India

5 Pages 1264 Words

Since independence, India has promoted a mixed economic system in
which the government, constitutionally defined as “socialist,” plays
a major role as central planner, regulator, investor, manager, and
producer. Many of its decisions are highly political, especially in
its attempts to invest equitably among the various states of the
union. Despite the government's pervasive economic role, large
corporate undertakings dominate many spheres of modern economic
activity, while tens of millions of generally small agricultural
holdings and petty commercial, service, and craft enterprises
account for the great bulk of employment. The range of technology
runs the gamut from the most primitive to the most sophisticated.
There are few things that India cannot produce, though much of what
it does manufacture would not be economically competitive without
the protection offered by high tariffs on imported goods. The highly
regulated economic system has acted as a major deterrent to foreign
trade, which, in absolute terms and in relation to total gross
domestic product, is remarkably low. Foreign aid, derived mainly
from the United States and the Soviet Union, as well as from many
international agencies, was quite important in the first few decades
after independence, but it no longer plays a key role. Formerly, a
significant portion of foreign aid was in the form of food and other
commodities, but it subsequently has tended to be in technological
assistance and the provision of credit.
Probably no more than one-fifth of India's vast labour force is
employed in the so-called “organized” sector of the economy (e.g.,...