10.8 10.8 10.7 10.7

GDP per capita (EUR) 16,325 16,366 16,737 17,197 17,497

GDP (EUR bn) 177 176 180 185 187

Economic Growth (GDP, annual variation in %) -0.5 -0.3 1.4 1.9 1.9

Domestic Demand (annual variation in %) -1.4 0.5 1.6 0.4 1.0

Consumption (annual variation in %) -0.3 0.1 0.9 0.9 0.7

Investment (annual variation in %) 0.6 4.6 9.4 -12.0 4.5

Exports (G&S, annual variation in %) 2.8 -1.9 6.9 8.7 4.9

Imports (G&S, annual variation in %) 0.4 1.1 7.4 3.0 2.5

Industrial Production (annual variation in %) 2.3 2.6 3.9 1.6 -0.8

 2015 2016 2017 2018 2019

Retail Sales (annual variation in %) -1.5 -0.6 1.3 1.4 0.8

Unemployment Rate 25.0 23.6 21.5 19.3 17.3

Fiscal Balance (% of GDP) -5.6 0.5 0.7 1.0 1.5

Public Debt (% of GDP) 176 179 176 181 177

Inflation Rate (HICP, annual variation in %, eop) 0.4 0.3 1.0 0.6 1.1

Inflation Rate (HICP, annual variation in %) -1.1 0.0 1.1 0.8 0.5

Inflation (PPI, annual variation in %) -7.2 -5.7 5.3 4.3 0.4

Policy Interest Rate (%) -   -   -   -   -  

Stock Market (annual variation in %) -23.6 2.0 24.7 -23.6 49.5

Exchange Rate (vs USD) -   -   -   -   -  

Exchange Rate (vs USD, aop) -   -   -   -   -  

Current Account (% of GDP) -0.8 -1.7 -1.9 -2.8 -1.4

Current Account Balance (EUR bn) -1.4 -3.1 -3.4 -5.2 -2.6

Trade Balance (EUR billion) -17.7 -18.0 -19.8 -22.5 -22.8

 GREECE: ECONOMY

Income Level
High Income
(by per capita GNI) 

Level of
Developed
Development 

Greece has a capitalist economy with a public sector

Economic Trivia accounting for about 40% of GDP and with per capita GDP
about two-thirds that of the leading euro-zone economies.

Top 3 Trade Partners (2019): Germany, Italy, and China

Trade  Top 3 Exported Goods (2019): Oil & Mineral Fuels,
Pharmaceuticals, and Industrial Machinery

Tourism; Food and Tobacco Processing; Textiles;

Top Industries 
Chemicals

GROSS DOMESTIC PRODUCT (GDP)

 GDP COMPOSITION %

ECONOMIC INDICATORS

LABOR AND EMPLOYMENT

TRADE