Indian Economy

India is the sixth-largest economy (by nominal GDP) in the world.

Economists categories India as a newly industrialized country (NIC).
India is a mixed economy. In India, most of the labour force is
employed in the agriculture and industry sectors.
The developing countries whose economy is growing at a much
higher pace than the other developing countries are called NIC.
Like all the modern economies, India is a mixed economy. Mixed
economies have characteristics of
both capitalist and socialist economies. In India, citizens are free
to choose their profession and start a business of their liking in
any sector. However, there are a few exceptions. Sectors like
defense, power, and banking are highly regulated by the Indian
government. This means that government-owned organizations
exist along with privately-owned entities. Adopting the mixed
economy proved to be advantageous to India in terms of
economic freedom, citizen welfare, and resource allocation
 Features and Problems
Important Features of the Indian Economy:
•Low per capita income. India is known worldwide as a country
with low per capita income.
•Intense Demographic pressure.
•Poverty and Inequality.
•Agriculture-centric economy.
•Higher rate of formation of capital.
•Planned economy.
 Features and Problems
Problems Faced By Indian Economy:
•Unemployment. ...
•Poor educational standards. ...
•Poor Infrastructure. ...
•Balance of Payments deterioration. ...
•High levels of private debt. ...
•Inequality has risen rather than decreased. ...
•Large Budget Deficit. ...
•Rigid labour Laws.
 Changing Dimension of Indian
Business Enviorment

The business environment is the most critical part of any

organisation that includes many internal and external entities such
as suppliers, competitors, the media, the government, customers,
economic conditions, investors, and so on that together make up
the business environment.
Customer demands, Employees, expectations, management,
clients, supply and demand, suppliers, technological innovation,
economic changes, owners, government actions, market trends,
social trends, and so on together form the changing dimensions of
the business environment.
 Features of Business Environment
• The external forces totality
• General and specific forces
• Inter-relatedness
• Dynamic nature
 Dimensions of Business Environment
• Legal Environment
• Political environment
• Technological environment
• Social environment
• Economic environment
 Indian Dimensions
• Prior to liberalisation, India’s growth rate was
around 3.5%.
• After 1991 privatisation,blic sector made an
improvement in efficiency and investments.
• Green revolution and establishment of industries
in rural areas has developed our villages.
• After achieving 9% of growth rate in 2007, India
became the fastest growing economy today.
• CSR responsibilities has been made mandatory
after 2014 in India.
• Banking, financial, service and insurance India r
has become competitive after globalisation.
• It is the second largest two wheeler market in
world, many foreign manufacturers have set up
their plant in India.
 Role of Public and Private
sector
Public Sector:
The primary objectives of the public sector are to provide basic
goods and services to the citizens, promote economic
development, and protect the interests of weaker sections of
society.
Private Sector:
The private sector's role is integral to an economy's development.
The private sector delivers vital goods and services, contributes
to tax revenues and ensures the efficient flow of capital.
 Problems in Public sector

Major Problems of Public Sector:

•Inefficient Management.
•Lack of Innovations.
•Mounting Losses.
•Political Interference.
•Time and Cost Over-Runs.
•Problems of Autonomy and Control.
•Problems of Price Policy.
•Over Staffing.
 Globalization
Globalization is a term used to describe how trade and
technology have made the world into a more connected and
interdependent place. Globalization also captures in its scope the
economic and social changes that have come about as a result.
A manufacturer assembling a product for a distant market, a
country submitting to international law, and a language adopting
a foreign loanword are all examples of globalization.
 Privatization and Liberalization
and its impact on Indian Economy
Privatization:
The transfer of ownership, property or business from the
government to the private sector is termed privatization. The
government ceases to be the owner of the entity or business. The
process in which a publicly-traded company is taken over by a
few people is also called privatization.
Liberalization:
Liberalization is the process or means of the elimination of
control of the state over economic activities. It provides a greater
autonomy to the business enterprises in decision-making and
eliminates government interference.
Privatization and Liberalization and its impact on Indian
Economy
1. Increase in the Direct Foreign Investment: The policy of
liberalization has resulted in a tremendous increase in the direct
foreign investment in the industrial and infrastructural sector
(roads and electricity).
2. Enhancement in the Growth of GDP: There is a significant
growth in the Gross Domestic Product (GDP).
An increase in the country's per capita income.
In 1991, the Per capita Income of India was ₹11,235, but in 2014-
15 Per Capita Income reached ₹85,533. Increase in Foreign
Direct Investment from ₹408 Crores in 1991 to ₹106,693 Crores
in 2015 after the introduction of the new economic reforms.
 Recent Trends in Indian
Economy
The Indian economy has remained resilient and is on track to
grow by seven percent in the FY 2023 despite the ongoing global
headwinds caused by external factors like post-pandemic
spillovers, supply chain disruptions due to the ongoing Russia-
Ukraine conflict, and potential recessionary pressures facing
developed economies. This resilience can be attributed to large
domestic markets, coupled with consistent efforts on the part of
the government to strengthen the supply side through reforms like
PLI schemes, national logistic reforms, fostering ease of doing
business through digitization, etc. This article outlines measures
aiding India’s business climate and highlights the main
macroeconomic trends and prospects surrounding the Indian
economy in 2023.
 Dis-investment

Disinvestment in India is a policy of the Government of India,

wherein the Government liquidates its assets in the Public sector
Enterprises partially or fully. The decision to disinvest is mainly
to reduce the fiscal burden and bridge the revenue shortfall of the
government.
In August 1996, the Disinvestment Commission, chaired by G V
Ramakrishna was set up to advice, supervise, monitor and
publicize gradual disinvestment of Indian PSUs.