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Economy

Poverty is fairly widespread in India, but a few Indians have great wealth. India has a large economy in terms of its gross domestic product (GDP), the value of all goods and services produced in a year. But because of its large population, India has one of the lowest per capita (per person) GDP's. This figure is determined by dividing a nation's GDP by its population. India is considered a developing country because of its low per capita GDP.

Agriculture provides about a third of India's national income. India ranks among the world's leading nations in total farm area. Farms cover more than half of the country. About 80 per cent of the farmland is used to grow India's main foods--grains and pulses, the seeds of various pod vegetables, such as beans, chickpeas, and pigeon peas. The major grain crops include rice, wheat, millet, and sorghum. Rice leads all crops in land area. Only China grows more rice than India. India has more cattle and buffalo than any other country. These animals are not butchered for meat, but are important to the economy because the females provide milk. 

India grows more than half of the world's mangoes and leads all countries in the production of cashews, millet, peanuts, pulses, sesame seeds, and tea. The nation ranks second in the production of cauliflowers, jute, onions, rice, sorghum, and sugar cane, and is a major producer of apples, aubergines, bananas, coconuts, coffee, cotton, oranges, potatoes, rapeseeds, rubber, tobacco, and wheat. India is also the world's largest grower of betel nuts, which are palm nuts chewed as a stimulant by many people in tropical Asia. It is also a leading producer of such spices as cardamom, ginger, pepper, and turmeric. 

In the past, India had to import much food. But improved farming techniques and the use of irrigation and high-yield grains have greatly increased agricultural production. The government sponsors programmes to teach farmers scientific farming methods. It also provides credit to allow farmers to buy improved varieties of seeds and fertilizers. The government encourages increased food production by paying farmers higher prices for their crops. Despite a rapidly growing population, India now produces enough food to meet most of its needs. But such disasters as droughts and floods still sometimes cause food shortages in some areas. 

About 60 per cent of India's workers earn a living by farming. The farmers and their families use most of their crops. Half of all Indian farms are less than 1 hectare in area. Only 4 per cent cover more than 10 hectares. About two-thirds of the farmers in India own their own land. Most of their farms become smaller and smaller with each generation because of inheritance customs. When a man dies, his farm is usually divided equally among his children. In many cases, the share of each child may be too small to provide a living. Some Indian states have laws that set a minimum size for a farm below which the land cannot be divided. 

India has the world's largest cattle population. But because cattle are sacred to Hindus, the animals are rarely used for meat, except by Muslims and Christians. Farmers keep cattle and water buffaloes for ploughing and for milk. Most commercial milk production comes from water buffaloes. Hides from cattle and water buffaloes are used for leather after the animals have died. Sheep are reared mostly for wool and sheepskin. The production of chickens and eggs is increasing. (Top)

Service industries are those economic activities that produce services, not goods. Service industries are less important in India than they are in other large countries because its population is agriculturally oriented. 

India's leading service industries are (1) community, government, and personal services and (2) trade. Community, government, and personal services include such activities as education, health care, public administration, and national defence. This group of services employs nearly a fifth of India's people. Mumbai is India's major centre for retail trade and for the wholesale trade of cotton. Calcutta is a world leader in the wholesale trade of jute. 

Other service industries include finance, insurance, property, and business services; and transportation, communication, and utilities. Transportation and communication are discussed later in this section. (Top)

Manufacturing has expanded rapidly in India since the nation became independent. Total industrial production today is six times as great as in 1950. Petroleum refining and the manufacture of machinery and transportation equipment have grown especially fast. 

The privately owned Tata steel mills at Jamshedpur were constructed in the early 1900's. Since 1950, the government has built, with foreign aid, major iron and steel mills at Bhilai, Bokaro, Durgapur, and Raurkela. Indian factories use the iron and steel to make cars, bicycles, diesel engines, electric appliances, military equipment, pumps, railway carriages, sewing machines, tractors, and many kinds of industrial machinery. Workers in factories in Delhi and Mumbai assemble electronic products. 

Indian plants refine petroleum and produce many industrial chemicals, dyes, medicines, fertilizers, and pesticides. Other plants manufacture cement, food products, paper, sugar, and wood products. India imports rough diamonds, cuts them, and exports the gems. 

The clothing and textile industries employ more workers than any other industries. Cotton mills are concentrated in Mumbai and Ahmadabad. Punjab has woollen mills, and Calcutta has jute factories. Millions of Indians work at home, weaving fine fabrics of cotton, rayon, and silk by hand. They make beautifully designed carpets and rugs, and spin fine laces of gold and silver threads. People throughout the world buy embroideries and shawls made by these home weavers. Other articles sometimes produced at home include brassware, jewellery, leather goods, and woodcarvings. (Top)

Forestry and fishing. Forests cover about 10 per cent of India. Large quantities of deodar cedar, rosewood, sal, and teak are cut for timber. In addition, villagers chop down many trees for fuel. India's forest land shrinks each year because people cut more trees than they plant. The government encourages planting, mostly of fast-growing eucalyptus and pine. 

India is a major fishing nation. Croakers, mackerel, sardines, sharks, and shrimp are caught in the surrounding seas. People also catch Bombay duck, a small fish that is dried. Bombay duck is eaten either as an appetizer or as a relish with curried food. Rivers yield carp and catfish. (Top)

Mining. India's great deposits of valuable ores include a variety of raw materials suitable for industrial development. India produces about 7 per cent of the world's iron ore. The iron ore deposits lie along the Bihar-Orissa state borders, near several of the country's major iron and steel works. India also has a good supply of coal. Petroleum accounts for about 50 per cent of the yearly value of all the minerals mined in India, and coal accounts for about 40 per cent. Most of the country's coal comes from the states of Bihar and West Bengal. Petroleum is produced from wells in the Indian Ocean off the coast from Mumbai and from inland deposits in Assam. 

Indian mines supply much of the world's mica, a mineral that is necessary for the manufacture of electrical devices. The country exports much manganese ore, which is used in steelmaking. 

Other mineral resources include large deposits of bauxite, beryllium, chromite, gypsum, limestone, magnesite, natural gas, salt, and titanium. There are smaller deposits of copper, lead, sulphur, and zinc. India also has deposits of two radioactive metals, thorium and uranium; as well as diamonds, emeralds, gold, and silver. The Kolar gold mines in Karnataka, among the world's deepest, go down more than 3.2 kilometres. (Top)

Energy supply. India imports large amounts of petroleum because it uses more than it produces. Plants that burn petroleum or coal generate about three-quarters of India's electricity. Most of the rest comes from hydroelectric plants on India's river systems. Nuclear plants provide a small amount of the country's electricity. (Top)

Transportation in India depends heavily on railways. The railway system, owned and operated by the government, is among the largest in the world. Each year, more than 3 billion passenger journeys are made by rail. Railways also carry about 60 per cent of India's freight traffic. 

Many roads crisscross India. Good national highways connect major cities. But the poor quality of most of India's other roads, plus the small number of bridges and service stations, makes long-distance travel by road difficult in many areas. Fewer Indians than 1 in 500 own a car, and many people travel on buses. Trucks carry about 30 per cent of the nation's freight. Vehicles pulled by animals or people still provide a major means of transportation for short trips. Two-wheeled oxcarts account for most of the traffic. Many people in the cities ride bicycles and motor scooters. The Brahmaputra, Ganges, Godavari, and Krishna rivers carry the most boat traffic. 

The government owns and operates two major airlines, and there are some private airlines. Air-India provides international service to many countries. Indian Airlines flies within India and to nearby countries. Calcutta, Chennai Delhi, and Mumbai have major airports. (Top)

Communication. All Indian cities have telephone service, but the nation has a total of only about 3 million telephones. Telegraph lines reach into all parts of India. The government owns India's radio and television stations. India has an average of only about 1 radio for every 13 people and 1 television set for every 30 people. Many Indians watch television at community centres in villages. The Indian film industry ranks as the world's largest. It produces more than 700 feature films a year. Mumbai is the industry's main centre. 

India has more than 1,300 daily newspapers, reflecting many different political viewpoints. The largest include The Hindu, the Indian Express, the Times of India, and the Statesman, each of which is published in English and in several different cities; Ananda Bazar Patrika, published in Bengali in Calcutta; Malayala Manorama, published in Malayalam in Kerala state; and the Navbharat Times, published in Hindi in Delhi and Mumbai. (Top)

Trade. India's chief exports include cashews, coffee, cotton textiles and clothing, cut diamonds, handicrafts, iron ore, jute products, leather goods, shrimp, tea, and tobacco. Agricultural and allied products make up 28 per cent of the value of the exports, while manufactured goods make up 63 per cent. Industrial goods that are exported include appliances, electronic products, and light machinery. The chief import is petroleum. Other imports include edible oils, fertilizers, food grains, iron and steel, industrial machinery, and transportation equipment. The value of India's imports is greater than the value of its exports. India uses foreign loans to finance the extra imports. India's main trading partners include Germany, Japan, the United Kingdom, and the United States.