At the beginning of the 21st century, the agricultural sector employed about half of the active population and, between 2003 and 2004, the growth rate recorded by the sector was approximately 6% per annum. Overall, the agricultural sector recorded good growth rates, although significantly lower than the levels of other productive activities; consequently, the imbalances and income gaps between the cities and the countryside worsened. The strong dependence of crops on the good performance of climatic factors continues to represent a serious obstacle to the adequate remuneration of operators in the sector; moreover, in favorable years, the surplus of agricultural productions helps to keep prices low, while in unfavorable ones the scarcity of productions does not allow to reach sufficient levels of income. State investments in the sector were mainly directed towards the expansion of irrigated areas, the improvement of rural roads, the development of agricultural research and the implementation of soil conservation policies. Irrigation interventions were concentrated in the north-western areas and in the peninsular delta areas; this contributed to generating further imbalances between the various agricultural regions.

From the point of view of the performance of individual productions, the greatest growth concerned in particular wheat and rice. This had the immediate consequence of the strong containment of imports of staple foods. According to some estimates, the increase in cereal production should be sufficient to cover the increase in demand resulting from the demographic increase. In a context of extreme poverty and lack of expendable income, however, it is to be believed that the increased dimensions of demand are satisfied by a further diffusion of self-sufficiency and not by increases in production linked to raising agricultural productivity. As things stand, however, the agricultural resources available are unable to withstand the current demographic pressure.

In addition to the progressive trade liberalization and the elimination of bureaucratic obstacles to exports, the State intervention policies for the improvement of the sector also provide for the introduction of facilitations for access to internal markets; furthermore, the reduction in funding for fertilizers and the decrease in food subsidies should be offset by funding for the take-off and expansion of non-agricultural rural activities.

Between 1995 and 2005 the percentage contribution of the industrial sector to the formation of GDP slightly decreased, while in absolute values ​​the industrial added value increased. In the same period, the share of the active population in the sector remained substantially unchanged and this implies that the increase in productivity prevailed in the country. However, industrial production did not increase, on the contrary, despite the pursuit of a policy in favor of the opening and liberalization of the market, at the end of the last century and in the early years of the 21st.° the complex of secondary activities showed some slowdown. The causes are many and must be sought both in the occurrence of a series of unfavorable international situations that have had a negative impact on the evolution of important economic aggregates (events ranging from the slowdown in foreign investments to the reduction in the size of international trade), and in some important internal causes. For example, negative climatic events caused a certain reduction in agricultural production and, consequently, the decline in activities also extended to the agro-industrial sector. The priorities assigned to the modernization of the services sector also had negative effects on industrial growth, through a policy of incentives for research and development activities and,

Starting from 2002-03, the Indian industry seems to have emerged from this phase of impasse, registering a growth in production of 5 % (in the same years, services have had a greater increase, reaching 7 %). The relaunch of Indian industry, expected by the government formed after the 2004 elections, it will not only be oriented towards encouraging the production of traditional goods and information technology: in fact, for some time now the conditions have existed for a growth in high-tech industries linked to the processes of relocation from the industrial regions of advanced countries; the affirmation of a widespread technological and scientific culture, which has always represented one of the objectives of the Indian training system, together with the low cost of skilled labor, constitutes a very powerful factor in attracting production activities with a high technological content. This is the case, but it is only one example among many, of the aerospace sector and more specifically of avionics. The strategies for the enhancement of industrial production also include measures of consolidated effectiveness such as the creation of special economic zones, the modernization and technological adaptation of obsolete structures, the design and construction of infrastructures, of which the country is still very lacking. In this regard, in theA program was launched in 2002 for the construction of roads and the transformation of normal roads into motorways, which is expected to be completed by the end of 2007. For India 2009, please check

The energy problem remains open: the India is in fact heavily dependent on foreign countries for its needs (the import of fuel represents 30 % of total imports). The attempt to increase the productivity of the sector through forms of privatization has not been able to give significant results especially given the evident political and social need to keep energy prices under public control. In order to encourage the growth of production, some tax exemptions have been introduced for some years.

The most dynamic sector, export-oriented and with the greatest increase in terms of contribution to GDP, is that of services, which produces over 50 % of national income. In addition to the strong growth in the traditional service sector, and the financial, insurance and business, a role he assumed the development of innovative services, mostly for multinational enterprises and for which are interesting forms of outsourcing ( outsourcing ) for the management of the so-called back office . Of absolute interest is the relocation to the India, by some airlines, of call centers for reservations, information and activities related to e-ticketing and more generally e-commerce . It is estimated that about 40 % of investments that are directed from abroad are directed towards these activities.

In the context of services, the greatest growth rates have been in software production. It is estimated that these activities employ over one million people and that, in 2002, they contributed about 2 % to the formation of GDP. Well over three quarters of software production is destined for foreign markets (the India exports these IT products to more than one hundred countries) and, on average, the value of the sector grows at a rate that, in the first five years of the 21st century., has exceeded 50 % per annum.

Foreign trade is an important voice of the Indian economy. Since 2001, following the commitments undertaken with the WTO, the country has eliminated all quantitative restrictions on imports, although other forms of tariff barriers remain (see below: Economic and financial policy). Traditional exports are growing with difficulty, also due to competition from China, and are unable to compensate for the rise in oil prices, so the current account balance continues to show a negative balance. Conversely, the balance of payments is in surplus precisely due to the action exercised both by the export of services and by the inflow of capital for investments and financial participations.

In order to reduce the strong dependence on Western economies and the risks deriving from the instability of the international economic situation, the India is looking for new trading partners in Southeast Asia. Another source of foreign currency is represented by international tourism, whose expansion in some areas of the country is however hindered by the presence of situations of tension due to the persistence of ethnic-religious conflicts or forms of local banditry. To meet the growing demand, in some areas that have recently entered the international tourist circuit, many historic buildings and old residences have been transformed into hotels.

India Foreign trade

India Economic Sectors Between 1995 and 2005
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