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Saturday, February 16, 2008

Indian Economy : Dwindling Agricultural Sector | Dependent Services Sector

Indian Economy is agricultural economy with about 70% of labour doing jobs which are directly or indirectly related to the Agricultural sector , It has been seen that after the liberalisation of Indian economy in 90's the agricultural growth has come in negative and government looks still helpless. Recently according to stats released by government officials in india the growth of agricultural sector came down to under 3% whereas previous year it was more then 3% hence the future of Indian agriculture looks no good since it is showing negative growth from couple of years and government has still not come up with a concrete solution to control the dwindling agricultural output of India which is still an agricultural based economy.

After the liberalisation policies of Indian government came into effect in early 90's the growth of Indian economy has become more or less concentrated in big cities , Metros like Delhi, Bangalore, Mumbai, Kolkata, Pune, Ludhiana which comprise very less area in total , Still at grass root level there has been nothing done Indian Government boasts of the milestones it has reached but the whole growth of economy is more or less due to foreign players , Business houses which is quite evident that share markets are going down daily volatility in market is increasing.

From past decade indian economy is governed by the situation of US economy ie if the US economy grows indian markets would touch new high's and when any recession would come in US market then Indian Markets tumble down as pack of cards, So the growth of Indian economy is majorly due to foreign companies which come here for expanding there business and Indian government should know it well that they are here for making profits and profit would be in indian rupees which they would use for growin their business in some other under developed country, recently the subprime market woes has adversly affected the Indian services industry in which Indian economy had no role to play but since economy of India is governed by the US economy the effect was clear :Markets Crashed, Jobs in Services industries cut, IPO's failed and investor's lost crores of money in past couple of months.

One Question arises that what would be India's economic conditions if for a minute we forget about metros and talk about the other 85% of the land area of the country
In that case the Indian economic profile would be somewhat like this:
Country : India
Major Industry : Agriculture
Economic Growth rate: less then 3 % and is on further decline
Major Occupation : Farming, Agriculture, 85% population involved directly or indirectly
Reason: Government policies failure Government still sleeping
Future: Dark would have to borrow food crops and the overall debt would further increase.
Summary: Government needs to change the economic policies so that the growth is more even and not concentrated in and around big cites and metro's.

Time has come when India needs to learn from China- as China has developed everything on it's own without very less help of foreign currencies where as Indian economy is totally in contrast of the chineese be continued..