Introduction:

The Indian economy is one of the largest and fastest-growing economies in the world. As a developing nation, India has made significant strides in various sectors since gaining independence in 1947, transitioning from an agrarian economy to one that is increasingly industrialized and service-oriented. India operates as a mixed economy, blending elements of both capitalism and socialism. The public and private sectors coexist, with the government playing a significant role in sectors like infrastructure, education, and healthcare, while the private sector drives growth in industries such as technology and finance. The features of Indian economy is highly diverse, with contributions from agriculture, industry, and services.

In 1991, India undertook significant economic reforms, moving towards liberalization, privatization, and globalization (LPG reforms). These changes opened up the economy to foreign investment, reduced government control in several sectors, and fostered growth in international trade. With a population of over 1.44 billion, India is the first-most populated country in the world as of 2024. Despite its growth, India faces various challenges such as income inequality, unemployment, poverty, infrastructural deficits, and environmental concerns. India is an emerging global power, playing an influential role in international trade, politics, and economics.

The features of Indian economy:

• Low per-capita income: Developing economies like India have relatively low per capita income compared to developed nations. This reflects income inequality, where a significant portion of the population may live in poverty.
• High population growth: India is the first populated country in the world. India also experience high population growth rates. This leads to pressure on land and other resources and infrastructure, but it also provides a large labor force that can be a source of economic growth if utilized properly.
• Agricultural workforce: A large portion of India’s workforce is engaged in agriculture, although the sector’s contribution to GDP is decreasing. Subsistence farming is still prevalent, and productivity in agriculture is generally lower compared to the industrial and services sectors.
• Growth in Industrial and service sector: India has seen rapid growth in the industrial and service sectors, particularly in information technology, telecommunications, pharmaceuticals, and financial services. The services sector contributes the largest share to India’s GDP that is 6.5 to 6.7% in 2024-2025.
• Economic Inequality: There is an income inequality in India, with a large gap between the rich and poor. According to world inequality Report 2022, India is the most unequal countries in the world. The top 10% of the population holding 57% 0f total national income. A sizable portion of the population remains below the poverty line, although poverty rates have been declining.
• Unemployment and under unemployment: High levels of unemployment, particularly in rural areas, and underemployment in the informal sector are common features. A large segment of the population is employed in low-productivity jobs, which results in low wages.
• Low Productivity: A low productivity in agricultural sector is the important feature of Indian economy. Also the labor productivity is low, it was just 2.53 in 2022. A significant part of the economy operates in the informal sector also which includes small, unregistered businesses that often lack access to formal financial services, legal protections, and worker benefits.
• Inadequate Infrastructure: Developing economies often face infrastructural challenges such as poor transportation networks, limited access to reliable electricity, inadequate water supply, and underdeveloped urban facilities. India has been working to improve these areas, but significant gaps remain.
• Rapid Industrialization: India is experiencing rapid urbanization, with increasing migration from rural to urban areas in search of better employment opportunities. This has led to the expansion of cities and megacities, along with challenges such as overcrowding, slum development, and strain on urban resources.
• Globalization and Foreign Investment: India has increasingly opened its economy to international trade and foreign direct investment (FDI), especially since economic reforms in the 1990s. This has led to economic growth, but also increased vulnerability to global market fluctuations.
• Public Debt: Developing economies often struggle with high levels of public debt due to the need for significant government spending on development projects, subsidies, and welfare schemes. India faces challenges related to fiscal deficits.
• Social development and Gender Inequality: India, like other developing economies, faces social challenges such as gender inequality, caste-based discrimination, and limited access to resources for marginalized groups. However, efforts are being made to address these issues through government policies and social movements.
• Technical upgradation: India is rapidly adopting new technologies, particularly in sectors like telecommunications, fintech, and e-commerce. Mobile internet penetration is growing, and India is becoming a hub for technological innovation and startups, especially in urban areas.

In summary, India’s economy shows many signs of transition from a primarily agrarian society to one that is increasingly urbanized and industrialized, but with challenges like inequality, infrastructural deficits, and environmental sustainability.

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