Indian Economy

A historical Perspective: Pre-British Period The economic conditions of India, before the British came around the middle of the 19th Century were almost similar to those which prevailed in other countries. Fairley advanced sectors The agriculture sector as also the industrial sector depicted a high degree of development. Trade and transport sectors were just satisfactory, banking was quite developed sector. Short Questions

1. The Indian villages during the Pre-British period were self-sufficient.
2. Before the British came to India her balance of trade was always favorable.
3. During the Pre-British period India's main industry was Textile handicrafts.
4. An important consequence of the British rule in India was the decline of handicrafts.

Nature of Indian Economy

1. Vast Private Sector: The Country's enterprises, dealing with both the production and distribution of goods and services are over-whelming in the hands of private people. The private ownership has taken many forms; single entrepreneurs, partnerships, joint stock companies, co-operatives etc. The private sector production and distribution constitute 80% of the total product of the Country.
2. Strong Public Sector: Public Sector in the Country command key products and services. It has emerged a major factor in the country's economic growth. Public Sector contributes around 20% to the country's domestic product.
3. Indicative and Development Plans: Another Identity of Indian economy is the use of five year plans and regulation of the private sector to determine the use - pattern of country's resources. These plans usually aimed at development of the country, plan strategies emphasized on the reduction of inequalities and uplift of the poor.
4. Market Regulations: In an economy the market obviously is a significant means of resource use. The functioning of market is not totally free, because govt. Through its policies and restrictions influences the market. Govt. uses both restrictions and promotional devices like incentives such as subsidies, tax concessions etc. to encourage the activities of small scale industries.
5. An important feature of cropping pattern in India is commercialization of Indian agriculture.
6. At the time of independence industries in India were mostly consumer goods industries.
7. The key industry for industrial development in India is Iron and Steel industry.
8. The biggest large scale industry in India is Iron and Steel Industry.
9. The real beginning of the Iron and Steel Industry was made in the year 1907.
10. The first successful iron and steel unit was started at Jamshedpur by the Tata Iron and Steel Industry.
11. The public sector steel plants were set up in India during the second plan period.
12. Rourkela Steel plant is established in Orissa with German assistance.
13. Bhilai and Bokara Steel Plants were established with Russian assistance in M.P.
14. Durgapur Steel plant is established with United Kingdom assistance in West Bengal.
15. The steel authority of India Ltd. is established in the year 1974.
16. The biggest steel plant in India is Bokara.
17. The first Indian Cotton Mill was established in Bombay in the year 1854.
18. Oil was first struck in India in Assam.
19. ONGC was set up in 1956.
20. The number of oil refineries in India is 12.
21. The first Industrial Policy was announced in 1948.
22. Mixed economy principle has adopted in India by the announcement of 1948 Industrial Policy.
23. The Industrial Policy of 1970 is otherwise known as Industrial Licensing Policy.
24. The 1985 Industrial Policy has brought a change in terms of Liberalisation of Licensing Policy, particularly in terms of making Industries free form the provisions of the MRTP Act. (Monopolies and Restrictive Trade Practices)
25. The first railway line opened in India on 16th April 1853.
26. The total number of railway zones in India is 9.
27. The largest railway system in Asia is the Indian Railways.
28. The biggest shipping company in India is the Shipping Corporation of India.
29. The biggest port in India is Mumbai.
30. Functions:- (a) Bank of note issue: The privilege of note issue is the monopoly of RBI. This right brings about uniformity in the monetary system. The bank issues currency notes of various denominations except one rupee notes. The one rupee notes are issued by the Finance Department of the Govt. of India. (b) Banker to the Govt.: It acts as a banker to the Govt. The Govt. keeps its funds with the central bank. Whenever needed the Govt. borrows from the Reserve Bank. On behalf of the Govt., it arranges for the collection and disbursement of Public loans. (c) Bankers Bank: The RBI acts as a banker’s bank. It is the bank for all banks in the country. No bank can function without license from the RBI. Every commercial bank maintains an account with the RBI. (d) Custodian of Nations Foreign Currency Reserves: The Foreign Currency reserves of our country are kept by the RBI. It is the responsibility of the RBI to maintain stability of foreign exchange rate. (e) Lender of the last resort: It acts as the lender of the last resort to the commercial banks. When the commercial banks are in need of financial assistance, they approach the RBI for help as a last resort. (f) Controller of Credit: The volume of crediting our country depends on the lending policy of the commercial banks. It is the duty of the RBI to control the credit at a reasonable level. (g) Bank of Central Clearance: The RBI acts as clearing house for commercial banks. It is easy for the RBI to perform this function as the member banks keep deposits with the bank. 31. Money Market: It refers to the whole networks of financial institutions dealing in short term funds.