Economy: Its Definition & Types, and System

By Tara Shwan

An economy is a system of organization and institution that either facilitate or play a role in the production and distribution of goods and services in the society.

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The Economy of India

November 27, 2016

The Economy of India:

The economy of India is the seventh-largest economy in the world measured by nominal GDP and the third-largest by purchasing power parity (PPP). The country is classified as a newly industrialized country, one of the G-20 major economies, a member of BRICS.

The long-term growth prospective of the Indian economy is positive due to its young population, corresponding low dependency ratio, healthy savings. And investment rates, and increasing integration into the global economy. The Indian economy has the potential to become the world's 3rd-largest economy by the next decade according to the IMF,

India has the one of fastest growing service sectors in the world with annual growth rate of above 9% since 2001. India has become a major exporter of IT services, BPO services, and software services. The IT industry continues to be the largest private sector employer in India.

Population: the current population of India is 1,347,385,478 (1.34 billion) people. The second largest population after China.

Currency: Indian rupee (INR) (₹) = 100 Paise

Trade organizations: WTO, SAFTA, BRICS, G-20, East Asia Summit, G8+5, SAARC, AIIB, BIMSTEC, RCEP, International Monetary Fund, World Bank, SCO, United Nations

GDP: $2.25 trillion (nominal; 2016), $8.72 trillion (PPP; 2016)
GDP rank: 7th (nominal) / 3rd (PPP)
GDP per capita : $1,718 (nominal; 2016), $6,658 (PPP; 2016)
GDP by sector: Agriculture and Fisheries: 16.1%, Industry: 29.5%
Services: 54.4% (2015)
Population below poverty line
21, 3 % of population below the poverty line of $1.90 (World Bank)
Labour force: 502.1 million (2015)

Labour force by occupation:

Agriculture: 49%
Industry: 20%
Services: 31% (2012 est)
Unemployment: Total=10,8 million

Main industries: Software, petroleum products, chemicals, pharmaceuticals, agriculture, textiles, steel, transportation equipment, machinery, leather, cement, mining, construction.

Ease-of-doing-business: rank130 (2016)


Increase $321.5 billion: merchandise exports
$155,6 billion: services exports
$477,1 billion: Total (2014)
Export goods: software, petrochemicals, agriculture, leather, jewellery, engineering goods, pharmaceuticals, textiles, chemicals, transportation, ores and other commodities.

Main export partners:

European Union 16.3%(2014)
United States 13.4%
United Arab Emirates 10.4%
China 4.2%
Hong Kong 4.2%


Increase $463 billion: merchandise imports
$146.9 billion: services imports
$609.9 billion: Total (2014)

Import goods: crude oil, gold and precious stones, electronics, engineering goods, chemicals, plastics, coal and ores, iron and steel, vegetable oil and other commodities.

Main import partners:

China 12.7% (2014)
European Union 10.5%
Saudi Arabia 7.1%
United Arab Emirates 5.9%
Switzerland 4.6%
Revenues: (US$480 billion), Expenses: (US$570 billion) (2016, IMF)

Main data source: CIA World Fact Book