August 10, 2009
What is Economy?
An Economy is the realized system of human activities related to the production, distribution, exchange, and consumption of goods and services of a country or other area.
There are three main activities in economy
Primary sector involves the extraction and production of raw materials such as coal, corn, wood, iron etc
Secondary sector involves the transformation of raw or intermediate material into goods e.g.: manufacturing steel into cars, textile into clothing
Tertiary sector involves the provision of services to consumers and business such cinema, banking (shop keeper and accountant would be the workers in the tertiary sector)
The methods of measuring the economic activity in a nation are
Gross Domestic product
GDP per capita
Rate of Inflation
Balance of Trade
Indian Economy Overview
India’s diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Services are the major source of economic growth, accounting for more than half of India’s output with less than one third of its labor force. About three-fifths of the work force is in agriculture. The government has reduced controls on foreign trade and investment. Higher limits on foreign direct investment were permitted in a few key sectors, such as telecommunications. The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points. India achieved 8.5% GDP growth in 2006, and again in 2007, significantly expanding production of manufactures. India is capitalizing on its large numbers of well-educated people skilled in the English language to become a major exporter of software services and software workers. However, strong growth combined with easy consumer credit and a real estate boom fueled inflation concerns in 2006 and 2007, leading to a series of central bank interest rate hikes that have slowed credit growth and eased inflation concerns. The huge and growing population is the fundamental social, economic, and environmental problem.