India's Economy

As one of the largest countries in the world India has a thriving economy. But because of the many people that live in the country, its average income is still very low. In the first decades after becoming independent, India’s government controlled much of the economy, making it very difficult for foreign companies to invest freely. In the last two decades this has changed. India has chosen a more capitalist way to go.

Farming

Over half of India’s people get their income from farming. The most important products are corn, rice, sorghum and wheat. Other products include tea, cotton, sugar cane and jute.

The Green Revolution in the 1960s made it possible for India to provide enough food for its population. New technology in farming, hybrid crops, the use of fertilizers, irrigation programs and more automation improved the quantity and quality of crops that farmers got from their land. India’s farms are small, mainly because they are split up among the children of a family when their father dies.

Cows are sacred animals in India and people respect them. As Hindus are not allowed to eat beef the south Asian country has almost a third of the world’s cattle. Cows can be seen roaming the streets almost everywhere. In many rural areas they are still used to plow the fields.

Industry and mining

India is one of the world’s biggest producers of iron ore and coal. As a result, the iron and steel industry is a basis for producing cars and other vehicles, ships and electrical goods. Although the textile industry is a traditional sector of the economy that the British built up, many clothes are still produced at home.

Handicraft and hand-made jewelry are sources of income for millions of people.

The chemical industry is one of the fastest growing in India. Almost 13% of the country’s GDP comes from this part of the economy. It also caused the worst industrial accident in history. In 1984 a poisonous gas escaped from an American chemical plant in Bhopal, killing 20,000 people. A few years later the American company paid almost 500 million dollars to the victims and their families.

The service sector

In the last decades India has experienced a boom in the service sector. Today about half of the country’s money comes from it. India has a great reputation in the computer sector, producing millions of IT experts, who are welcomed all over the world because of their great skills. Software and computer technology from India have become very popular. Western companies hire these experts because they are cheaper than laborers at home.

In addition, India has become the world capital of call centers. This service is very popular in the west, especially among British and American firms.Other expanding areas of the service sector include telecommunications and banking.

Transportation

India’s state-owned railway system goes back to the British colonial government of the 19th century. The British exploited India’s raw materials and built a big network of railway lines to get them to the coast. Today, millions of people travel by train, one of the cheapest ways of travelling, and the only means of transport that poor people can afford.

Although the Indian government has built many new roads in the past, a large number of Indians are still are without cars. Especially in rural India people often walk long distances and use carts for transport. Rickshaws are widespread in many Indian cities.

Energy

About 70% of India’s energy comes from burning fossil fuels. The country must import oil and gas to meet its energy demands. India also plans to increase the number of nuclear power stations, even though the Fukushima disaster has raised questions of the safety of nuclear energy. As the economy increases at a fast pace it is doubtful whether India’s electricity production can keep up.

Problems

Even though India has made large steps in economic growth, many problems remain unsolved. Growing bureaucracy, unemployment and corruption are only a few. In contrast to the days when many Indians left their country to work in the developed world, more and more are coming back to settle down hoping to achieve a better standard of living in their home country.

India - Table of Contents

Online Exercises

Words

achieve = get
afford = to have enough money to buy something
although = while
automation = the use of computers and machines to do a simple job
average = normal, regular
basis = starting point
beef = meat from a cow
boom = increase in business
bureaucracy = administration
call center = an office where people answer customers questions or sell things by using a telephone instead of meeting people in person
capitalist = when a country’s businesses and companies are controlled by private people
cart = a vehicle with two or four wheels and no roof; it is often pulled by a horse and used for transporting things
cattle = cows
century = a hundred years
corruption = when a person does something illegally and takes money for it
cotton = cloth or thread made from the white hair of the cotton plant
crop = plant, like wheat, rice or corn that is grown by farmers to produce food
decade = a period of ten years
developed world = rich countries
economy = the relationship between production, trade and money in a country
escape = to get away from
especially = above all
expand = grow
experience = undergo
exploit = to use minerals and raw materials for business and industry
fertilizer = a substance that is put into the soil to make plants grow
firm = company
foreign = from another country
fossil fuel = material, like coal, oil or gas that is used to produce energy; it was created by dead animals and plants millions of years ago
GDP = gross domestic product = total value of all the goods and services that a country produces in one year
goods = products
government = the people who rule a country
growth = increase, expansion
handicraft = activity , like making baskets , in which you use your hands to make objects that you can sell
hire = to give someone work for a short time
hybrid crop = new plant that is produced from two different types
improve = to make better
in addition = also
in contrast to = compared with
income = the money that someone gets for the work they do
invest = to spend money in order to make a profit from it
iron ore = rock or earth that has iron in it
irrigation = when water is brought to farming land because it is too dry
IT = information technology = the study of computers and how information gets from one place to another
jewelry = small things that you wear for decoration, like rings or necklaces
jute = thin threads from a plant used to make rope and cloth
laborer = worker
means of transport = the way people and goods travel from one place to another
network = system
plant = factory
plow = to turn over the earth so that farmers can plant seeds
poisonous = containing a substance that can kill or hurt you
provide = give
reputation = the opinion that people have or what they think about something
rickshaw = small vehicle in southeast Asia, pulled by a bicycle or a person; it usually can carry one or two passengers
roam = wander around, without knowing where togo
rural= countryside
sacred = holy, religious
service sector = part of the economy that offers a service instead of producing something ; teachers, hospital workers, policemen etc... belong to the service sector
sorghum = seeds of a crop grown in tropical countries
source = basis
split up = divide
state-owned = belonging to the government
steel = strong metal that can be easily shaped; made out of iron
sugar cane = tall tropical plant with thick stems from which sugar is made
thriving = booming, very successful
unemployment = when people are out of work
unsolved = without a result
vehicle = machine that is used to transport people and goods from one place to another
victim = here: person who was hurt in the accident
wheat = the grain that white bread is made from, or the plant that it grows on
widespread = very popular

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