The economy of India is the eleventh largest economy in the world by nominal GDP and the fourth

largest by purchasing power parity (PPP). The country'sper capita GDP (PPP) is $3,176 (IMF, 127th) in
2009. Following strong economic reforms from the socialist inspired economy of a post-independence
Indian nation, the country began to develop a fast-paced economic growth, as free market principles were
initiated in 1990 for international competition and foreign investment. Economists predict that by 2020,
India will be among the leading economies of the world.

India was under social democratic-based policies from 1947 to 1991. The economy was characterised by
extensive regulation, protectionism, public ownership,pervasive corruption and slow growth. Since 1991,
continuing economic liberalisation has moved the country toward 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 liberalize business regulations. By
2008, India had established itself as the world's second-fastest growing major economy. However, as a
result of the financial crisis of 2007–2010, coupled with a poor monsoon, India's gross domestic product
(GDP) growth rate significantly slowed to 6.7 percent in 2008-09, but subsequently recovered to 7.2% in
2009-10, while the fiscal deficit rose from 5.9% to a high 6.5% during the same period. India ranks 51th
in the Global Competitiveness Report. The country has major stock and commodities exchanges like
BSE, NSE, USE and few other exchanges as well.

Sectors

Industry and services

Industry accounts for 28% of the GDP and employ 14% of the total workforce. However, about one-third
of the industrial labour force is engaged in simple household manufacturing only. In absolute terms,
India is 16th in the world in terms of nominal factory output. Business services (information technology,
information technology 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. In 2009, seven Indian firms were listed among the top 15 technology outsourcing
companies in the world. 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.

Agriculture

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 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 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, international comparisons reveal the average
yield in India is generally 30% to 50% of the highest average yield in the world.

Banking and finance

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.

Energy and power

India's oil reserves meet 25% of the country's domestic oil demand. As of 2009, India's total proven oil
reserves stood at 775 million metric tonnes while gas reserves stood at 1074 billion cubic metres. Oil and
natural gas fields are located offshore at Mumbai High, Krishna Godavari Basin and the Cauvery Delta,
and onshore mainly in the states of Assam, Gujarat and Rajasthan. In 2009, India imported 2,560,000
barrels (407,000 m3) of oil per day, making it one of largest buyers of crude oil in the world. The
petroleum industry in India mostly consists of public sector companies such as Oil and Natural Gas
Corporation (ONGC),Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation
Limited (IOCL). There are some major private Indian companies in oil sector such as Reliance Industries
Limited (RIL) which operates the world's largest oil refining complex.

The geopolitics of India must be considered in the geographical context of the Indian subcontinent — a
self-contained region that includes India, Pakistan, Bangladesh and, depending how one defines it, Nepal
and Bhutan. We call the subcontinent “self-contained” because it is a region that is isolated on all sides by
difficult terrain or by ocean. In geopolitical terms it is, in effect, an island.

India is frequently compared geographically to non-Russian Europe because both are peninsulas jutting
out of the Eurasian land mass. They have had radically different patterns of development, however.

The Europeans developed long-standing and highly differentiated populations and cultures, which
evolved into separate nation-states such as Spain, France, Germany and Poland. Their precise frontiers
and even independence have varied over time, but the distinctions have been present for centuries — in
many cases predating the Roman Empire. The Indian subcontinent, on the other hand, historically has
been highly fragmented but also fluid (except when conquered from the outside). Over fairly short
periods of time, the internal political boundaries have been known to shift dramatically.

The reason for the difference is fairly simple. Europe is filled with internal geographic barriers: The Alps
and Pyrenees and Carpathians present natural boundaries and defensive lines, and numerous rivers and
forests supplement these. These give Europe a number of permanent, built-in divisions, with defined
political entities and clear areas of conflict. India lacks such definitive features. There are no internal
fortresses in the Indian subcontinent, except perhaps for the Thar Desert.
The Geopolitics of Modern India

Modern India has its origins in the collapse of the British Empire. Indeed, it was the loss of India that
ultimately doomed the British Empire. The entire focus of imperial Britain, from the Suez Canal to
Gibraltar and Singapore, was to maintain the lines of supply to India. Many of the colonies and
protectorates around the world secured by Britain in the 19th century were designed to provide coaling
stations to and from India. In short, the architecture of the British Empire was built around India, and
once India was lost, the purpose of that architecture dissolved as well. The historical importance of India
could not be overestimated. Lenin once referred to it as the supply depot of humanity — which overstated
the case perhaps, but did not overstate India’s importance to Britain.

The British gave up India for several reasons, the most important of which was commercial: The cost of
controlling India had outstripped the value derived. This happened in two ways. The first was that the cost
of maintaining control of the sea-lanes became prohibitive. After World War II, the Royal Navy was far
from a global navy. That role had been taken over by the United States, which did not have an interest in
supporting British control of India. As was seen in the Suez crisis of 1956, when the British and French
tried to block Egyptian nationalization of the canal, the United States was unprepared to support or
underwrite British access to its colonies (and the United States had made this clear during World War II
as well). Second, the cost of controlling India had soared. Indigenous political movements had increased
friction in India, and that friction had increased the cost of exploiting India’s resources. As the economics
shifted, the geopolitical reality did as well.

The independence of India resulted in the unification of the country under an authentically Indian
government. It also led to the political subdivision of the subcontinent. The Muslim-majority areas — the
Indus Valley region west and northwest of the Thar Desert, and the Ganges River basin — both seceded
from India, forming a separate country that itself later split into modern-day Pakistan and Bangladesh. It
was this separatism that came to frame Indian geopolitics.

India and Pakistan, for the bulk of their mutual existence, have had an adversarial relationship. For a long
time, the Indian sentiment was that Pakistan’s separation from India could have been avoided. This
attitude, coupled with Pakistan’s own geographic, demographic and economic inferiority, has forced
Islamabad to craft its entire foreign policy around the threat from India. As a result, the two sides have
fought four wars, mostly over Kashmir, along with one that resulted in the hiving off of Bangladesh.

As noted earlier, the Indian heartland is the northern plain of the Ganges River basin. This plain is
separated from Pakistan’s heartland, the Indus Valley, only by a small saddle of easily traversed land;
fewer than 200 miles separate the two rivers. If India is to have any ambition in terms of expansion on
land, the Indus is the only option available — all other routes end either in barriers or in near-wasteland.
Meanwhile, the closeness — and sheer overwhelming size — of India is central to Pakistan’s mind-set.
The two are locked into rivalry.

India’s Geopolitical Imperatives

The geography of the subcontinent constrains the behavior of governments that arise there. If there is to
be an independent India, and if it is to be a stable and secure nation-state, it must do the following things:

• Achieve suzerainty in the Ganges River basin

• Expand throughout the core of the subcontinent until it reaches all natural barriers
 • Advance past the patch of land separating the Ganges basin from the Indus River basin
and dominate the Indus region (meaning Pakistan).
• With the entire subcontinent under the control (or at least the influence) of a centralized
power, begin building a navy.

ORIGIN OF INDIAN STOCK MARKET

The origin of the stock market in India goes back to the end of the eighteenth century when long-term
negotiable securities were first issued. However, for all practical purposes, the real beginning occurred in
the middle of the nineteenth century after the enactment of the companies Act in 1850, which introduced
the features of limited liability and generated investor interest in corporate securities.

Exchanges in India

The Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) are the country's two
leading Exchanges. There are 20 other regional Exchanges, connected via the Inter-Connected Stock
Exchange(ICSE). The BSE and NSE allow nationwide trading via their VSAT systems.

Eminent visits to india

BEIJING – Chinese Premier Wen Jiabao travels to India this week as part of efforts to build trust
between the rival neighbors amid lingering disputes over territory, trade and telecoms.
Wen will hold talks with his Indian counterpart Manmohan Singh and oversee celebrations marking the
60th anniversary of diplomatic ties, an opportunity to highlight a historical relationship that has evolved
into a sharpening competition over resources and global markets.
The sides are expected to sign agreements in areas including energy and infrastructure development,
although no major breakthroughs in ties are anticipated.
The Foreign Ministry said Monday that Wen would also visit longtime ally Pakistan on a five-day sweep
through South Asia starting Wednesday.
Wen's visit to India follows one to China by Indian President Pratibha Patil in May — the first by an
Indian head of state in a decade — and comes on the heels of a 14th round of discussions on their
disputed border.
US President Barack Obama on Tuesday left New Delhi for Indonesia after his three-day visit to
India, during which he announced support for New Delhi's bid for a permanent seat in the UN Security
Council and asked Pakistan to bring perpetrators of 26/11 attacks to justice.Obama and his wife Michelle
were given a warm send-off by Minister-in-Waiting Salman Khursheed, Foreign Secretary Nirupama Rao
and other officials. US Ambassador to India Timothy J Roemer was also present.The Air Force One
carrying the US First Couple took off from the Delhi Airport at 8.54 AM.
Obama will be in Jakarta as part of his two-day visit to Indonesia, where he had spent four years of his
childhood. The US President, who arrived in Mumbai on Saturday, met President Pratibha Patil, Prime
Minister Manmohan Singh and other top leaders during his two-day stay here.He had announced US
support to India's bid for permanent seat in the UN Security Council and offered to play "any role" in
reducing Indo-Pak tensions.The US President also sent a strong message to Pakistan during his address to
Parliament, telling Islamabad that "safe havens" inside its territory is "unacceptable".Obama also asked
Pakistan to bring to justice perpetrators of the 2008 Mumbai attacks that claimed the lives of 166
people.Soon after his arrival in Mumbai, Obama had paid rich tributes to the 26/11 victims. During his
visit, India and the US agreed on a number of new initiatives, including cooperation on internal security,
removal of Indian companies from the US sanctions' list and setting up of a research centre in India in
civil nuclear field.The two countries also signed deals worth $10 billion.
The forthcoming budget 2010-11
The revenue from direct taxes has shown high buoyancy since tax reforms were initiated in 1991, but
there has been no such improvement in the indirect taxes both in terms of administration and
enforcement.
Key People behind the forthcoming budget:
Prime Minister Manmohan Singh; Pranab Mukherjee, Finance Minister ; Montek Singh
Ahluwalia, Dy Chairman, Planning Commission; Ashok Chawla, Finance Secretary; Kaushik
Basu, Chief Economic Advisor; C Rangarajan, chairman, Prime Minister’s
Economic Advisory Council
WHAT WE EXPECT FROM FORTHCOMING BUDGET:
Budget likely to keep GFD/GDP ratio at 6%or slightly above 6%.
Expansion of NREGP, Bharat Nirman likely to stimulate the rural economy.
Government to encourage infrastructure investment.
Selected disinvestment to take place in order to check deficit.
Agriculture sector to get boost.
Focus on education and skill development to continue.
U K Sinha is the next Sebi chairman wef 14th December 2010. The current chief of rbi is Duvyuri
Subbarao.

CRR:Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI
decides to increase the percent of this, the available amount with the banks comes down. RBI
is using this method (increase of CRR rate), to drain out the excessive money from the banks.
GDP: The gross domestic product (GDP) or gross domestic income (GDI) is the amount of goods and
services produced in a year, in a country. It is the market value of all final goods and services made
within the borders of a country in a year

GNP: Gross National Product (GNP) is defined as the market value of all goods and services produced in
one year by labour and property supplied by the residents of a country.

A sector of economy to qualify as emerging sector must satisfy two condition.

• It is a sector which has established its presence. But is not very big currently.
• It is currently growing fast and holds the promise to become an important sector of the economy
in near future.

Based in these two criteria I believe the following secctors qualify as emerging sector in Indian Economy
today.

• Medical treatment
• Medical research
• Knowledge process outsourcing
• Organized retailingCurrently none of these sectors is very big, but they are growing fast and
likely to become significantly bigger in near future.