The foundation of the Indian economy is strong, and at the same time, Prime Minister Narendra Modi believes that the country's economy will reach the household of 5 trillion dollars in the near future. He said that India is the only country in the world to reach an annual growth rate of more than seven percent.

India is currently the sixth largest economy in the world with about 2.5 billion dollars. The Prime Minister, who is on a tour of South Korea, met some businessmen,  More than 600 companies like Hyundai, Samsung and LG Electronics are doing business in India, he said. Some of these new companies have been involved in the investment process. The Prime Minister said the Indian policy was relaxed due to visa and business. He said that in the last four years, the country has made a direct foreign investment of $ 250 billion. He also mentioned the indirect tax reforms that have increased the country's position  place to 77th in world rankings.

Pulwama terror attack: India hikes import duty on Pakistan goods to 200 per cent

New Delhi: Taking strong economic action against Pakistan following the Pulwama terror attack, India on Saturday raised the customs duty to 200 per cent on all goods imported from the neighbouring country, including fresh fruits, cement, petroleum products and mineral ore.

The decision would significantly hit Pakistan’s exports to India, which stood at $488.5 million (around Rs 3,482.3 crore) in 2017-18 as it would drastically increase the prices of its goods here.


“India has withdrawn MFN (most favoured nation) status to Pakistan after the Pulwama incident. Upon withdrawal, basic customs duty on all goods exported from Pakistan to India has been raised to 200 per cent with immediate effect,” finance minister Arun Jaitley said in a tweet.

The two main items imported from Pakistan are fruits and cement, on which the current customs duty is 30-50 per cent and 7.5 per cent, respectively. Slapping an import duty of 200 per cent effectively means almost banning the imports from Pakistan, official sources said.

Meanwhile, a dossier, nailing the culpability of Pakistan in the terror attack in Pulwama, will be given to the Financial Action Task Force (FATF), an international terror financing watchdog, to expose the neighbouring country’s links with terrorism and seeking its blacklisting, officials said.

The FATF blacklist means the country concerned is “non-cooperative” in the global fight against money laundering and terrorist financing.

If the FATF blacklists Pakistan, it may lead to downgrading of the country by multilateral lenders like International Monetary Fund, World Bank, Asian Development Bank, EU and also a reduction in risk rating by Moodys, S&P and Fitch.

The Paris-headquartered FATF will also be told through the dossier how the Pakistani agencies are providing funds to the JeM, the official said.

In the next meeting of the FATF, India will also press for the blacklisting of Pakistan so that that action can be taken against the country, another official said. The FATF plenary and working group meetings will be held in Paris next week.

India on Friday revoked the MFN status to Pakistan in the aftermath of the Pulwama terror attack. The country invoked a security exception clause of the World Trade Organisation (WTO) to withdraw this status. Both the countries are member of this organisation.

India can also restrict trade of certain goods and impose port-related restrictions on Pakistani goods.

India’s New Defense Budget Falls Short The new budget does little to advance the very objectives the country has outlined for itself. On February 1, India’s acting Finance Minister Piyush Goyal (presented the Indian interim budget for 2019-20. Unsurprisingly for an election year, there was a big focus on agriculture and social sectors, and the defense allocation was certainly not the highlight. Specifically, Goyal, in his speech said, “Our Defence Budget will be crossing 3,00,000 crore rupees [INR 3 trillion or about $42 billion] for the first time in 2019-20. For securing our borders and to maintain preparedness of the highest order, if necessary, additional funds would be provided.” Newspaper headlines highlighted the fact that the defense budget had crossed the INR 3 trillion mark. But the key question is if this is sufficient against the backdrop of growing security challenges and the life-cycle driven military modernization that Indian military forces urgently require. In fact, the defense allocation in real terms has gone down if one were to look at the rate of inflation and foreign exchange depreciation over the last year. Commenting on the defense budget, Air Marshal Nirdosh Tyagi, a former Deputy Chief of Air Staff, said, “Last defense budget had increase of just about 7.7 percent over the previous year. Inflation and rupee depreciation more than neutralized this. Thus, no increase in real terms.” Other commentators also echoed this general sentiment that Indian defense budget has stagnated. With major plans for defense modernization on the anvil, the current defense allocation is far too meager to make any meaningful progress. In fact, in the last few years, each Indian defense budget has been criticized as being the lowest budget allocation since the 1962 war with China. Indian defense spending in the pre-1962 phase was about 1.5 percent of GDP annually, going up only as a consequence of the disastrous border war with China in late 1962 and the rebuilding of the Indian military that took place subsequently. It peaked at over 4 percent of GDP in the mid-1980s, according to the World Bank (based on SIPRI data), declining since then. The government has made a total allocation for the defense of INR 4.31 trillion which is slightly over 6.35 percent of the revised estimates for 2018-19. The total Ministry of Defense (MoD)

moneyindianeconomy

the budget includes all allocations to the Ministry of Defense, revenue allocations to the three services, Defense R&D Organization (DRDO) and Ordnance Factories and capital allocations to these entities and also defense pensions. Thus, the actual allocation for the defense forces is only INR 3.01 trillion, of which only a third (INR 1.03 trillion) is allocated for capital expenditure, which goes into modernization of the military. Analysts have provided a further break down of the budget in terms of the modernization funds available to army, navy and air force which shows that the resource crunch will continue to be a major problem for all the services. Most of the 6.3 percent hike in the defense budget actually goes to meet the salary and pension requirements, thus making the allocation for modernization a lot smaller than even the previous year. A quick look at the modernization budget shows that the Air Force has got the largest share at INR 363.7 billion followed by Army and the Navy at about INR 220 billion. Why does the continuing almost-stagnant defense allocation create anxieties? This year’s defense allocation is despite the Parliament Committee Report of 2018 which highlighted the serious deficiencies faced by the Indian military. India’s Vice Chief of Army Staff, Lt. Gen. Sarath Chand had last year made a case for increasing the budget, telling a parliamentary panel that the budget “has dashed our hopes”. He pointed to the possibility of a two-front war and to the continuing threats that India faced, saying India did not have sufficient funds for emergency necessary purchases, and the army did not have sufficient war reserves to fight a high-intensity war for more than ten days. He is not likely to be pleased with this year’s budget either. More recently, the Indian Army has released its Land Warfare doctrine which clearly emphasizes a two-front threat scenario (China-Pakistan) for which the Indian Army has to be prepared against, signifying a shift from the single-threat scenario, which was the predominant thinking until a decade ago. Similarly, last year the Indian Air Force (IAF) conducted the Gagan Shakti exercises reportedly with a two-front war scenario. It is somewhat surprising that a nationalist government that prides itself on a muscular foreign policy devotes so little for defense. While the current budget may be dictated by the impending elections and the need for providing sops to various domestic groups, that does not explain the consistently lower defense budget for several years. This also has an impact on India’s strategic options: India’s much softer approach to China over the last year may very well be dictated by the realization that New Delhi simply does not have the military capacity to do anything else.

Understanding the Indian economy

3 types of world economy are seen 1) Capitalist 2) Socialist 3) Mixed Economy: India adopted a mixed economy since 1948 after independence. The market controls everything in capitalist terms. Due to demand and supply, prices of goods are determined. The product that the consumer is demanding from the product of the basic necessities is produced. The client is benefited by making competition in the economy and giving better value at a lower price. But there is no guarantee that basic things will get to everyone.
 This is different from the socialist economy, in which one of the top organizations of the government is controlling everything that focuses on the price of the government and the basic necessities. But this creates monopoly on the government and lowers the entrepreneur's efforts.
In India, there is a mixed economy, that is, by combining the good qualities of both the above types, the economy has been created. The journey of the Indian economy is being done by the mixed economy and the free economy. Although, in spite of this, the existence of both the economies of production and distribution shows that the capitalism route is being used to speed up the production, whereas distribution is still being done by socialist elements.

                                                              Sector of Economics

By Profession	By Ownership
Primary Sector	Public Sector
Secondary  Sector	Private Sector
Tertiary Sector	Joint Sector
Quaternary Sector
Quinary Sector

Primary sector:
This sector includes businesses related to natural resources. Agriculture, forestry, fisheries, mining and mineral production,

Secondary sector:
This sector mainly produces utility products by processing the resources of the primary sector. Includes factories, construction, power generation, natural gas and water supply.

Tertiary Sector:
 This sector includes various services which complement the primary and secondary sector. Includes business, transport, transport, conservation, administrative, social services.

Quaternary Sector:

This sector includes the use of high intellectual capacity in the sector. For Example  Research and development, information technology, software development etc.

Quinary Sector:

According to some experts, this sector is a part of the Quaternary sector. This includes the highest level of decision making process.

 Public Sector:

Public sector means a sector which has government ownership, control and control. The activities undertaken by the government come into play. For example, Railway, Doordarshan

Private Sector:

Sector which is owned or controlled by a private person or group of people. The objective of private industry is to achieve personal benefits.

Joint Sector:
The industries coming in this sector are of the government as well as the private series.