The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry and fishing, mining, and extraction of oil and gas. This is contrasted with the secondary sector, producing manufactures and other processed goods, and the tertiary sector, producing services. The primary sector is usually most important in less developed countries, and typically less important in industrial countries.
The manufacturing industries that aggregate, pack, package, purify or process the raw materials close to the primary producers are normally considered part of this sector, especially if the raw material is unsuitable for sale or difficult to transport long distances.  Primary industry is a larger sector in developing countries; for instance, animal husbandry is more common in Africa than in Japan.  Mining in 19th century South Wales is a case study of how an economy can come to rely on one form of business.
 Canada is unusual among developed countries in the importance of the primary sector, with the logging and oil industries being two of Canada's most important. Contents * 1 Agriculture * 2 List of countries by agricultural output * 3 See also * 4 References * 5 Further reading|  Agriculture Economic sectors| Three-sector hypothesis| Primary sector: raw materials Secondary sector: manufacturing Tertiary sector: services| Theorists| Colin Clark · Jean Fourastie| Additional sectors| Quaternary sector · Quinary sector| Sectors by ownership|
Business sector · Private sector · Public sector · Voluntary sector| * v * t * e| In developed countries primary industry becomes more technologically advanced, for instance the mechanization of farming as opposed to hand picking and planting. In more developed economies additional capital is invested in primary means of production. As an example, in the United States corn belt, combine harvesters pick the corn, and spray systems distribute large amounts of insecticides, herbicides and fungicides, producing a higher yield than is possible using less capital-intensive techniques.
These technological advances and investment allow the primary sector to require less workforce and, this way, developed countries tend to have a smaller percentage of their workforce involved in primary activities, instead having a higher percentage involved in the secondary and tertiary sectors.  Developed countries are allowed to maintain and develop their primary industries even further due to the excess wealth. For instance, European Union agricultural subsidies provide buffers for the fluctuating inflation rates and prices of agricultural produce.
This allows developed countries to be able to export their agricultural products at extraordinarily low prices. This makes them extremely competitive against those of poor or underdeveloped countries that maintain free market policies and low or non-existent tariffs to counter them.  Such differences also come about due to more efficient production in developed economies, given farm machinery, better information available to farmers, and often larger scale.  List of countries by agricultural output Main article: List of countries by GDP sector composition
Global agricultural output from 1970 to 2008. This time covers the effects of the Green Revolution. Below is a list of countries by agricultural output in 2011. Agricultural output in 2011| Rank| Country| Output in billions of US$| Composition of GDP (%)| % of Global Agricultural Output| —| World| 4,130. 689| 5. 9%| 100. 0%| 1| China| 670. 893| 9. 6%| 16. 2%| 2| India| 333. 652| 18. 1%| 8. 1%| —| European Union| 323. 284| 1. 8%| 7. 8%| 3| United States| 180. 778| 1. 2%| 4. 4%| 4| Brazil| 146. 040| 5. 8%| 3. 5%| 5| Indonesia| 124. 316| 14. 9%| 3. 0%| 6| Nigeria| 87. 483| 35.
4%| 2. 1%| 7| Japan| 81. 975| 1. 4%| 2. 0%| 8| Russia| 79. 166| 4. 2%| 1. 9%| 9| Turkey| 70. 205| 9. 2%| 1. 7%| 10| Australia| 60. 296| 4. 0%| 1. 5%| 11| Iran| 53. 206| 11. 2%| 1. 3%| 12| Spain| 50. 704| 3. 3%| 1. 2%| 13| France| 47. 741| 1. 7%| 1. 2%| 14| Mexico| 46. 223| 3. 9%| 1. 1%| 15| Pakistan| 44. 125| 21. 6%| 1. 1%| 16| Argentina| 43. 518| 10. 0%| 1. 1%| 17| Italy| 42. 668| 1. 9%| 1. 0%| 18| Thailand| 41. 406| 12. 2%| 1. 0%| 19| South Korea| 34. 915| 3. 0%| 0. 8%| 20| Canada| 33. 415| 1. 9%| 0. 8%| -| | | | | Economy of India From Wikipedia, the free encyclopedia
Jump to: navigation, search Economy of The Republic of India| Modern Indian currency notes| Rank| 9th (nominal) / 3rd (PPP)| Currency| 1 Indian Rupee (INR) () = 100 Paise| Fiscal year| 1 April – 31 March| Trade organizations| WTO, SAFTA, G-20 and others| Statistics| GDP| $1. 846 trillion (nominal: 9th; 2011)$4. 469 trillion (PPP: 3rd; 2011)| GDP growth| 8. 5% (2009-10)| GDP per capita| $1,527 (nominal: 135th; 2011)$3,703 (PPP: 127th; 2011)| GDP by sector| agriculture: 18. 1%, industry: 26. 3%, services: 55. 6% (2011 est. )| Inflation (CPI)| 6. 95% (February 2012)|
Population below poverty line| 37% (2010) (Note:42% live less than $1. 25 a day)| Gini coefficient| 36. 8 (List of countries)| Labour force| 487. 6 million (2011 est. )| Labour force by occupation| agriculture: 52%, industry: 14%, services: 34% (2009 est. )| Unemployment| 9. 8% (2011 est. )| Average gross salary| $1,533 yearly (2011)| Main industries| telecommunications, textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals| Ease of Doing Business Rank| 132nd (2011)|
External| Exports| $298. 2 billion (2011 est. )| Export goods| petroleum products, precious stones, machinery, iron and steel, chemicals, vehicles, apparel| Main export partners| US 12. 6%, UAE 12. 2%, China 8. 1%, Hong Kong 4. 1% (2010)| Imports| $451 billion (2011 est. )| Import goods| crude oil, precious stones, machinery, fertilizer, iron and steel, chemicals| Main import partners| China 12. 4%, UAE 6. 5%, Saudi Arabia 5. 8%, US 5. 7%, Australia 4. 5% (2010)| FDI stock| $19. 42 billion (2010-11)| Gross external debt| $267.
1 billion (31 December 2011 est. )| Public finances| Public debt| 62. 43% of GDP (2011 est. )| Budget deficit| 4. 8% of GDP (2010-11)| Revenues| $218. 7 billion (2011 est. )| Expenses| $311. 2 billion (2011 est. )| Economic aid| $2. 107 billion (2008)| Credit rating| BBB- (Domestic) BBB- (Foreign) BBB+ (T&C Assessment) Outlook: Stable (Standard & Poor's)| Foreign reserves| $292. 7 billion (Jan 2012)| Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars| "Dollar" and "$" refer throughout to the US dollar.
The Economy of India is the ninth largest in the world by nominal GDP and the third largest by purchasing power parity (PPP).  The country is one of the G-20 major economies and a member of BRICS. In 2011, the country's GDP PPP per capita was $3,703 IMF, 127th in the world, thus making a lower-middle income economy.  The independence-era Indian economy (before and a little after 1947) was inspired by the Soviet model of economic development, with a large public sector, high import duties combined with interventionist policies, leading to massive inefficiencies and widespread corruption.
However, later on India adopted free market principles and liberalized its economy to international trade under the guidance of Manmohan Singh, who then was the Finance Minister of India under the leadership of P. V. Narasimha Rao the then Prime Minister. Following these strong economic reforms, the country's economic growth progressed at a rapid pace with very high rates of growth and large increases in the incomes of people.  India recorded the highest growth rates in the mid-2000s, and is one of the fastest-growing economies in the world.
The growth was led primarily due to a huge increase in the size of the middle class consumer, a large labor force and considerable foreign investments. India is the fourteenth largest exporter and eleventh largest importer in the world. Economic growth rates are projected at around 6. 9% for the 2011-12 fiscal year.  Contents * 1 Overview * 2 History * 2. 1 Pre-colonial period (up to 1773) * 2. 2 Colonial period (1773–1947) * 2. 3 Pre-liberalisation period (1947–1991) * 2. 4 Post-liberalisation period (since 1991) * 3 Sectors * 3. 1 Industry and services * 3. 2 Agriculture * 3. 3 Banking and finance * 3.
4 Energy and power * 3. 5 Infrastructure * 4 External trade and investment * 4. 1 Global trade relations * 4. 2 Balance of payments * 4. 3 Foreign direct investment * 5 Currency * 6 Income and consumption * 7 Employment * 8 Economic trends and issues * 8. 1 Agriculture * 8. 2 Corruption * 8. 3 Education * 8. 4 Infrastructure * 8. 5 Economic disparities * 9 See also * 10 Notes * 11 References * 12 Further reading * 13 External links|  Overview A combination of protectionist, import-substitution, and Fabian socialist-inspired policies governed India for sometime after India's Independence from the British.
The economy was then 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 one of the world's, fastest growing economy. Growth significantly slowed to 6.
79% in 2008–09, but subsequently recovered to 7. 4% in 2009–10, while the fiscal deficit rose from 5. 9% to a high 6. 5% during the same period.  India’s current account deficit surged to 4. 1% of GDP during Q2 FY11 against 3. 2% the previous quarter. The unemployment rate for 2010-11, according to the state Labour Bureau, was 9. 8% nationwide.  As of 2011, India's public debt stood at 62. 43% of GDP which is highest among the emerging economies.  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 Rural 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, software 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. Previously a closed economy, India's trade and business sector has grown fast.  India currently accounts for 1. 5% of world trade as of 2007 according to the World Trade Statistics of the WTO in 2006, which valued India's total merchandise trade (counting exports and imports) at $294 billion and India's services trade at $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 total trade in goods and services has reached a share of 43% of GDP in 2005–06, up from 16% in 1990–91.  India's total merchandisee trade (counting exports and imports) stands at $ 606. 7 billion and is currently the 9th largest in the world.  History Main articles: Economic history of India and Timeline of the economy of India  Pre-colonial period (up to 1773)
The citizens of the Indus Valley civilisation, a permanent settlement that flourished between 2800 BC and 1800 BC, practiced agriculture, domesticated animals, used uniform weights and measures, made tools and weapons, and traded with other cities. Evidence of well-planned streets, a drainage system and water supply reveals their knowledge of urban planning, which included the world's first urban sanitation systems and the existence of a form of municipal government. 
The spice trade between India and Europe was the main catalyst for the Age of Discovery.  Maritime trade was carried out extensively between South India and southeast and West Asia from early times until around the fourteenth century AD. Both the Malabar and Coromandel Coasts were the sites of important trading centres from as early as the first century BC, used for import and export as well as transit points between the Mediterranean region and southeast Asia.  Over time, traders organised themselves into associations which received state patronage.
However, state patronage for overseas trade came to an end by the thirteenth century AD, when it was largely taken over by the local Parsi, Jewish and Muslim communities, initially on the Malabar and subsequently on the Coromandel coast.  Further north, the Saurashtra and Bengal coasts played an important role in maritime trade, and the Gangetic plains and the Indus valley housed several centres of river-borne commerce. Most overland trade was carried out via the Khyber Pass connecting the Punjab region with Afghanistan and onward to the Middle East and Central Asia.
 Although many kingdoms and rulers issued coins, barter was prevalent. Villages paid a portion of their agricultural produce as revenue to the rulers, while their craftsmen received a part of the crops at harvest time for their services.  Assessment of India's pre-colonial economy is mostly qualitative, owing to the lack of quantitative information. The Mughal economy functioned on an elaborate system of coined currency, land revenue and trade. Gold, silver and copper coins were issued by the royal mints which functioned on the basis of free coinage.
 The political stability and uniform revenue policy resulting from a centralised administration under the Mughals, coupled with a well-developed internal trade network, ensured that India, before the arrival of the British, was to a large extent economically unified, despite having a traditional agrarian economy characterised by a predominance of subsistence agriculture dependent on primitive technology.  After the decline of the Mughals, western, central and parts of south and north India were integrated and administered by the Maratha Empire.
After the loss at the Third Battle of Panipat, the Maratha Empire disintegrated into several confederate states, and the resulting political instability and armed conflict severely affected economic life in several parts of the country, although this was compensated for to some extent by localised prosperity in the new provincial kingdoms.  By the end of the eighteenth century, the British East India Company entered the Indian political theatre and established its dominance over other European powers.
This marked a determinative shift in India's trade, and a less powerful impact on the rest of the economy.   Colonial period (1773–1947) An aerial view of Calcutta Port taken in 1945. Calcutta, which was the economic hub of British India, saw increased industrial activity during World War II. There is no doubt that our grievances against the British Empire had a sound basis. As the painstaking statistical work of the Cambridge historian Angus Maddison has shown, India's share of world income collapsed from 22. 6% in 1700, almost equal to Europe's share of 23.
3% at that time, to as low as 3. 8% in 1952. Indeed, at the beginning of the 20th century, "the brightest jewel in the British Crown" was the poorest country in the world in terms of per capita income. — Manmohan Singh Company rule in India brought a major change in the taxation and agricultural policies, which tended to promote commercialisation of agriculture with a focus on trade, resulting in decreased production of food crops, mass impoverishment and destitution of farmers, and in the short term, led to numerous famines.
 The economic policies of the British Raj caused a severe decline in the handicrafts and handloom sectors, due to reduced demand and dipping employment.  After the removal of international restrictions by the Charter of 1813, Indian trade expanded substantially and over the long term showed an upward trend.  The result was a significant transfer of capital from India to England, which, due to the colonial policies of the British, led to a massive drain of revenue rather than any systematic effort at modernisation of the domestic economy.  Estimates of the per capita income of India (1857–1900) as per 1948–49 prices.
 India's colonisation by the British created an institutional environment that, on paper, guaranteed property rights among the colonisers, encouraged free trade, and created a single currency with fixed exchange rates, standardised weights and measures and capital markets. It also established a well-developed system of railways and telegraphs, a civil service that aimed to be free from political interference, a common-law and an adversarial legal system.  This coincided with major changes in the world economy – industrialisation, and significant growth in production and trade.
However, at the end of colonial rule, India inherited an economy that was one of the poorest in the developing world, with industrial development stalled, agriculture unable to feed a rapidly growing population, a largely illiterate and unskilled labour force, and extremely inadequate infrastructure.  The 1872 census revealed that 91. 3% of the population of the region constituting present-day India resided in villages, and urbanisation generally remained sluggish until the 1920s, due to the lack of industrialisation and absence of adequate transportation.
Subsequently, the policy of discriminating protection (where certain important industries were given financial protection by the state), coupled with the Second World War, saw the development and dispersal of industries, encouraging rural-urban migration, and in particular the large port cities of Bombay, Calcutta and Madras grew rapidly. Despite this, only one-sixth of India's population lived in cities by 1951.  The impact of the British rule on India's economy is a controversial topic.
Leaders of the Indian independence movement and left-wing people who opposed India's independence movementeconomic historians have blamed colonial rule for the dismal state of India's economy in its aftermath and argued that financial strength required for industrial development in Europe was derived from the wealth taken from colonies in Asia and Africa. At the same time, right-wing historians have countered that India's low economic performance was due to various sectors being in a state of growth and decline due to changes brought in by colonialism and a world that was moving towards industrialisation and economic integration.
  Pre-liberalisation period (1947–1991) Indian economic policy after independence was influenced by the colonial experience, which was seen by Indian leaders as exploitative, and by those leaders' exposure to British social democracy as well as the progress achieved by the planned economy of the Soviet Union.  Domestic policy tended towards protectionism, with a strong emphasis on import substitution industrialisation, economic interventionism, a large public sector, business regulation, and central planning, while trade and foreign investment policies were relatively liberal.
 Five-Year Plans of India resembled central planning in the Soviet Union. Steel, mining, machine tools, telecommunications, insurance, and power plants, among other industries, were effectively nationalised in the mid-1950s.  Jawaharlal Nehru, the first prime minister of India, along with the statistician Prasanta Chandra Mahalanobis, formulated and oversaw economic policy during the initial years of the country's existence.
They expected favorable outcomes from their strategy, involving the rapid development of heavy industry by both public and private sectors, and based on direct and indirect state intervention, rather than the more extreme Soviet-style central command system.  The policy of concentrating simultaneously on capital- and technology-intensive heavy industry and subsidising manual, low-skill cottage industries was criticised by economist Milton Friedman, who thought it would waste capital and labour, and retard the development of small manufacturers.
 The rate of growth of the Indian economy in the first three decades after independence was derisively referred to as the Hindu rate of growth by economists, because of the unfavourable comparison with growth rates in other Asian countries.  Since 1965, the use of high-yielding varieties of seeds, increased fertilisers and improved irrigation facilities collectively contributed to the Green Revolution in India, which improved the condition of agriculture by increasing crop productivity, improving crop patterns and strengthening forward and backward linkages between agriculture and industry.
 However, it has also been criticised as an unsustainable effort, resulting in the growth of capitalistic farming, ignoring institutional reforms and widening income disparities.   Post-liberalisation period (since 1991) Main articles: Economic liberalisation in India and Economic development in India GDP of India has risen rapidly since 1991. In the late 1970s, the government led by Morarji Desai eased restrictions on capacity expansion for incumbent companies, removed price controls, reduced corporate taxes and promoted the creation of small scale industries in large numbers.
He also raised the income tax levels at one point to a maximum of 97. 5%, a record in the world for non-communist economies. However, the subsequent government policy of Fabian socialism hampered the benefits of the economy, leading to high fiscal deficits and a worsening current account. The collapse of the Soviet Union, which was India's major trading partner, and the Gulf War, which caused a spike in oil prices, resulted in a major balance-of-payments crisis for India, which found itself facing the prospect of defaulting on its loans.
 India asked for a $1. 8 billion bailout loan from the International Monetary Fund (IMF), which in return demanded reforms.  In response, Prime Minister Narasimha Rao, along with his finance minister Manmohan Singh, initiated the economic liberalisation of 1991. The reforms did away with the Licence Raj, reduced tariffs and interest rates and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors.
 Since then, the overall thrust of liberalisation has remained the same, although no government has tried to take on powerful lobbies such as trade unions and farmers, on contentious issues such as reforming labour laws and reducing agricultural subsidies.  By the turn of the 20th century, India had progressed towards a free-market economy, with a substantial reduction in state control of the economy and increased financial liberalisation.  This has been accompanied by increases in life expectancy, literacy rates and food security, although the beneficiaries have largely been urban residents.
 While the credit rating of India was hit by its nuclear weapons tests in 1998, it has since been raised to investment level in 2003 by S&P and Moody's.  In 2003, Goldman Sachs predicted that India's GDP in current prices would overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by 2035, making it the third largest economy of the world, behind the US and China. India is often seen by most economists as a rising economic superpower and is believed to play a major role in the global economy in the 21st century.
  Sectors  Industry and services See also: Information technology in India, Business process outsourcing in India, Retailing in India, and Mining in India India has one of the world's fastest growing automobile industries.  Shown here is the Tata Nano, the world's cheapest car.  Industry accounts for 28% of the GDP and employ 14% of the total workforce.  In absolute terms, India is 12th in the world in terms of nominal factory output.
 The Indian industrial sector underwent significant changes as a result of the economic reforms of 1991, which removed import restrictions, brought in foreign competition, led to privatisation of certain public sector industries, liberalised the FDI regime, improved infrastructure and led to an expansion in the production of fast moving consumer goods.  Post-liberalisation, the Indian private sector was faced with increasing domestic as well as foreign competition, including the threat of cheaper Chinese imports. It has since handled the change by squeezing costs, revamping management, and relying on cheap labour and new technology.
However, this has also reduced employment generation even by smaller manufacturers who earlier relied on relatively labour-intensive processes.  Textile manufacturing is the second largest source of employment after agriculture and accounts for 20% of manufacturing output, providing employment to over 20 million people.  As stated in late January, by the then Minister of Textiles, India, Shri Shankersinh Vaghela, the transformation of the textile industry from a degrading to rapidly developing industry, has become the biggest achievement of the central government.
After freeing the industry in 2004–2005 from a number of limitations, primarily financial, the government gave the green light to the flow of massive investment – both domestic and foreign. During the period from 2004 to 2008, total investment amounted to 27 billion dollars. By 2012, still convinced of the government, this figure will reach 38 billion as expected; these investments in 2012 will create an additional sector of more than 17 million jobs. But demand for Indian textiles in world markets continues to fall.
According to Union Minister for Commerce and Industries Kamal Nath, only during 2008–2009 fiscal year (which ends 31 March) textile and clothing industry will be forced to cut about 800 thousand new jobs – nearly half of the rate of two million, which will have to go all the export-oriented sectors of Indian economy to soften the impact of the global crisis.  Ludhiana produces 90% of woollens in India and is known as the Manchester of India. Tirupur has gained universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear.
 India is 13th in services output. The services sector provides employment to 23% of the work force and is growing quickly, with a growth rate of 7. 5% in 1991–2000, up from 4. 5% in 1951–80. It has the largest share in the GDP, accounting for 55% in 2007, up from 15% in 1950.  Information technology and business process outsourcing are among the fastest growing sectors, having a cumulative growth rate of revenue 33. 6% between 1997–98 and 2002–03 and contributing to 25% of the country's total exports in 2007–08.
 The growth in the IT sector is attributed to increased specialisation, and an availability of a large pool of low cost, highly skilled, educated and fluent English-speaking workers, on the supply side, matched on the demand side by increased demand from foreign consumers interested in India's service exports, or those looking to outsource their operations. The share of the Indian IT industry in the country's GDP increased from 4. 8 % in 2005–06 to 7% in 2008.  In 2009, seven Indian firms were listed among the top 15 technology outsourcing companies in the world.
 Mining forms an important segment of the Indian economy, with the country producing 79 different minerals (excluding fuel and atomic resources) in 2009–10, including iron ore, manganese, mica, bauxite, chromite, limestone, asbestos, fluorite, gypsum, ochre, phosphorite and silica sand.  Organised retail supermarkets accounts for 24% of the market as of 2008.  Regulations prevent most foreign investment in retailing. Moreover, over thirty regulations such as "signboard licences" and "anti-hoarding measures" may have to be complied before a store can open doors.
There are taxes for moving goods from state to state, and even within states.  Tourism in India is relatively undeveloped, but growing at double digits. Some hospitals woo medical tourism.   Agriculture Main articles: Agriculture in India, Forestry in India, Animal husbandry in India, and Fishing in India See also: Natural resources in India India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted for 15. 7% of the GDP in 2009–10, employed 52.
1% of the total workforce, and despite a steady decline of its share in the GDP, is still the largest economic sector and a significant piece of the overall socio-economic development of India.  Yields per unit area of all crops have grown since 1950, due to the special emphasis placed on agriculture in the five-year plans and steady improvements in irrigation, technology, application of modern agricultural practices and provision of agricultural credit and subsidies since the Green Revolution in India. However, internationa