Economy of India

Until 1992 (the beginning of the economic reform), GDP growth did not exceed 3.5% per year. From the financial year 1993/94 to 2001/02, the rate increased sharply: in constant 1993/94 prices to 6.2% and in current prices to 13.1%. The share of gross savings in GDP in 2001/02 was 25.6%. Gross income per capita at constant prices increased from 7698 rupees (1993/94) to 10754 (2001/02), at current prices – from 7698 to 17978. According to the 1991 census, there were 314.1 million employed in India, of Of these, 285.9 million had permanent jobs, and 28.2 million were in marginal employment. At labor exchanges – there are 958 of them in the country (2000) – 41.3 million people were registered. The consumer price index rose from 112.6 in 1994/95 (base 1993/94=100) to 145.3 in 1999/2000.

Contribution of economic sectors to GDP production (%, 2001/02): agriculture and related industries 24.3; mining 2.2; processing 21.8; energy 3.0; construction 5.2; transport and trade 22.5; services 21.5.

The share of fuel raw materials in the production of the mining industry is 88%, incl. coal 38.3%, oil 35.7%, natural gas 11.2%, lignite 2.8% (1995/96). It is mined per year (1999/2000, million tons): coal 299.97, oil 31.9. Extraction of ore minerals (million tons): iron ore 64.5 (44% of the mined ore is exported, accounting for 5% of the value of world exports of iron ore); bauxite 4.9; copper ore 4.7; manganese ore 1.7. India is the 4th largest coal miner in the world.

According to cheeroutdoor, the share of commercial energy sources in final consumption (1996/97,%): coal 29.3, oil products 46.8, natural gas 6.9, electricity 17.0. In 1971 almost 100% of the mines were nationalized. The country remains highly dependent on traditional (non-commercial) forms of energy. Their share in the consumed energy resources in 1996/97 was 32.3%, of which 65% accounted for wood fuel, or 161.4 million tons per year, 88.6 million tons – dry manure and 49.7 million tons – agricultural waste. production. The share of various types of power plants in total capacities (1999/2000,%): general use 86.6 (thermal approx. 63.1, hydro 21.1, nuclear 2.4), factory 13.4.

In 1999/2000, the end products of the iron and steel industry included 27.17 million tons of rolled products and 3.15 million tons of pig iron. There are 7 metallurgical plants in the country, 6 of which are in the public sector – these are plants in Bhilai, Bokaro, Rourkela, Durgapur, Salem, Vizaghapatnam. Steel is also smelted in the country at small enterprises – there are approx. 180 with a total installed capacity of 8 million tons of steel per year, using electric arc and induction furnaces, and scrap metal and sponge iron as raw materials.

Aluminum production in 1999/2000 497.9 thousand tons; 50 thousand tons of aluminum and 300 thousand tons of alumina are exported. 60% of aluminum smelting capacity falls on the public sector. Copper industry: by 2002, the capacity of copper smelting plants reached 500 thousand tons per year. Until ser. 1990s the state used to have a monopoly on copper smelting, now the industry is open to private capital, which launched the construction of several plants at once. Lead-zinc: in the middle. 1990s the annual production of zinc fluctuated between 84.6 and 120 thousand tons, lead – between 27.85 and 35.5 thousand tons. Mining and production of gold are nationalized, the annual production is 1540 kg.

The production of organic chemistry products is based mainly on oil. Phenol, methanol, formaldehyde, acetone, acetic acid are produced. India is distinguished by the production of a wide range of alcohol-based organic chemistry products. India fully provides itself with such products of inorganic chemistry as soda ash, carbon black, calcium carbide, potassium chloride. During the years of independence, India increased the production of mineral fertilizers by 565 times, and ranked 4th in the world in nitrogen fertilizers. But the production of fertilizers does not fully satisfy the needs – the import of potash fertilizers covers 100% of domestic needs, phosphate fertilizers – by 30%. Since 1977, a system of state subsidies has been in place in the production of fertilizers. In 1999, its volume was 132.4 billion rupees. Pesticide production capacity is 96.2 thousand tons per year.

The pharmaceutical industry is one of the largest in developing countries. India produces a wide range of mass medicines, including antibiotics, antibacterials, steroids, hormones, vaccines, and herbal medicines. India consumes 500 drugs of this category, of which 350 are produced domestically, and demand is fully satisfied in prescription drugs.

The policy of import protectionism contributed to the rapid development of mechanical engineering. Transport engineering (one of the oldest industries) is represented by the production of railway rolling stock (24-25 thousand freight cars per year, 1900-2500 passenger cars, 155 electric locomotives, 135 diesel locomotives); shipbuilding and ship repair industries (there are 40 shipyards in the country), where the public sector absolutely dominates; automotive (production of jeeps in 1996/97 72.4 thousand units; other cars 241.2; trucks 85.9; passenger buses 20.1; motorcycles 478.5; motor scooters 983.4; mopeds 428.6; bicycles 137,333 thousand pieces). From Ser. 1990s production of all types of automotive industry products is exempt from licensing. India produced in 1999/2000 280 thousand pieces. tractors, earth-moving, road-building equipment, lifting and transport machines. The production of industrial equipment began only in the years of independence. Now India provides itself with equipment for the cotton, jute, sugar, paper, cement, metallurgical, chemical, pharmaceutical, energy and electrical industries. One of the fastest growing industries was the electronics industry, which emerged only in the middle. 1980s, produces household and industrial electronics. One of the fastest growing industries was the electronics industry, which emerged only in the middle. 1980s, produces household and industrial electronics. One of the fastest growing industries was the electronics industry, which emerged only in the middle. 1980s, produces household and industrial electronics.

The cement industry is developing thanks to rich raw materials. Production 100.2 Mt (1999/2000). The industry not only fully satisfies domestic needs, but also exports a significant amount of products (3.38 million tons in 1994/95).

The traditional industry is textile. Provides up to 20 million jobs, 20% of the value of industrial products and 33% of export earnings. The largest branch of the textile industry is cotton. Raw materials favor its development – India ranks first in the world in terms of cotton planting area, but the yield is only 1/3 of the world average. In terms of the value of gross output and the number of employees, it ranks first among the branches of the factory industry. During the years of independence, the development of the factory cotton industry was due to the growth in the number of spinning mills and their capacities, while the number of looms and combined (spinning and weaving mills) did not grow. Weaving production was reserved by the state for the sector of small and handicraft industry. The ratio of cotton to artificial fibers in the textile industry in 2000 was 56:44 (world average 46:54). The main part of cotton factories is in the private sector (as of 1996): public sector 13%, cooperative 10%, private 77%. The annual production of all types of fabrics is 40.34 million m2, which is 30.6 m per year per capita. The increase per capita between 1960/61 and 1999/2000 was due to artificial fiber fabrics. The export of fabrics increased by 61 times over the same period. The export of jute from the 1st place in the colonial period moved to the 20th – 0.3% of the total value of the country’s exports. The government is stimulating the revival of the industry. India ranks second in the world in silk production. All types of silk are produced.

The government encourages the export of leather products. Currently, the industry ranks 4th among the sources of export earnings.

In the food industry, the largest traditional industry is sugar. Production in 2000 – 18.2 million tons. In state policy, preference is given to the development of the cooperative sector, which accounts for 60% of sugar production. In 1996 there were 440 sugar factories in the country.

In terms of production scale, India is one of the world’s largest producers of agricultural products. The development of the agricultural sector lags far behind the development of industry, although the country has reached the state of “food security”, i.e. meeting domestic needs for food at the expense of national production. Due to the fact that the country is traditionally committed to a vegetarian diet, crop production dominates in the sectoral structure of agriculture. For centuries in India, the main grain crop was rice, but during the “green revolution” con. 1960s – early. 1970s Wheat also joined it, displacing the traditional millet. Rice makes up 43.6% of all grain harvested in 2000/01 (86.8 million tons). It is grown everywhere, but the main rice-growing regions are the south and east of the country (70% of the total crop). 2/3 of the crops are not irrigated. It is grown mainly on small and marginal farms, which does not allow for large government purchases to create reserves or “buffer stocks”. The Green Revolution (GR) affected rice to a lesser extent than wheat: high-yielding varieties of rice in 1997/98 occupied 32% of the cultivated area under this crop. Wheat – 35.2% of the total grain harvest in 2000/01 (70.0 million tons). The country’s second grain crop and the first ZR crop. Grown mainly in the north, the main center of highly productive production is in the states of Punjab, Haryana and western Uttar Pradesh. Production increased from 6.5 million in 1950/51 to 70-75 million tons per horse. 1990s In terms of yield growth, it ranks first among all legumes. It is cultivated on the farms of medium and large farmers as an irrigated crop (86, 2% of all crops in 1996/97). The main crop from which state grain resources are formed, with the help of which grain prices are regulated in the domestic market and assistance is provided to the poorest segments of the population. Millets (millet-bajra, barley-jowar) – 15% of the grain harvest in 2000/01 (29.9 million tons) – the main crops of non-irrigated agriculture in the interior of the country (only 5.3% of the area is irrigated). Millet is the staple food of the poor. Corn is not only a grain, but also a forage crop. Irrigated approx. 20% of crops. The average yield is 1.7 tons per 1 ha with 4.1 tons on average in the world. Fees approx. 10 million tons per year. Legumes are the most important component of the Indian diet, as they are the only source of protein in a vegetarian diet. The main growing areas are northern and central India. All years of independence are produced with a large deficit in relation to needs. Fees approx. 12-13 million tons per year, which is only 15-20 g per day per person. Occupying the 1st place in the world in terms of gross yields, India occupies one of the last places in terms of their yield – 550-630 kg per 1 ha. Oilseeds include 9 crops: peanut, rapeseed, mustard, sesame, linseed, safflower, soybean, sunflower, oil palm. The main oilseed crop is peanuts. Traditionally grown in the south, but has now appeared in the north and central India. Previously, peanut butter was exported, but rapid population growth led to the cessation of the export of oil. The total harvest of oilseeds in 2000/01 was 18.6 million tons. The country is experiencing an acute shortage of vegetable oils, so a special state program is in place to reduce the deficit in the production of oilseeds. The main commercial crop of the country is sugar cane, its cultivation is developing very dynamically. One of the most irrigated crops – 88.1% of all crops. The main growing area is the state of Maharashtra. Harvest in 2000/01 – 300 million tons. Harvest of cotton in 2000/01 – 77.6 million tons (in fiber mass). It is grown in the “great cotton belt” – central and western India. Only 1/3 of the crops are irrigated. The main jute growing area is the state of West Bengal. India is a major producer of jute fiber – 55 million tons in 2000/01. Due to the climate, India is the birthplace of many plantation crops. They are also the main export crops of agriculture. In India, the two main growing areas are the Coromandel and Malabar coasts in the south and the foothills of the northeast. India produced 29% of the world’s tea crop in 2000. Annual collection in the 1990s – 780-870 million kg of tea leaves. Approximately 1/5 is exported. Indian Arabica is close to the best world standards. It is grown mainly in the south. 80% is exported. India is the 4th largest rubber producer in the world. The main plantations are in the south in Kerala. Formerly an important export item. Now, to meet the needs of the rubber industry, a small amount of rubber is imported. Spices have been cultivated since ancient times. An important export item, the proceeds from their exports are 1/3 higher than the proceeds from the export of tea. Main types: black pepper (one of the best in the world), ginger, cardamom, garlic, chili, turmeric. In terms of vegetable production, India is second only to China. In 1997/98, the collection amounted to 87.5 million tons. The share of India in world production is 14.4% (2000). In terms of growing vegetable peas and cauliflower, India ranks 1st in the world. In horticulture, India’s share in world production is 10%, the annual harvest is 44-46 million tons. Main species: bananas (42% of world production, 1st place in the world), mangoes (26%, 1st place), grapes ( in one of the first places, goes to the production of raisins), apples, pineapples, papaya, guava. In animal husbandry, cattle (provides 1/3 of the value of all agricultural products) are used mainly as draft power (57% of the world’s buffalo population) and as a dairy herd (16% of the world’s cows). In terms of milk yield, India took the 1st place in the world – 78.1 million tons (1999/2000). Poultry and sheep breeding are developing rapidly. Export earnings from livestock products in the 1990s grew by an average of 10% per year. Leather, leather products, poultry meat and lamb are exported.

The length of railways is 63 thousand km. The rolling stock is 7,000 locomotives, 30,000 passenger and 300,000 freight cars. Employment 1.6 million people 11 million passengers and more than 1 million tons of cargo are transported annually. The share of rail transport in the country’s freight turnover is 40% and in passenger traffic is 20% (1995). The work is complicated by the diversified tracks: approx. 40 thousand km – wide gauge, 19 thousand – meter and 4 thousand – narrow. The main burden of cargo and passenger traffic falls on the broad gauge railways, which form the sides of the “golden quadrangle” – Delhi, Mumbai, Chennai, Calcutta. The states of the northeast and Jammu and Kashmir are still not provided with rail transport. The length of highways is 3.3 million km (1996). National highways (length 34.3 thousand km) and main state highways (34.1 thousand km) are 5, 5% of the total road length, but serve 3/4 of the total road traffic. The car park consisted of 27.5 million units, transported 23 billion passenger/km and 398 billion tkm per year (1995). There is a sharp movement of goods and passengers from railways to highways, which is considered undesirable in India due to the growth of oil imports. Local roads linking rural settlements have been actively created since the 1980s. within the framework of the state program to increase employment. Non-mechanized transport continues to play a huge role. The main passenger traffic in small and medium-sized cities is served by approximately 5 million cycle rickshaws (17 billion passengers per year, 420 million tons of cargo). The number of draft animals is 85 million heads, cargo carts are 15 million. They transport 2 billion tons of cargo per year.

India is a major maritime power: the length of the coastline is 5560 km. There are 11 main seaports, St. 90% of international trade traffic by weight and 77% by value. There are 139 small and intermediate ports serving coastal trade. The cargo turnover of the main ports is 423.9 million tons (2001/02). Oil and oil products account for more than 40%, iron ore 15%. Major ports: Mumbai, Calcutta+Haldia, Vizag, Kandla. Until 1994, the state had an exclusive monopoly on air transportation: the state company Air India on international routes, Indian Airlines on domestic routes along 72 routes. Now there are 5 more private airlines. The state-owned Pavan Hens Helicopters serves oil companies in India and flies to the northeastern states. Through the 5 largest airports – Mumbai, Delhi, Chennai, Kolkata, Bangalore – 74% of the total passenger traffic passes. There are 120 airports in India.

India has developed world-class, locally adapted telecommuni- cation technologies that are digital switching systems (CS) for use in urban and rural areas. CS for cities with a range of 1.5-40 thousand telephone lines allow servicing up to 800 thousand telephone calls per hour. OK. 40% of all telephone lines in the country operate on these systems. Small automatic CS, designed for 200 telephone lines, revolutionized the telephone system in rural areas. These vehicles have become an important export item to Asia and Latin America. Since the 1980s the telecommunications sector is booming. In 2000 India had the most developed television network in Asia—28.4 million stations served 35 million telephone lines and 28.9 million telephones. The long-distance transmission structure consists of 135,000 km of radio networks and 75 thousand km of fiber optic networks. Telegraph communication still does not lose its position in rural areas (45.5 thousand telegraph offices). Now the country is also developing such types of switching services as facsimile, paging, radio mobile and cellular, e-mail, teletext, videoconferencing. The total number of cell phones is 2.6 million (2000). Mobile communications are still expensive and out of reach for most of the population.

The course of the state economic policy changed in stages. The first stage: from the moment of gaining independence in 1947. The model of import-substituting structural modernization of the economy was adopted based on state capitalism – the public sector and state regulation of the economy. The main directions of state influence on the private sector and its socio-economic structure: 1) providing the private sector with the means of production and financial resources; 2) facilitating the flow of private capital from the environment of circulation into production; 3) subordination of foreign capital to the needs of the development of the national economy; 4) ensuring the flow of foreign and large national capital into capital-intensive and technologically complex industries; 5) promoting the growth and modernization of small industry (reserving certain industries for it); 6) assistance in the development of capitalism in agriculture (pushing large landowners onto the path of running their own economy, attracting large landowners to intensive farming). Planning plays a key role in the system of state regulation of the economy. Since 1951/52, the development strategy has been determined by five-year plans, which are comprehensive programs for structural changes in the economy, and establishes the structure of state capital investments and planned appropriations. Second stage: beginning in June 1991 due to the balance of payments crisis and the need to receive IMF assistance and carry out economic reform, which determined the transition to an export-substituting development model, in which the role assigned to the public sector is significantly changing (the burden of its social functions is decreasing), the economy is opening up for the import of foreign industrial goods, the spheres previously reserved for the public sector are being released for the private sector, and the sphere of state regulation of prices and interest rates is being reduced. At the same time, planning and five-year plans are retained, but their indicative nature in relation to target figures for the private sector is enhanced.

The main direction of social policy is the state redistribution of resources, the development and implementation of programs to combat the main social evil – poverty. Since the 1990s social policy concentrates on two directions – the creation of new jobs and the creation of conditions for the development of small and tiny businesses (self-employment in Indian terminology). From the 2nd floor. 1990s self-employment became the main target area – 75% of all allocated funds for programs to help the poor. The target groups of beneficiaries include: the urban poor, women, children, rural youth aged 18-35, and rural artisans. A significant role in maintaining the lives of the poorest layers is played by the state food distribution system (PSD) at subsidized prices, which has existed in India for more than 60 years.

The monetary system was formed as a result of the nationalization in 1949 of the central bank, the Reserve Bank of India (RBI), established in 1935. the direction of credit and investment flows and the determination of the norms of mandatory investments in low-yielding government securities. The system includes commercial banks (CBs), state organizations for long-term financing of industry, and a state-cooperative system for lending to agriculture. After the nationalization of the largest private banks (14 banks in 1969 and 6 more in 1980), 28 state-owned commercial banks accounted for St. 80% of branches, deposits and loans of all commercial banks in the country. As their subsidiaries, 196 regional rural banks function, designed to serve the credit needs of the rural poor in 2-3 districts. The public sector occupies a monopoly position in the system of long-term financing of industry. There are 3 types of public long-term financing organizations: 1) public financial corporations and development banks to provide long-term loans and investments; 2) a state unit trust created to accumulate funds of small and medium-sized investors for subsequent investment in a diversified portfolio of securities circulating on the market; 3) state insurance companies. Almost 1/2 of the total credit for agriculture is channeled through the state cooperative system. The lower link of the system is 92 thousand primary agricultural credit societies, uniting 98 million members. Primary societies are members of 364 central cooperative banks operating at the district level. Twenty-eight state cooperative banks lead this three-tiered structure through which short- and medium-term agricultural credit is channeled. Along with it, there is a two-stage state-cooperative system of long-term agricultural lending, consisting of 19 state banks and their grassroots network of 738 banks (7 million members).

Public debt in the 1990s – early 2000s (share of GDP, %): domestic 46.7–51.5; external 2.6-4.2.

Taxes provide approximately 3/4 of the state’s budget revenues. The structure of tax revenues to the consolidated budget of the central government, state governments and union territories (1996/97,%): direct taxes 30.4 (including taxes on corporations 14.4; other income 14.2; other direct 1, eight); indirect taxes 69.6 (including central excises 35.0; customs duties 33.3; other indirect taxes 1.3). The low standard of living of the population and the practical exemption of agricultural income from income tax extremely narrow the tax base. Income taxes, including corporate tax, apply to only 0.5% of all residents of the country. Other direct taxes – on wealth, on inheritance, on realized capital gains, on gifts, etc. – have a very high exemption threshold and apply to an even smaller part of the population. In general, direct taxes cover only 1% of the economically active population. The tax policy of the state is aimed at forcing productive capital investments, at encouraging investments in priority sectors of production, is used as an instrument of import protectionism and serves the purpose of stimulating exports.

Economy of India