THE ECONOMY OF INDIA

The economy of India was under socialism-based policies for an entire generation from the 1950s until the 1980s. The economy was characterized by extensive regulation, protectionism, and public ownership, leading to pervasive corruption and slow growth.Since 1991, the ongoing economic liberalization has moved India towards a capitalist market economy. It has created millions of better paying jobs and a fast-growing middle class.

Agriculture provides livelihood for 60% of Indians. The service sector makes up a further 28% of employment, and industrial sector around 12%. One estimate says that only one in five job-seekers has had any sort of vocational training.The labor force totals half a billion workers. For output, the agricultural sector accounts for 17% of GDP; the service and industrial sectors make up 54% and 29% respectively. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep, goats, poultry and fish. Major industries include textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery and software design.

In 2007, India's GDP was $1.237 trillion, which makes it the twelfth-largest economy in the world or fourth largest by purchasing power adjusted exchange rates. India's nominal per capita income of $1043 is ranked 136th in the world. In the late 2000s, India's growth has averaged 7.5% a year, increases which will double the average income within a decade. Unemployment rate is 7% (2008 estimate).

Indian economic reforms have meant growing trade and globalization. India currently accounts for 1.5% of World trade as of 2007 according to the WTO. According to the World Trade Statistics of the WTO in 2006, India's total merchandise trade (counting exports and imports) was valued at $294 billion in 2006 and India's services trade inclusive of export and import was $143 billion. Thus, India's global economic engagement in 2006 covering both merchandise and services trade was of the order of $437 billion, up by a record 72% from a level of $253 billion in 2004. India's trade has reached a still relatively moderate share 24% of GDP in 2006, up from 6% in 1985.

India has economic disparities at the state level; more market-friendly states have raised living standards faster and higher.Despite sustained high economic growth rate, approximately 80% of Indian population lives on less than $2 a day (PPP), more than double the same poverty rate in China. Even though the Green Revolution ended famines in India, 40% of children under the age of three are underweight and a third of all men and women suffer from chronic energy deficiency.