Indian Economy v/s American Economy

A Comparative Statement

Economy

An economy is a spatially limited and social network where goods and services are exchanged according to demand and supply between participants by barter or a medium of exchange with a credit or debit value accepted within the network. An economy consists of the economic system of a country or other area, the labour, capital and land resources, and the economic agents that socially participate in the production, exchange, distribution, and consumption of goods and services of that area. A given economy is the end result of a process that involves its technological evolution, history and social organization, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions Today the range of fields of study examining the economy revolve around the social science of economics, but may include sociology (economic sociology), history (economic history), anthropology

(economic anthropology), and geography (economic geography). Practical fields directly related to the human activities involving production, distribution, exchange, and consumption of goods and services as a whole, range from engineering to management and business administration to applied science to finance.

All professions, occupations, economic agents or economic activities, contribute to the economy. Consumption, saving, and investment are core variable components in the economy and determine market equilibrium. There are three main sectors of economic activity: primary, secondary, and tertiary.

Overview of Indian Economy:

India's economy was governed by Social democratic policies from 1947 to 1991. The economy was characterised by extensive regulation, protectionism, public ownership, pervasive corruption and slow growth. Since 1991, continuing economic liberalisation has moved the country towards a market-based economy. A revival of economic reforms and better economic policy in first decade of the 21st century accelerated India's economic growth rate. In recent years, Indian cities have continued to liberalise business regulations. By 2008, India had established itself as the world's second-fastest growing major economy. However, as a result of the financial crisis of 20072010, coupled with a poor monsoon, India's gross domestic product (GDP) growth rate significantly slowed to 6.7% in 200809, but subsequently recovered to 7.4% in 200910, while the fiscal deficit rose from 5.9% to a high 6.5% during the same period. Indias current account deficit surged to 4.1% of

GDP during Q2 FY11 against 3.2% the previous quarter. The unemployment rate for 20092010, according to the state Labour Bureau, was 9.4% nationwide, rising to 10.1% in rural areas, where twothirds of the 1.2 billion population live.

India's large service industry accounts for 57.2% of the country's GDP while the industrial and agricultural sectors contribute 28.6% and 14.6% respectively. Agriculture is the predominant occupation in India, accounting for about 52% of employment. The service sector makes up a further 34%, and industrial sector around 14%.However, statistics from a 2009-10 government survey, which used a smaller sample size than earlier surveys, suggested that the share of agriculture in employment had dropped to 45.5%. Major industries include telecommunications, textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, information technology-enabled services and

pharmaceuticals. The labour force totals 500 million workers. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep, goats, poultry and fish. In 2009-2010, India's top five trading partners are United Arab Emirates, China, United States, Saudi Arabia and Germany.

Overview of US Economy:
A central feature of the U.S. economy is the economic freedom afforded to the private sector by allowing the private sector to make the majority of economic decisions in determining the direction and scale of what the U.S. economy produces. This is enhanced by relatively low levels of regulation and government involvement, as well as a court system that generally protects property rights and enforces contracts. Today, the United States is home to 29.6 million small businesses, 30% of the world's millionaires, 40% of the world's billionaires, as well as 139 of the world's 500 largest companies. From its emergence as an independent nation, the United States has encouraged science and innovation. As a result, the United States has been the birthplace of 161 of Britannica's 321 Great Inventions, including items such as the airplane, internet, microchip, laser, cell phone, refrigerator, email, microwave, LCD and LED technology, air conditioning, assembly line, supermarket, bar code, electric motor, and ATM.

The number of workers and, more importantly, their productivity help determine the health of the U.S. economy. Throughout its history, the United States has experienced steady growth in the labor force, a phenomenon that is both cause and effect of almost constant economic expansion. Until shortly after World War I, most workers were immigrants from Europe, their immediate descendants, or Africano Americans who were mostly slaves taken from Africa, or slave descendants. Beginning in the early 20th century, many Latin Americans immigrated; followed by large numbers of Asians following removal of nation-origin based immigration quotas.The promise of high wages brings many highly skilled workers from around the world to the United States. Over 13 million people entered the United States during the 1990s alone. Labor mobility has also been important to the capacity of the American economy to adapt to changing conditions.[citation needed] When immigrants flooded labor markets on the East Coast, many workers moved inland, often to farmland waiting to be tilled. Similarly, economic opportunities in industrial, northern cities attracted black Americans from southern farms in the first half of the 20th century, in what was known as the Great Migration.

In the United States, the corporation has emerged as an association of owners, known as stockholders, who form a business enterprise governed by a complex set of rules and customs. Brought on by the process of mass production, corporations, such as General Electric, have been instrumental in shaping the United States. Through the stock market, American banks and investors have grown their economy by investing and withdrawing capital from profitable corporations. Today in the era of globalization, American investors and corporations have influence all over the world. The American government is also included among the major investors in the American economy. Government investments have been directed towards public works of scale (such as from the Hoover Dam), military-industrial contracts, and the financial industry While consumers and producers make most decisions that mold the economy, government has a powerful effect on the U.S. economy in at least four areas, as the government uses a capitalist system. Strong government regulation in the U.S. economy started in the early 1900s with the rise of the Progressive Movement; prior to this the government promoted economic growth through protective tariffs and subsidies to industry, built infrastructure, and established banking policies, including the gold standard, to encourage savings and investment in productive

enterprises. On June 26, 2009, Jeff Immelt, the CEO of General Electric, called for the United States to increase its manufacturing base employment to 20% of the workforce, commenting that the U.S. has outsourced too much in some areas and can no longer rely on the financial sector and consumer spending to drive demand.

Statistics of Indian and US Economy:

India Rank Currency Fiscal Year GDP GDP Growth GDP per capita GDP By Sector 10 Indian Rupee (INR) 1 April-31 March $1.53 trillion 8.5% (2010-2011) $ 1,265 Services (55.3%), industry (28.6%), Inflation Population Below Poverty Line Labour Force Labour Force By Occupation agriculture (16.1%) 9.44% 37% 478 million Agriculture (52%), industry (14%), services (34%)
th

United States of America 1st US Dollar ($) October 1-September 30 $14.772 trillion 2.8%(2010-2011) $ 47,275 Agriculture: (1.2%), industry: (21.9%), services: (76.9%) 2.1% 14.3% 154.5 million farming, forestry, and fishing: 0.7% manufacturing, extraction, transportation, and

crafts: 20.3% managerial, professional, and technical: 37.3% sales and office: 24.2% other Unemployment Exports Imports Public Debt Revenues Expenses Economic Aid Foreign Reserves 9.4% $ 247.4 billion $359.3 billion $758 billion ( 55.9% of GDP) $170.7 billion $268 billion $2.107 billion $319 billion services: 17.6% 9.2% $ 1.28 trillion $1.948 trillion $14.77 trillion (100% of GDP) $2.162 trillion $3.456 trillion $19 billion $140.607 billion