Economy of India: From Wikipedia, The Free Encyclopedia

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Economy of India
From Wikipedia, the free encyclopedia
The economy of India is the twelfth largest Economy of India

economy in the world by market exchange
rates[5] and the fourth largest by purchasing
power parity (PPP) basis.[6]
India was under social democratic-based

policies from 1947 to 1991. The economy
was characterised by extensive regulation,
protectionism, and public ownership, leading
to pervasive corruption and slow growth.[7]
[8][9][10] Since 1991, continuing economic Currency 1 Indian Rupee (INR) (₨) = 100 Paise
liberalisation has moved the economy Fiscal year April 1–March 31
towards a market-based system.[8][9] A
revival of economic reforms and better Trade WTO, SAFTA
economic policy in 2000s accelerated India's organisations
economic growth rate. By 2008, India had Statistics
established itself as the world's second-
fastest growing major economy.[11][12][13] GDP $1.209 trillion (2008 est.)[1]
However, the year 2009 saw a significant GDP growth 6.7% (2009)[2]
slowdown in India's official GDP growth
rate to 6.1%[14] as well as the return of a GDP per capita $1016 [3]
large projected fiscal deficit of 10.3% of GDP by sector agriculture: 17.2%, industry: 29.1%,
GDP which would be among the highest in
services: 53.7% (2008 est.)
the world.[15][16]
Inflation (CPI) 7.8% (CPI) (2008)
India's large service industry accounts for
54% of the country's GDP while the
Population 22% (2008)[4]
industrial and agricultural sector contribute below poverty
29% and 17% respectively. Agriculture is line
the predominant occupation in India,
Labour force 523.5 million (2008 est.)
accounting for about 60% of employment.
The service sector makes up a further 28%, Labour force agriculture: 60%, industry: 12%, services:
and industrial sector around 12%.[17] The by occupation 28% (2003)
labor force totals half a billion workers.
Unemployment 6.8% (2008 est.)
Major agricultural products include rice,
wheat, oilseed, cotton, jute, tea, sugarcane, Main industries textiles, chemicals, food processing, steel,
potatoes, cattle, water buffalo, sheep, goats, transportation equipment, cement, mining,
poultry and fish.[18] Major industries include petroleum, machinery, software
textiles, chemicals, food processing, steel,
transportation equipment, cement, mining, External
petroleum, machinery, information
Exports $175.7 billion f.o.b (2008 est.)
technology enabled services and software.
[18] Export goods petroleum products, textile goods, gems
and jewelry, engineering goods,
http://en.wikipedia.org/wiki/Economy_of_India 10/25/2009
India's per capita income (nominal) is $1016,

ranked 142th in the world,[19] while its per chemicals, leather manufactures
capita (PPP) of US$2,762 is ranked 129th. Main export US 15%, the People's Republic of China
[20][21] Previously a closed economy, India's
partners 8.7%, UAE 8.7%, UK 4.4% (2007)
trade has grown fast.[8] India currently
Imports $287.5 billion f.o.b. (2008 est.)
accounts for 1.5% of World trade as of 2007
according to the WTO. According to the Import goods crude oil, machinery, gems, fertilizer,
World Trade Statistics of the WTO in 2006, chemicals
India's total merchandise trade (counting
exports and imports) was valued at $294 Main import People's Republic of China 10.6%, US
billion in 2006 and India's services trade partners 7.8%, Germany 4.4%, Singapore 4.4%
inclusive of export and import was $143
billion. Thus, India's global economic Public finances
engagement in 2006 covering both Public debt $163.8 billion (2008)
merchandise and services trade was of the
order of $437 billion, up by a record 72% Revenues $153.5 billion (2008 est.)
from a level of $253 billion in 2004. India's Expenses $205.3 billion (2008 est.)
trade has reached a still relatively moderate
share 24% of GDP in 2006, up from 6% in Main data source: CIA World Fact Book
1985.[8] All values, unless otherwise stated, are in US dollars
Despite robust economic growth, India

continues to face many major problems. The recent economic development has widened the economic
inequality across the country.[22] Despite sustained high economic growth rate, approximately 80% of
its population lives on less than $2 a day (nominal), more than double the same poverty rate in China.
[23] Even though the arrival of Green Revolution brought end to famines in India,[24] 40% of children
under the age of three are underweight and a third of all men and women suffer from chronic energy
deficiency.[25]
Goldman Sachs predicts that inspite of the high growth rate, India will continue to "remain a low-
income country for several decades with per capita incomes well below its other BRIC peers".[10]
Contents
 1 History
 1.1 Pre-colonial
 1.2 Colonial
 1.3 Independence to 1991
 1.4 After 1991
 2 Sectors
 2.1 Agriculture
 2.2 Industry and services
 2.3 Banking and finance
 2.4 Natural resources
 3 External trade and investment

 3.1 Global trade relations
 3.2 Balance of payments
 3.3 Foreign direct investment in India

 4 Currency
 5 Income and consumption
 6 Employment
 7 Economic trends
 7.1 Issues
 7.1.1 Agriculture
 7.1.2 Corruption
 7.1.3 Government
 7.1.4 Education
 7.1.5 Infrastructure
 7.1.6 Labour laws
 7.1.7 Economic disparities
 7.1.8 Environment and health
 8 See also
 9 Notes
 10 References
 11 External links
History
Main articles: Economic history of India and Timeline of the
economy of India
India's economic history can be broadly divided into three eras,

beginning with the pre-colonial period lasting up to the 17th
century. The advent of British colonisation started the colonial
period in the 17th century, which ended with independence in 1947. Silver coin minted during the
The third period stretches from independence in 1947 until now. reign of the Gupta king Kumara
Gupta I (AD 414–55)
Pre-colonial
The citizens of the Indus Valley civilisation, a permanent and

predominantly urban 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.[28]
The spice trade between India and
The 1872 census revealed that 99.3% of the population of the region Europe was one of the main
constituting present-day India resided in villages,[29] whose drivers of the world economy[26]
economies were largely isolated and self-sustaining, with agriculture and the main catalyst for the Age
the predominant occupation. This satisfied the food requirements of of Discovery.[27]
the village and provided raw materials for hand-based industries,
such as textiles, food processing and crafts. Although many
kingdoms and rulers issued coins, barter was prevalent. Villages paid a portion of their agricultural
produce as revenue to the rulers, while its craftsmen received a part of the crops at harvest time for their
services.[30]
Religion, especially Hinduism, and the caste and the joint family systems, played an influential role in
shaping economic activities.[31] The caste system functioned much like medieval European guilds,
ensuring the division of labour, providing for the training of apprentices and, in some cases, allowing
manufacturers to achieve narrow specialization. For instance, in certain regions, producing each variety
of cloth was the specialty of a particular sub-caste.
Textiles such as muslin, Calicos, shawls, and agricultural

products such as pepper, cinnamon, opium and indigo were
exported to Europe, the Middle East and South East Asia in
return for gold and silver.[33]
Assessment of India's pre-colonial economy is mostly

qualitative, owing to the lack of quantitative information.
One estimate puts the revenue of Akbar's Mughal Empire in
Estimates of the per capita income of India 1600 at £17.5 million, in contrast with the total revenue of
Great Britain in 1800, which totalled £16 million.[34] India,
(1857–1900) as per 1948–49 prices. [32]
by the time of the arrival of the British, was a largely

traditional agrarian economy with a dominant subsistence sector dependent on primitive technology. It
existed alongside a competitively developed network of commerce, manufacturing and credit. After the
decline of the Mughals, western, central and parts of south and north India were integrated and
administered by the Maratha Empire. The Maratha Empire's budget in 1740s, at its peak, was Rs. 100
million. After the loss at Panipat, the Maratha Empire disintegrated into confederate states of Gwalior,
Baroda, Indore, Jhansi, Nagpur, Pune and Kolhapur. Gwalior state had a budget of Rs. 30M. However,
at this time, British East India company entered the Indian political theatre. Until 1857, when India was
firmly under the British crown, the country remained in a state of political instability due to internecine
wars and conflicts.[35]
Colonial
Company rule in India brought a major change in the taxation

environment from revenue taxes to property taxes, resulting in mass
impoverishment and destitution of majority of farmers and led to
numerous famines.[36] The economic policies of the British Raj
effectively bankrupted India's large handicrafts industry and caused a
massive drain of India's resources.[37][38] Indian Nationalists employed
the successful Swadeshi movement, as strategy to diminish British
economic superiority by boycotting British products and the reviving
the market for domestic-made products and production techniques. An aerial view of Calcutta
India had become a strong market for superior finished European Port taken in 1945. Calcutta,
goods. This was because of vast gains made by the Industrial which was the economic hub
revolution in Europe, the effects of which was deprived to Colonial of British India, saw increased
India. The Nationalists had hoped to revive the domestic industries that industrial activity during
were badly effected by polices implemented by British Raj which had World War II.
made them uncompetitive to British made goods. An estimate by
Cambridge University historian Angus Maddison reveals that India's share of the world income fell from
22.6% in 1700, comparable to Europe's share of 23.3%, to a low of 3.8% in 1952.[39] It also created an
institutional environment that, on paper, guaranteed property rights among the colonizers, encouraged
free trade, and created a single currency with fixed exchange rates, standardized weights and measures,
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.[40]
India's colonisation by the British 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,[41] with industrial
development stalled, agriculture unable to feed a rapidly growing population, India had one of the
world's lowest life expectancies, and low rates for literacy.
The impact of the British rule on India's economy is a controversial topic. Leaders of the Indian
independence movement, and left-nationalist economic historians have blamed colonial rule for the
dismal state of India's economy in its aftermath and 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 industrialization and economic integration.[42]
Independence to 1991
Indian economic policy after independence was influenced by the

colonial experience (which was seen by Indian leaders as exploitative
in nature) and by those leaders' exposure to Fabian socialism. Policy
tended towards protectionism, with a strong emphasis on import
substitution, industrialization, state intervention in labor and financial
markets, a large public sector, business regulation, and central
planning.[43] Five-Year Plans of India resembled central planning in
the Soviet Union. Steel, mining, machine tools, water, Compare India (orange) with
telecommunications, insurance, and electrical plants, among other South Korea (yellow). Both
started from about the same
industries, were effectively nationalized in the mid-1950s.[44] Elaborate income level in 1950. The
licences, regulations and the accompanying red tape, commonly graph shows GDP per capita
referred to as Licence Raj, were required to set up business in India of South Asian economies and
between 1947 and 1990.[45] South Korea as a percent of
the American GDP per capita.
Jawaharlal Nehru, the first prime minister, along with the statistician
Prasanta Chandra Mahalanobis, carried on by Indira Gandhi formulated and oversaw economic policy.
They expected favorable outcomes from this strategy, because it involved both public and private
sectors and was based on direct and indirect state intervention, rather than the more extreme Soviet-style
central command system.[46] The policy of concentrating simultaneously on capital- and technology-
intensive heavy industry and subsidizing manual, low-skill cottage industries was criticized by
economist Milton Friedman, who thought it would waste capital and labour, and retard the development
of small manufacturers.[47]
India's low average growth rate from 1947–80 was derisively referred to as the Hindu rate of growth,
because of the unfavourable comparison with growth rates in other Asian countries, especially the "East
Asian Tigers".[40]
The Rockefeller Foundation's research in high-yielding varieties of seeds, their introduction after 1965
and the increased use of fertilizers and irrigation are known collectively as the Green Revolution in
India, which provided the increase in production needed to make India self-sufficient in food grains,
thus improving agriculture in India. Famine in India, once accepted as inevitable, has not returned since
the end of colonialism.
After 1991
Main articles: Economic liberalization in India and Economic development in India
In the late 80s, the government led by Rajiv Gandhi

eased restrictions on capacity expansion for
incumbents, removed price controls and reduced
corporate taxes. While this increased the rate of
growth, it also led to high fiscal deficits and a
worsening current account. The collapse of the
Soviet Union, which was India's major trading
partner, and the first Gulf War, which caused a spike Major improvements in educational standards
across India has helped its economic rise. Shown
in oil prices, caused a major balance-of-payments here is the Indian School of Business at Hyderabad,
crisis for India, which found itself facing the ranked number 15 in global MBA rankings by the
prospect of defaulting on its loans.[49] India asked Financial Times of London in 2009.[48]
for a $1.8 billion bailout loan from IMF, which in
return demanded reforms.[50]
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 (investment, industrial
and import licensing) and ended many public monopolies, allowing automatic approval of foreign direct
investment in many sectors.[51] Since then, the overall direction of liberalisation has remained the same,
irrespective of the ruling party, although no party has tried to take on powerful lobbies such as the trade
unions and farmers, or contentious issues such as reforming labour laws and reducing agricultural
subsidies.[52] Since 1990 India has emerged as one of the fastest-growing economies in the developing
world; during this period, the economy has grown constantly, but with a few major setbacks. This has
been accompanied by increases in life expectancy, literacy rates and food security.
While the credit rating of India was hit by its nuclear tests in 1998, it has been raised to investment level
in 2007 by S&P and Moody's.[53] In 2003, Goldman Sachs predicted that India's GDP in current prices
will overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by 2035. By 2035,
it was projected to be the third largest economy of the world, behind US and China.[54][55]
Sectors
Agriculture
Main articles: Agriculture in India, Forestry in India, Animal

husbandry in India, and Fishing in India
India ranks second worldwide in farm output. Agriculture and allied

sectors like forestry, logging and fishing accounted for 16.6% of the
GDP in 2007, employed 60% of the total workforce[17] and despite a
steady decline of its share in the GDP, is still the largest economic
sector and plays a significant role in 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 Farmers work inside a rice
five-year plans and steady improvements in irrigation, technology, field in Andhra Pradesh. India
is the second largest producer
application of modern agricultural practices and provision of of rice in the world after China
agricultural credit and subsidies since Green revolution in India. [56] and Andhra Pradesh is the
However, international comparisons reveal that the average yield in 2nd largest rice producing
India is generally 30% to 50% of the highest average yield in the state in India and West Bengal
world.[58] being the largest rice
producing state in India.[57]
India is the largest producer in the world of milk, cashew nuts,
coconuts, tea, ginger, turmeric and black pepper.[59] It also has the
world's largest cattle population (193 million). [60] It is the second largest producer of wheat, rice, sugar,
groundnut and inland fish.[61] It is the third largest producer of tobacco.[61] India accounts for 10% of
the world fruit production with first rank in the production of bananas, sapotas and mangoes.[61]
The second largest producer and largest consumer of silk in the world is India, with a majority of the
7000 crore production taking place in Karnataka State, particularly in Mysore and the North Bangalore
regions of Muddenahalli, Kanivenarayanapura, and Doddaballapura the upcoming sites of a 70 crore
"Silk City". [62] [63]
Industry and services
See also: Business process outsourcing in India and Retailing in India
Industry accounts for 27.6% of the GDP and employ 17% of the total
workforce.[17] However, about one-third of the industrial labour force
is engaged in simple household manufacturing only.[70] In absolute
terms, India is 16th in the world in terms of nominal factory output.[71]
India's small industry makes up 5% of carbon dioxide emissions in the
world.
Economic reforms brought foreign competition, led to privatisation of

certain public sector industries, opened up sectors hitherto reserved for Development center of OFSS
in Bangalore. India has Asia's
the public sector and led to an expansion in the production of fast- largest outsourcing industry
moving consumer goods.[72] Post-liberalisation, the Indian private [64] and is the world's second
sector, which was usually run by oligopolies of old family firms and most favorable outsourcing
required political connections to prosper was faced with foreign destination after the United
competition, including the threat of cheaper Chinese imports. It has States.[65]
since handled the change by squeezing costs, revamping management,
focusing on designing new products and relying on low labour costs
and technology.[73]
Textile manufacturing is the second largest source for employment

after agriculture and accounts for 26% of manufacturing output.[74]
Tirupur has gained universal recognition as the leading source of
hosiery, knitted garments, casual wear and sportswear.[75] Dharavi
slum in Mumbai has gained fame for leather products. Tata Motors'
Nano attempts to be the world's cheapest car.[69] India has one of the world's
India is fifteenth in services output. It provides employment to 23% of

fastest growing automobile
work force, and it is growing fast, growth rate 7.5% in 1991–2000 up
from 4.5% in 1951–80. It has the largest share in the GDP, accounting industries[66][67] and is global
leader of auto industry.[68]
for 55% in 2007 up from 15% in 1950.[17] Shown here is Tata Motors'
Nano, world's least expensive
Business services (information technology, information technology car in production.[69]
enabled services, business process outsourcing) are among the fastest
growing sectors contributing to one third of the total output of services
in 2000. The growth in the IT sector is attributed to increased specialization, and an availability of a
large pool of low cost, but highly skilled, educated and fluent English-speaking workers, on the supply
side, matched on the demand side by an increased demand from foreign consumers interested in India's
service exports, or those looking to outsource their operations. The share of India's IT industry to the
country's GDP increased from 4.8 % in 2005-06 to 7% in 2008.[76][77] In 2009, seven Indian firms were
listed among the top 15 technology outsourcing companies in the world.[78] In March 2009, annual
revenues from outsourcing operations in India amounted to US$60 billion and this is expected to
increase to US$225 billion by 2020.[79]
Most Indian shopping takes place in open markets and millions of independent grocery shops called
kirana. Organized retail such supermarkets accounts for just 4% of the market as of 2008.[80]
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 to states, from states, and even within states.[80]
Tourism in India is relatively undeveloped, but growing at double digits. Some hospitals woo medical
tourism.[81]
Banking and finance
Main article: Finance in India

See also: Banking in India and Insurance in India
The Indian money market is classified into: the organised sector

(comprising private, public and foreign owned commercial banks and
cooperative banks, together known as scheduled banks); and the
unorganised sector (comprising individual or family owned indigenous
bankers or money lenders and non-banking financial companies
(NBFCs)). The unorganised sector and microcredit are still preferred
over traditional banks in rural and sub-urban areas, especially for non-
productive purposes, like ceremonies and short duration loans.[83]
Prime Minister Indira Gandhi

nationalised 14 banks in 1969,
followed by six others in 1980, and
made it mandatory for banks to
provide 40% of their net credit to
priority sectors like agriculture, small- Structure of the organised
scale industry, retail trade, small banking sector in India.
businesses, etc. to ensure that the Number of banks are in
banks fulfill their social and

Mumbai is the financial and developmental goals. Since then, the brackets.[82]
commercial capital of India. number of bank branches has
Shown here is the World
Trade Center of Mumbai increased from 10,120 in 1969 to 98,910 in 2003 and the population
covered by a branch decreased from 63,800 to 15,000 during the same
period. The total deposits increased 32.6 times between 1971 to 1991
compared to 7 times between 1951 to 1971. Despite an increase of rural branches, from 1,860 or 22% of
the total number of branches in 1969 to 32,270 or 48%, only 32,270 out of 5 lakh (500,000) villages are
covered by a scheduled bank.[84][85]
The public sector banks hold over 75% of total assets of the banking industry, with the private and
foreign banks holding 18.2% and 6.5% respectively.[86] Since liberalisation, the government has
approved significant banking reforms. While some of these relate to nationalised banks (like
encouraging mergers, reducing government interference and increasing profitability and
competitiveness), other reforms have opened up the banking and insurance sectors to private and foreign
players.[17][87] Since liberalisation, the government has approved significant banking reforms. While
some of these relate to nationalised banks (like encouraging mergers, reducing government interference
and increasing profitability and competitiveness), other reforms have opened up the banking and
insurance sectors to private and foreign players.[17][87]
More than half of personal savings are invested in physical assets such as land, houses, cattle, and gold.
[88]
Natural resources
Main article: Natural resources in India

See also: Energy policy of India
India's total cultivable area is 1,269,219 km² (56.78% of

total land area), which is decreasing due to constant pressure
from an ever growing population and increased
urbanisation.
India has a total water surface area of 314,400 km² and

receives an average annual rainfall of 1,100 mm. Irrigation India has the world's fifth largest wind
accounts for 92% of the water utilisation, and comprised power industry, with an installed wind
380 km² in 1974, and is expected to rise to 1,050 km² by power capacity of 9,587 MW. Shown here
is a wind farm in Muppandal, Tamil Nadu.
2025, with the balance accounted for by industrial and
domestic consumers. India's inland water resources
comprising rivers, canals, ponds and lakes and marine resources comprising the east and west coasts of
the Indian ocean and other gulfs and bays provide employment to nearly 6 million people in the fisheries
sector. In 2008, India had the world's third largest fishing industry.[89]
India's major mineral resources include coal, iron, manganese, mica, bauxite, titanium, chromite,
limestone and thorium.
India meets most of its domestic energy demand through its 92 billion tonnes of coal reserves (about
10% of world's coal reserves). [90] India's oil reserves, found in Bombay High off the coast of
Maharashtra, Gujarat, Rajasthan and in eastern Assam meet 25% of the country's domestic oil demand.
[17][91]India's total proven oil reserves stand at 11 billion barrels,[92] of which Bombay High is believed
to hold 6.1 billion barrels[93] and Mangala Area in Rajasthan an additional 3.6 billion barrels.[94] India's
huge thorium reserves — about 25% of world's reserves — is expected to fuel the country's ambitious
nuclear energy program in the long-run. India's dwindling uranium reserves stagnated the growth of
nuclear energy in the country for many years.[95] However, the Indo-US nuclear deal has paved the way
for India to import uranium from other countries.[96] India is also believed to be rich in certain
renewable sources of energy with significant future potential such as solar, wind and biofuels (jatropha,
sugarcane).
External trade and investment

Further information: Globalisation in India
Global trade relations
India's economy is mostly dependent on its large internal market with

external trade accounting for just 20% of the country's GDP.[98] In
2008, India accounted for 1.45% of global merchandise trade and 2.8%
of global commercial services export.[99] Until the liberalization of
1991, India was largely and intentionally isolated from the world
markets, to protect its economy and to achieve self-reliance. Foreign
trade was subject to import tariffs, export taxes and quantitative
restrictions, while foreign direct investment (FDI) was restricted by In March 2008, India's annual
upper-limit equity participation, restrictions on technology transfer, imports and exports stood at
export obligations and government approvals; these approvals were US$236 and US$155.5 billion
needed for nearly 60% of new FDI in the industrial sector. The respectively.[97] Shown here is
restrictions ensured that FDI averaged only around US$200 million the cargo of a container ship
annually between 1985 and 1991; a large percentage of the capital being unloaded at the
flows consisted of foreign aid, commercial borrowing and deposits of Jawaharlal Nehru Port, Navi
non-resident Indians.[100] India's exports were stagnant for the first 15 Mumbai.
years after independence, due to the predominance of tea, jute and
cotton manufactures, demand for which was generally inelastic. Imports in the same period consisted
predominantly of machinery, equipment and raw materials, due to nascent industrialization.
Since liberalization, the value of India's international trade has become more broad-based and has risen
to Rs. 63,080,109 crores in 2003–04 from Rs.1,250 crores in 1950–51. India's major trading partners are
China, the US, the UAE, the UK, Japan and the EU.[101] The exports during April 2007 were $12.31
billion up by 16% and import were $17.68 billion with an increase of 18.06% over the previous year.
[102] In 2006-07, major export commodities included engineering goods, petroleum products, chemicals
and pharmaceuticals, gems and jewellery, textiles and garments, agricultural products, iron ore and other
minerals. Major import commodities included crude oil and related products, machinery, electronic
goods, gold and silver.[103]
India is a founding-member of General Agreement on Tariffs and Trade (GATT) since 1947 and its
successor, the WTO. While participating actively in its general council meetings, India has been crucial
in voicing the concerns of the developing world. For instance, India has continued its opposition to the
inclusion of such matters as labour and environment issues and other non-tariff barriers into the WTO
policies.[104]
Balance of payments
Since independence, India's balance of payments on its current account

has been negative. Since liberalisation in the 1990s (precipitated by a
balance of payment crisis), India's exports have been consistently
rising, covering 80.3% of its imports in 2002–03, up from 66.2% in
1990–91. India's growing oil import bill is seen as the main driver
behind the large current account deficit.[105] In 2007-08, India
Cumulative Current Account
imported 120.1 million tonnes of crude oil, more than 3/4th of the Balance 1980-2008 based on
domestic demand, at a cost of $61.72 billion.[106] the IMF data
Although India is still a net importer, since 1996–97 its overall balance
of payments (i.e., including the capital account balance) has been positive, largely on account of
increased foreign direct investment and deposits from non-resident Indians; until this time, the overall
balance was only occasionally positive on account of external assistance and commercial borrowings.
As a result, India's foreign currency reserves stood at $285 billion in 2008, which could be used in
infrastructural development of the country if used effectively.
Due to the global late-2000s recession, both Indian exports and imports declined by 29.2% and 39.2%
respectively in June 2009.[107] The steep decline was because countries hit hardest by the global
recession, such as United States and members of the European Union, account for more than 60% of
Indian exports.[108] However, since the decline in imports was much sharper compared to the decline in
exports, India's trade deficit reduced to $252.5 billion.[107]
India's reliance on external assistance and commercial borrowings has decreased since 1991–92, and
since 2002–03, it has gradually been repaying these debts. Declining interest rates and reduced
borrowings decreased India's debt service ratio to 4.5% in 2007.[109] In India, External Commercial
Borrowings (ECBs) are being permitted by the Government for providing an additional source of funds
to Indian corporates. The Ministry of Finance monitors and regulates these borrowings (ECBs) through
ECB policy guidelines.[110]
Foreign direct investment in India
As the fourth-largest economy in the world in

PPP terms, India is a preferred destination for Share of top five investing countries in FDI inflows.
foreign direct investments (FDI); [113] India has (2000–2007)[111]
strengths in information technology and other Inflows
Rank Country Inflows (%)
significant areas such as auto components, (Million USD)
chemicals, apparels, pharmaceuticals, and 1 Mauritius 85,178 44.24%[112]
jewellery. Despite a surge in foreign 2 United States 18,040 9.37%
investments, rigid FDI policies resulted in a 3 United Kingdom 15,363 7.98%
significant hindrance. However, due to some 4 Netherlands 11,177 5.81%
positive economic reforms aimed at 5 Singapore 9,742 5.06%
deregulating the economy and stimulating
foreign investment, India has positioned itself as
one of the front-runners of the rapidly growing Asia Pacific Region.[113] India has a large pool of skilled
managerial and technical expertise. The size of the middle-class population stands at 50 million and
represents a growing consumer market.[114]
India's recently liberalized FDI policy (2005) allows up to a 100% FDI stake in ventures. Industrial
policy reforms have substantially reduced industrial licensing requirements, removed restrictions on
expansion and facilitated easy access to foreign technology and foreign direct investment FDI. The
upward moving growth curve of the real-estate sector owes some credit to a booming economy and
liberalized FDI regime. In March 2005, the government amended the rules to allow 100 per cent FDI in
the construction business.[115] This automatic route has been permitted in townships, housing, built-up
infrastructure and construction development projects including housing, commercial premises, hotels,
resorts, hospitals, educational institutions, recreational facilities, and city- and regional-level
infrastructure.
A number of changes were approved on the FDI policy to remove the caps in most sectors. Fields which
require relaxation in FDI restrictions include civil aviation, construction development, industrial parks,
petroleum and natural gas, commodity exchanges, credit-information services and mining. But this still
leaves an unfinished agenda of permitting greater foreign investment in politically sensitive areas such
as insurance and retailing. FDI inflows into India reached a record $19.5 billion in fiscal year 2006-07
(April-March), according to the government's Secretariat for Industrial Assistance. This was more than
double the total of US$7.8bn in the previous fiscal year. The FDI inflow for 2007-08 has been reported
as $24 billion[116] and for 2008-09, it is expected to be above $35 billion.[117] A critical factor in
determining India's continued economic growth and realizing the potential to be an economic
superpower is going to depend on how the government can create incentives for FDI flow across a large
number of sectors in India.[118]
Currency
Main articles: Indian rupee and Reserve Bank of India
The Indian rupee is the only legal tender accepted in India. The
exchange rate as of September 1, 2009 is 49.0003 rupees to the US
dollar,[119] 66.65 to a Euro, and 77.60 to a UK pound. The Indian
rupee is accepted as legal tender in the neighboring Nepal and Bhutan,
both of which peg their currency to that of the Indian rupee. The rupee
is divided into 100 paise. The highest-denomination banknote is the
1,000 rupee note; the lowest-denomination coin in circulation is the 25
paise coin (it earlier had 1, 2, 5, 10 and 20 paise coins which have been
discontinued by the Reserve Bank of India).[120] There has been a
recent fall in the value of the Rupee as a result of the global financial
crisis of 2008, as foreign institutional investors sold $14 billion worth
of Indian stocks in 2008 and invested in US treasury bonds.
The RBI headquarters in
The RBI, the country's central bank was established on April 1, 1935. It Mumbai
serves as the nation's monetary authority, regulator and supervisor of
the financial system, manager of exchange control and as an issuer of
currency. The RBI is governed by a central board, headed by a governor who is appointed by the Central
government of India.
Income and consumption

Main article: Income in India
As of 2005:
 85.7% of the population lives on less than

$2.50 (PPP) a day, down from 92.5% in 1981.
This compares with 80.5% in Sub-Saharan
Africa.[121]
 75.6% of the population lives on less than $2 a
day (PPP), which is around 20 rupees or $0.5
a day in nominal terms. It was down from
86.6% and compares with 73.0% in Sub-
Saharan Africa.[121][122][123][124][125]
 24.3% of the population earned less than $1
(PPP, around $0.25 in nominal terms) a day in
2005, down from 42.1% in 1981.[121][126] Percentage of population living under the poverty
 41.6% of its population is living below the line of $1 (PPP) a day, currently 356.35 rupees a
new international poverty line of $1.25 (PPP) month in rural areas (around $7.4 a month).
per day, down from 59.8% in 1981.[121] The
World Bank further estimates that a third of the global poor now reside in India.
Today, more people can afford a bicycle than ever before. Some 40% of Indian households owns a
bicycle, with ownership rates ranging from around 30% to 70% at state level.[127] Housing is still very
modest. According to Times of India, "a majority of Indians have per capita space equivalent to or less
than a 10 feet x 10 feet room for their living, sleeping, cooking, washing and toilet needs." and "one in
every three urban Indians lives in homes too cramped to exceed even the minimum requirements of a
prison cell in the US."[128] The average is 103 sq ft (9.6 m2) per person in rural areas and 117 sq ft
(10.9 m2) per person in urban areas.[128]
Around half of Indian children are malnourished. The proportion of underweight children is nearly
double that of Sub-Saharan Africa.[25][129] However, India has not had famines since the Green
Revolution in the early 1970s. While poverty in India has reduced significantly, official figures estimate
that 27.5%[130] of Indians still lived below the national poverty line of $1 (PPP, around 10 rupees in
nominal terms) a day in 2004-2005.[131] A 2007 report by the state-run National Commission for
Enterprises in the Unorganised Sector (NCEUS) found that 65% of Indians, or 750 million people, lived
on less than 20 rupees per day[132] with most working in "informal labour sector with no job or social
security, living in abject poverty." [133]
Since the early 1950s, successive governments have implemented various schemes, under planning, to
alleviate poverty, that have met with partial success. All these programmes have relied upon the
strategies of the Food for work programme and National Rural Employment Programme of the 1980s,
which attempted to use the unemployed to generate productive assets and build rural infrastructure.[134]
In August 2005, the Indian parliament passed the Rural Employment Guarantee Bill, the largest
programme of this type in terms of cost and coverage, which promises 100 days of minimum wage
employment to every rural household in 200 of India's 600 districts. The question of whether economic
reforms have reduced poverty or not has fuelled debates without generating any clear cut answers and
has also put political pressure on further economic reforms, especially those involving the downsizing of
labour and cutting agricultural subsidies.[135][136]
Employment
See also: Indian labour laws
Agricultural and allied sectors accounted for about 60% of the total workforce in 2003 same as in 1993–
94. While agriculture has faced stagnation in growth, services have seen a steady growth. Of the total
workforce, 8% is in the organised sector, two-thirds of which are in the public sector. The NSSO survey
estimated that in 1999–2000, 106 million, nearly 10% of the population were unemployed and the
overall unemployment rate was 7.3%, with rural areas doing marginally better (7.2%) than urban areas
(7.7%). India's labor force is growing by 2.5% annually, but employment only at 2.3% a year.[137]
Official unemployment exceeds 9%. Regulation and other obstacles have discouraged the emergence of
formal businesses and jobs. Almost 30% of workers are casual workers who work only when they are
able to get jobs and remain unpaid for the rest of the time. [137] Only 10% of the workforce is in regular
employment.[137] India's labor regulations are heavy even by developing country standards and analysts
have urged the government to abolish them.[8][138]
Unemployment in India is characterized by chronic underemployment or disguised unemployment.

Government schemes that target eradication of both poverty and unemployment (which in recent
decades has sent millions of poor and unskilled people into urban areas in search of livelihoods) attempt
to solve the problem, by providing financial assistance for setting up businesses, skill honing, setting up
public sector enterprises, reservations in governments, etc. The decreased role of the public sector after
liberalization has further underlined the need for focusing on better education and has also put political
pressure on further reforms.[134][139]
Child labor is a complex problem that is basically rooted in poverty. The Indian government is
implementing the world's largest child labor elimination program, with primary education targeted for
~250 million. Numerous non-governmental and voluntary organizations are also involved. Special
investigation cells have been set up in states to enforce existing laws banning employment of children
(under 14) in hazardous industries. The allocation of the Government of India for the eradication of
child labor was $10 million in 1995-96 and $16 million in 1996-97. The allocation for 2007 is $21
million.[140]
In 2006, remittances from Indian migrants overseas made up $27 billion or about 3% of India's GDP.
[141]
Economic trends
In the revised 2007 figures, based on increased and sustaining
growth, more inflows into foreign direct investment, Goldman
Sachs predicts that "from 2007 to 2020, India’s GDP per capita in
US$ terms will quadruple", and that the Indian economy will
surpass the United States (in US$) by 2043.[10] Inspite of the high
growth rate, the report stated that India would continue to remain a
low-income country for decades to come but could be be a "motor
India's 300 million strong middle-
for the world economy" if it fulfills its growth potential. [10] class population is growing at an
Goldman Sachs has outlined 10 things that it needs to do in order to annual rate of 5%.[142] Shown
achieve its potential and grow 40 times by 2050. These are here is a residential area in the
1. improve governance
Mumbai metropolitan area.
2. raise educational achievement
3. increase quality and quantity of universities
4. control inflation
5. introduce a credible fiscal policy
6. liberalize financial markets
7. increase trade with neighbours
8. increase agricultural productivity
9. improve infrastructure and
10. improve environmental quality.[143]
Issues
Agriculture
Main article: Agriculture in India
Slow agricultural growth is a concern for policymakers as some two-

thirds of India’s people depend on rural employment for a living.
Current agricultural practices are neither economically nor
environmentally sustainable and India's yields for many agricultural
commodities are low. Poorly maintained irrigation systems and almost
universal lack of good extension services are among the factors
responsible. Farmers' access to markets is hampered by poor roads, An Indian farmer
rudimentary market infrastructure, and excessive regulation.
– World Bank: "India Country Overview 2008"[144]
The low productivity in India is a result of the following factors:
 According to "India: Priorities for Agriculture and Rural Development" by World Bank, India's
large agricultural subsidies are hampering productivity-enhancing investment. Overregulation of
agriculture has increased costs, price risks and uncertainty. Government interventions in labor,
land, and credit markets are hurting the market. Infrastructure and services are inadequate.[145]
 Illiteracy, general socio-economic backwardness, slow progress in implementing land reforms and
inadequate or inefficient finance and marketing services for farm produce.
 The average size of land holdings is very small (less than 20,000 m²) and is subject to
fragmentation, due to land ceiling acts and in some cases, family disputes. Such small holdings
are often over-manned, resulting in disguised unemployment and low productivity of labour.
 Adoption of modern agricultural practices and use of technology is inadequate, hampered by
ignorance of such practices, high costs and impracticality in the case of small land holdings.
 World Bank says that the allocation of water is inefficient, unsustainable and inequitable. The
irrigation infrastructure is deteriorating.[145] Irrigation facilities are inadequate, as revealed by the
fact that only 52.6% of the land was irrigated in 2003–04,[146] which result in farmers still being
dependent on rainfall, specifically the Monsoon season. A good monsoon results in a robust
growth for the economy as a whole, while a poor monsoon leads to a sluggish growth.[147] Farm
credit is regulated by NABARD, which is the statutory apex agent for rural development in the
subcontinent.
India has many farm insurance companies that insure wheat, fruit, rice and rubber farmers in the event
of natural disasters or catastrophic crop failure, under the supervision of the Ministry of Agriculture.
One notable company that provides all of these insurance policies is Agriculture Insurance Company of
India and it alone insures almost 20 million farmers.
India's population is growing faster than its ability to produce rice and wheat.[24] The most important
structural reform for self-sufficiency is the ITC Limited plan to connect 20,000 villages to the Internet
by 2013.[148] This will provide farmers with up to date crop prices for the first time, which should
minimise losses incurred from neighbouring producers selling early and in turn facilitate investment in
rural areas.
Corruption
Main article: Corruption in India
India ranked 120th on the Ease of Doing Business Index 2008, behind
countries such as China (83rd), Pakistan (86th), and Nigeria (108th).
Corruption has been one of the pervasive problems affecting India. The
economic reforms of 1991 reduced the red tape, bureaucracy and the Overview of the index of
perception of corruption, 2007
Licence Raj that had strangled private enterprise and was blamed for
the corruption and inefficiencies. Yet, a 2005 study by Transparency
International (TI) India found that more than half of those surveyed had firsthand experience of paying
bribe or peddling influence to get a job done in a public office.[149]
The Right to Information Act (2005) and equivalent acts in the Indian states, that require government
officials to furnish information requested by citizens or face punitive action, computerisation of services
and various central and state government acts that established vigilance commissions have considerably
reduced corruption or at least have opened up avenues to redress grievances.[149] The 2007 report by
Transparency International ranks India at 72nd place and states that significant improvements were
made by India in reducing corruption.[150][151]
Government
Main article: Government of India

See also: Taxation in India and Corruption in India
The current government has concluded that most

spending fails to reach its intended recipients.[152]
Lant Pritchett calls India's public sector "one of the
world's top ten biggest problems — of the order of
AIDS and climate change".[152] The Economist's
article about Indian civil service (2008) says that
Indian central government employs around 3 million
people and states another 7 million, including "vast
armies of paper-shuffling peons".[152] Million dollar
bureaucracies can be run without a single computer
in the management.[152]
The number of people employed in non-agricultural
occupations in the public and private sectors. Totals
At local level, administration can be worse. It is not are rounded. Private sector data relates to non-
unheard of that most state assembly seats are held by agriculture establishments with 10 or more
convicted criminals.[153] One study found out that employees.[134]
25% of public sector teachers and 40% of public
sector medical workers could not be found at the
workplace. India's absence rates are one of the worst in the world.[154][155][156][157]
The Reserve Bank of India has warned that India's public-debt to GDP ratio is over 70%.[158] The
government of India is highly indebted and its former investment-grade status has deteriorated near junk
status.[159] India's current public-debt to GDP ratio is 58.2% (US has 60.8%) [160][161]
Education
Main article: Education in India
India has made huge progress in terms of increasing primary education attendance rate and expanding
literacy to approximately two thirds of the population.[162] However, education is still far behind
developing countries such as China. Most children never attend secondary schools.[162] An optimistic
estimate is that only one in five job-seekers in India has ever had any sort of vocational training.[163]
Infrastructure
See also: Transport in India, Indian Road Network, Ports in India, Electricity in India, States of
India by installed power capacity, Water supply and sanitation in India, and Communications in
India
Development of infrastructure was completely in the hands of the

public sector and was plagued by corruption, bureaucratic
inefficiencies, urban-bias and an inability to scale investment.[164]
India's low spending on power, construction, transportation,
telecommunications and real estate, at $31 billion or 6% of GDP in
2002 had prevented India from sustaining higher growth rates. This has
prompted the government to partially open up infrastructure to the
private sector allowing foreign investment[134][165][166] which has Rapid increases in exports has
helped in a sustained growth rate of close to 9% for the past six resulted in congestion on
highways across India. Shown
quarters.[167] here is the Mumbai-Pune
expressway in Maharashtra.
Some 600 million Indians have no mains electricity at all.[168] While
80% of Indian villages have at least an electricity line, just 44% of rural
households have access to electricity.[169] According to a sample of 97,882 households in 2002,
electricity was the main source of lighting for 53% of rural households compared to 36% in 1993.[170]
Some half of the electricity is stolen, compared with 3% in China. The stolen electricity amounts to
1.5% of GDP.[169][171] Almost all of the electricity in India is produced by the public sector. Power
outages are common.[168] Many buy their own power generators to ensure electricity supply. As of 2005
the electricity production was at 661.6 billion kWh with oil production standing at 785,000 bbl/day. In
2007, electricity demand exceeded supply by 15%.[168] Multi Commodity Exchange has tried to get a
permit to offer electricity future markets.[172]
Indian Road Network is developing. Trucking goods from Gurgaon to the port in Mumbai can take up to
10 days.[173] India has the world's second largest road network.[174] Container traffic is growing at 15%
a year.[175] Some 60% of India’s container traffic is handled by the Jawaharlal Nehru Port Trust in
Mumbai. Internet use is rare; there were only 2.1 million broadband lines in India in January 2007.[176]
Most urban cities have good water supply water 24 hours a day, while some smaller cities face water
shortages in summer season. A World Bank report says it is an institutional problem in water agencies,
or "how the agency is embedded in the relationships between politics and the citizens who are the
consumers."[177]
Labour laws
Main article: Indian labour laws
India’s labor regulations — among the most restrictive and complex in the world — have
constrained the growth of the formal manufacturing sector where these laws have their widest
application. Better designed labor regulations can attract more labor- intensive investment and
create jobs for India’s unemployed millions and those trapped in poor quality jobs. Given the
country’s momentum of growth, the window of opportunity must not be lost for improving the job
prospects for the 80 million new entrants who are expected to join the work force over the next
decade.
– World Bank: India Country Overview 2008[144]
India's restrictive labor regulations hamper the large-scale creation of formal industrial jobs.[8][163][178]
Economic disparities
Main article: Economic disparities in India
Lagging states need to bring more jobs to their people by creating an attractive investment
destination. Reforming cumbersome regulatory procedures, improving rural connectivity,
establishing law and order, creating a stable platform for natural resource investment that balances
business interests with social concerns, and providing rural finance are important.
– World Bank: India Country Overview 2008[144]
One of the critical problems facing India's economy is the sharp and
growing regional variations among India's different states and
territories in terms of per capita income, poverty, availability of infrastructure and socio-economic
development.[180] Seven low-income states - Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa,
Rajasthan, and Uttar Pradesh - are home to more than half of India's population.[181]
Between 1999 and 2008, the annualized growth rates for Gujarat
(8.8%), Haryana (8.7%), or Delhi (7.4%) were much higher than for
Bihar (5.1%), Uttar Pradesh (4.4%), or Madhya Pradesh (3.5%).[182]
Poverty rates in rural Orissa (43%) and rural Bihar (40%) are some of
the worst in the world.[177] On the other hand, rural Haryana (5.7%)
and rural Punjab (2.4%) compare well with middle-income countries.
[177]
Slums next to high-rise

commercial buildings in The five-year plans have attempted to reduce regional disparities by
Kaloor, Kochi. Hundreds of encouraging industrial development in the interior regions, but
people, mostly comprising industries still tend to concentrate around urban areas and port cities
migrant labourers who come [183] After liberalization, the more advanced states are better placed to
to the city seeking job
prospects, reside in such benefit from them, with infrastructure like well developed ports,
shabby areas.[179] urbanisation and an educated and skilled workforce which attract
manufacturing and service sectors. The union and state governments of
backward regions are trying to reduce the disparities by offering tax
holidays, cheap land, etc., and focusing more on sectors like tourism, which although being
geographically and historically determined, can become a source of growth and is faster to develop than
other sectors.[184][185]
Environment and health
Main articles: Environment of India, Water supply and sanitation

in India, and Healthcare in India
On Yale and Columbia's Environmental Performance Index, India's

score is 21/100 on sanitation, compared with 67/100 for the region and
48/100 for the country income group.[186]
About 1.2 billion people in developing nations lack clean, safe water
Calicut Medical College,
because most household and industrial wastes are dumped directly into Kerala
rivers and lakes without treatment. This contributes to the rapid
increase in waterborne diseases in humans.[187] Out of India's 3119
towns and cities, just 209 have partial treatment facilities, and only 8 have full wastewater treatment
facilities (WHO 1992).[188] Indoor air pollution from burning wood, coal and animal dung is
widespread.[189] 70% of rural households in India lack ventilation. Particulate concentrations in houses
are reported to range from 8,300 to 15,000 ìg/m3, greatly exceeding the 75 ìg/m3 maximum standard
for indoor particulate matter in the United States.[190]
See also
 Economic development in India
 Below Poverty Line (India)
 Bilateral Investment Treaty
 Energy policy
 Indian Construction Industry
 Indian states ranking by families owning house

 International investment position
 List of co-operative banks in India
 List of Indian companies
Notes
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http://www.asiatradehub.com/india/intro.asp. Retrieved 2005-08-14.
External links
Government of India websites
 Finance Ministry of India

 India in Business- Official website for Investment and Trade in India
 Reserve Bank of India's database on the Indian economy
Publications and statistics
 World Bank - India Country Overview

 Ernst & Young 2006 report on doing Business in India
 CIA - The World Factbook – India
 India Economic Scan
 Will India Become a Superpower? Here are 12 Hints
Retrieved from "http://en.wikipedia.org/wiki/Economy_of_India"

Categories: South Asia Free Trade Agreement | Economy of India | World Trade Organization member
economies
 This page was last modified on 24 October 2009 at 09:07.

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Economy of India - Wikipedia, the free encyclopedia Page 1 of 28

The economy of India is the twelfth largest Economy of India

India was under social democratic-based

India's per capita income (nominal) is $1016,

Despite robust economic growth, India

 3 External trade and investment

 3.3 Foreign direct investment in India

India's economic history can be broadly divided into three eras,

The citizens of the Indus Valley civilisation, a permanent and

Textiles such as muslin, Calicos, shawls, and agricultural

Assessment of India's pre-colonial economy is mostly

by the time of the arrival of the British, was a largely

Company rule in India brought a major change in the taxation

Indian economic policy after independence was influenced by the

Main articles: Economic liberalization in India and Economic development in India

In the late 80s, the government led by Rajiv Gandhi

Main articles: Agriculture in India, Forestry in India, Animal

India ranks second worldwide in farm output. Agriculture and allied

Industry and services

See also: Business process outsourcing in India and Retailing in India

Economic reforms brought foreign competition, led to privatisation of

Textile manufacturing is the second largest source for employment

India is fifteenth in services output. It provides employment to 23% of

Banking and finance

Main article: Finance in India

The Indian money market is classified into: the organised sector

Prime Minister Indira Gandhi

banks fulfill their social and

Main article: Natural resources in India

India's total cultivable area is 1,269,219 km² (56.78% of

India has a total water surface area of 314,400 km² and

External trade and investment

Global trade relations

India's economy is mostly dependent on its large internal market with

Since independence, India's balance of payments on its current account

Foreign direct investment in India

As the fourth-largest economy in the world in

Income and consumption

 85.7% of the population lives on less than

Unemployment in India is characterized by chronic underemployment or disguised unemployment.

Main article: Agriculture in India

Slow agricultural growth is a concern for policymakers as some two-

– World Bank: "India Country Overview 2008"[144]

The low productivity in India is a result of the following factors:

Main article: Corruption in India

Main article: Government of India

The current government has concluded that most

Main article: Education in India

Development of infrastructure was completely in the hands of the

permit to offer electricity future markets.[172]

Main article: Indian labour laws

– World Bank: India Country Overview 2008[144]

Main article: Economic disparities in India

– World Bank: India Country Overview 2008[144]

Slums next to high-rise

Environment and health

Main articles: Environment of India, Water supply and sanitation

On Yale and Columbia's Environmental Performance Index, India's

 Indian states ranking by families owning house

the Arrival of Europeans. Diane Publishing Company. ISBN 0871692481.

92. ^ India's energy security challenge

drains and state sewers. NewsWeek on July 7-14, 2008 issue