India witnesses a diverse economy that includes agriculture, handicrafts, textiles, manufacturing and a host of services. Agriculture acts as a dominant income-generating source for many Indians and two-thirds of the population is dependent on it, either directly or indirectly. However, ‘service sector’ is an upcoming sector and is playing a pivotal role in the Indian economy today. With the GDP of 2007-2008 (Gross Domestic Product) estimated at US $2.965 trillion, the economy of India is considered as the 12th largest in the world (as per 2005 GDP).
Demographically, India is the seventh largest and the second most populous country in the world. It is the second fastest growing major economy in the world, with a GDP growth rate of 2007–2008 estimated at 8.5%. In India, a strong backbone, in the form of free press, bold judiciary, advanced legal & accounting system and user-friendly infrastructure, facilitates foreign investments and warrants long-term investors in securities. Moreover, Indian democracy gives rise to a political consensus that holds true for all the major political parties of India.
These political institutions have led to the emergence of a free society, advocating free economic enterprise. Thus, we see a mixed economy in India, characterized by both capitalist market and the socialist command economy. Today, the private sector of India contributes a major chunk to its various economic activities and accounts for more than 75% of its GDP (Gross Domestic Product). It also promotes considerable scope for joint business enterprises and mergers. Moreover, the skilled administrative and industrial work force of the country has bolstered its economy manifold.
Steps to augment economic infrastructure of India are visible in various policies and programmes. The prioritization of road transport sector aims at promoting large industries to enter the road sector. In addition to that, various adaptations in ‘National Highways Act’ have reduced tolls on various national motorways, bridges and tunnels across the country. Other measures, like cutback of import duties and a five-year tax exemption for renewable energy projects, are intended for further involvement of private industries and business ventures in the energy sector.
Indian government is also undertaking a new policy that aims at elevating the quality of the telecommunications systems to reach a global standard. This might elevate the country to a status of one of the major producers and exporters of telecommunication systems. Many far-sighted and advantageous economic reforms targeted towards economic infrastructure development in various spheres have surged in a new era of economic freedom in India. These steps taken to encourage foreign investment and private participation have also moved the country into the forefront of the rapidly growing Asia Pacific region.
