List of important facts related to Indian economy:
Indian Economy Trivia: The Indian economy is the fourth largest economy in the world on the basis of purchasing power parity. India is the seventh largest country in the world in terms of area and the second largest in terms of population. It is one of the most attractive destinations for business and investment opportunities because of the fundamentals of huge manpower base, diverse natural resources and strong macro economy.
The process of economic reforms initiated in the year 1991 has been providing an investor friendly environment through liberalization of the policy framework spread throughout the economy. It has been 70 years since India became independent and during this time there has been a tremendous change in the condition of the Indian economy. Industrial development has changed the face of the economy. Today India is counted among the fastest growing economies of the world. India's role in driving the world economy is increasing. The whole world considers India as the iron in the IT sector.
History of Indian Economy:
India was once known as the golden bird. According to economic historian Angus Maddison, India's economy was the largest economy in the world from the first century to the tenth century. India's gross domestic product (GDP) in the first century was 32.9% of the total GDP of the world; In 2000 it was 28.9%; And in 1700 it was 24.4%.India's economy was heavily exploited and exploited during the British period, as a result of which, at the time of independence in 1947, the Indian economy remained just a ruin of its golden history.
Features of Indian Economy:
After independence, the basic economic structure of the country has become more powerful. There has been substantial progress in quantitative terms. However, the annual growth rate was 9.6% in 2006-07, which was announced on the 31st anniversary. The salient features and various aspects of the Indian economy are given below.
- Agricultural Economy: Even after 60 years of independence, 58.4% of India's work force is still agriculturist and its contribution to GDP is around 21%.
- Mixed Economy: Indian economy is a unique mix of public and private sector, that is, mixed economy. Throughout its plan period, the government invested 45% of capital in the public sector. However, the major sources of production and resources are still in the hands of the private sector (about 80%). After liberalisation, the Indian economy is moving forward as a capitalist economy or a market economy.
- Developing Economy: The following facts suggest that the Indian economy is a developing economy:
- The national income of Indian is very low on international standards and per capita income is very low in Indian as compared to other developed countries. The per capita income of Indian is about 1/75 of the US level of per capita income.
- 26.1% of the population is still living below the poverty line.
- Unemployment level is very high. Unemployment in India is mainly structural in nature as the productive capacity is insufficient to generate sufficient number of jobs. There is an acute problem of disguised unemployment in rural areas. A person is considered employed if he works for eight hours every day for 273 days in a year.
- Savings are low in India due to low national income and high consumption expenditure. Low savings leads to a decrease in capital formation. Capital is an important factor of production. There is a shortage of capital and resources, although during recent years, the household savings rate has remained at 26%.
- India is the second most populous country in the world. The population increased by 21.34% during 1991-2001. With this high growth rate of population, about 1.7 crore new people are being added to the population of India every year. According to the 2001 census, the total population of India is as high as 1027 million, which is 16.7% of the world's total population. India has only 2.42% of the total land area of the world to maintain 16.7% of the world population.
Indian Economy Important Economic Terms: What is Monetary Policy?
The policy according to which the monetary authority of a country regulates the money supply is called monetary policy. Its purpose is to ensure economic development and economic stability of the state. Monetary policy as either an expansionary policy increases the total money supply in the economy more rapidly than normal. Monetary Rates:
- CRR(Cash Reserve Ratio): CRR It is the money that banks have to keep with the Reserve Bank of India in the form of guarantees.
- Bank Rate: The rate at which the Reserve Bank lends to commercial banks is called Bank Rate.
- Statutory Liquidity Ratio (SLR): To meet any emergency liability, commercial banks deposit a certain amount with the Reserve Bank in the form of their daily business cash, gold and investment in government securities, which is called SLR. It is said
- Repo Rate: Repo rate is the rate at which banks get loans from the Reserve Bank for a short period. Lowering the repo rate makes it easier for banks to get loans.
- Reverse Repo Rate: The rate at which banks get interest after depositing their money with the Reserve Bank is reverse repo rate.
Other important general knowledge information related to Indian economy:
- Lead Bank Scheme: This scheme was started in 1969 with the objective of improving the economy of the districts. Under which there will be a lead bank in each district, which will establish coordination between financial institutions through programs along with the assistance of other banks.
- Performance Budget: The budget prepared on the basis of results or performance of works is performance budget, it is also called performance budget.
- Zerobase Budget: In this budget, every item of the proposed expenditure demand of a department or organization is re-evaluated considering it as zero. In India, it was first implemented in the "Council of Scientific and Industrial Research (CISR)" and was implemented in all departments and ministries from 1987-88.
- Outcome Budget: Under this, the physical targets of each department/ministry are kept for inspection and evaluation in the short term.
- Gender Budget: Through this budget, the government makes a provision of a certain amount every year in the budget for the implementation of programs and schemes being run for the welfare and empowerment of women.
- Direct Tax: The tax in which there is a direct relationship between the tax setter (government) and the taxpayer. That is, the person on whom tax is being levied directly pays it.
- Indirect Tax: A tax in which there is no direct relationship between the tax setter (government) and the payer, i.e. the person/entity on whom the tax is levied is received in some other way.
- Revenue Deficit: Revenue deficit is the difference between the total revenue received by the government and the total revenue spent by the government.
- Fiscal Deficit: The total revenue received for the government, grants and non-capital receipts compared to the total expenditure, i.e. how much the expenditure is in relation to the income (receipts).
- Bonds or Debentures: There are such debt papers which are issued by the Central Government, State Government, or any institution, on these debt papers, interest is received at a fixed rate for a fixed period.
- Security: The term security is used collectively for financial assets such as shares, debentures, and other debentures. In banking also, the word security is used in the context of the collateral of loans.
List of important facts related to Indian economy:
| The most urbanized state in India is | Maharashtra |
| In terms of GDP, Indian economy ranks first in the world | 12th |
| India's economy ranks in the world on the basis of purchasing power | Fourth |
| Has given the principle of consumer savings | Alfred Marshall |
| Has given the 'Big Push Theory' | Rodan |
| Related to co-operative movement | Mirdha Committee |
| Major countries investing in India are | America and Britain |
| There is a committee constituted in 1991 to give suggestions for tax reform. | Chelliah Committee |
| The 'National Institute of Rural Development' was established in 1977 | Hyderabad |
| Comes under the primary sector of the Indian economy | Agriculture |
| Comes under the secondary sector of the Indian economy | Industry, Electricity and Construction work |
| Comes under the tertiary sector of the Indian economy | Trade, transport, communication and service |
| Is called a mixed economy | Co-existence of private and public sectors |
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Indian Economy FAQs:
In a closed economy, GDP is always equal to Gross National Product. A closed economy is completely self-sufficient, which means that no imports come into the country and no exports go out of the country.
After achieving a growth rate of 8.4 per cent in each of the previous two years, Indian industries grew at 6.9 per cent in 2011-12.
Agriculture is the most important sector of Indian industry. It accounts for 18 per cent of India's Gross Domestic Product (GDP) and provides employment to 50 per cent of the country's workforce.
Mixed economy is a system in which the public and private sectors co-exist under one roof which aggregates the benefits of both socialism and capitalism.
Parallel economy is based on black money or hidden money. 'Black money' is defined as assets or resources that have not been reported to public authorities at the time of production, nor have they been disclosed at any time during their possession.