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Since independence the Indian government has attempted to pursue a mixed economic policy with features of both a free market and socialist planning. Major industries such as railroads, automobile manufacturing, and banking are government run. At the same time, many consumer-goods industries and agriculture are in private hands. The center of the planned economy has been a series of five-year plans fostering state takeover of the former British colonial economic structure. Under India's first prime minister, Jawaharlal NEHRU, the plans stressed heavy industry, often at the expense of agriculture. Today India ranks among the top ten industrial nations of the world and has an increasingly powerful middle class (now numbering nearly 100,000,000), most of whose members live in the largest cities. Despite significant economic growth since independence, however, many of India's gains have been absorbed by the increasing population.

Manufacturing and Mining

Under British rule, industrial growth in India was inhibited. Since independence, however, the country has achieved near industrial self-sufficiency. Today India produces most of its own chemicals, automobiles, steel, textiles, and even computers and television sets. Steel production has more than doubled since 1960. India is self-sufficient in iron and coal but is heavily dependent on foreign oil.


India's chief energy sources are coal (26%), petroleum (49%), and electricity (25%). Some 156 billion kw of electricity were generated in 1987, which still far short of demand. Only 65% of India's villages are electrified, and electrical outages are a common feature of big-city life. The leading sources of power are thermal and hydroelectric. The government has made a commitment to nuclear energy, which provides a little over 3% of total power production.


The majority of Indians ear their livelihood from the land, and agriculture accounts for about 35% of national income. About half of the land is arable, and two crops are normal where water and climate permit. The chief summer monsoon (kharif) crops are rice and millet. The major winter (rabi) crops are wheat and pulses. India is the world's second largest rice producer and ranks fourth in wheat production. In addition to food crops, commercial crops such as cotton, jute, sugarcane, tea, coffee, oilseeds, and tobacco are grown. India is the world's leading producer of tea and sugar. The country also has the world's largest cattle population, reflecting the revered status of the cow in Hinduism. Although Indian cattle are poor producers, they still make India the largest Asian producer of milk, butter, and hides.

The so-called GREEN REVOLUTION, which introduced new seed varieties and farming techniques (including irrigation and the intensive use of fertilizers and pesticides) to increase yields, has had a major impact on Indian agriculture since 1967. Total food grain production for 1986 was 150 million metric tons (168 million U.S. tons), and India remains self-sufficient in food production despite two recent monsoon failures. Wheat production in Punjab and Haryana is the highest per hectare in the world. The effects of the green revolution in rice production have been less spectacular, partly because Indians still prefer the older rice varieties in their diet.

Theoretically, landlordism has been abolished, and there are ceilings on land holdings in most states. Government attempts at land reform, however, have been largely circumvented by the entrenched and politically powerful landlord class created by the British. The traditional hereditary jajmni system, in which landless laborers exchanged their services for food and other benefits, has eroded. In addition, the major gains of he green revolution have accrued to large landowners with the capital to take advantage of the new seeds and techniques. Poorer farmers are often unable to afford costly fertilizers and lack access to irrigation systems. As village agriculture becomes increasingly mechanized, more small farmers will lose their land to join the millions of landless migrants already flocking to such cities as Calcutta, Bombay, and Delhi each year in a largely unsuccessful search for employment.

Forestry and Fishing

Forestry and fishing account for only about 1.3% and 0.8% of the national income, but are locally important in some states. Forests are not accessible for commercial development, and the government is currently attempting to increase the forested area to 33.3% and improve lumber output. Fishing is locally important in Kerala and in some deltaic areas. Fish production has tripled since 1947 because of mechanization, introduction of deep-sea fishing vessels, and better preservation and marketing techniques.


The volume of railroad passenger and freight traffic has increased greatly since independence. Inland navigable waterways are also important avenues of transportation. Air services now reach most large cities, and government-owned Air India is a regularly scheduled international airline.


The government has fostered international trade and moved away from the export of agricultural commodities and raw materials associated with the colonial economy toward the export of manufactured goods. Major exports include cotton goods, iron, raw jute and jute products, coffee, electrical goods, leather, handicrafts, diamonds, and chemicals. India is now the world's largest importer of rough diamonds and exporter of gem diamonds. In recent years India has also exported engineers and technicians (especially to the Middle East) and thousands of medical doctors and nurses serving in hospitals in the United States and Great Britain. The country's major imports are machinery, petroleum, chemicals, cereals, copper, and zinc. The country's major imports include heavy machinery, petroleum, copper, and zinc. As is characteristic of most recently independent nations, India has not yet achieved a favorable balance of trade.

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