Indian Economy: A Business Perspective
ISBN: 9789370604001
576 pages
Publication Year: 2025
For more information write to us at: acadmktg@wiley.com
Description
The Indian economy is an extraordinary blend of contrasts and convergences. It is a place where high tech
information technology services coexist with informal labor markets, where digital start-ups rise
amid rural agrarian challenges, and where policy reforms must reconcile growth with equity and scale
with sustainability. Capturing this complexity—and making sense of it—is both the challenge and the
purpose of this book. What sets this book apart is its unwavering commitment to data-driven insights. We move beyond theoretical constructs to present the latest statistical evidence, trends, and projections that truly reflect the ground realities of the Indian economy. Through a rich array of graphs, tables, and empirical analyses, you will gain a nuanced appreciation for the scale and complexity of economic phenomena— from macroeconomic indicators to sectoral performance. In short, this is a book that sits at the crossroads of academic rigor, professional relevance, and public discourse.
1 Introduction to Indian Economy
1.1 Evolution of Indian Economy
1.1.1 Pre-Independence Era
1.1.2 Post-Independence Milestones Green Revolution
1.2 Risk and Uncertainty in the Indian Economy: The 2025 Perspective
1.2.1 Global Uncertainties
1.2.2 Domestic Uncertainties
1.3 Relevance of the Business Environment
1.4 Economic Policies
1.5 Business Cycle
Annexure 1A
2 Economic Systems
2.1 Introduction
2.2 Capitalism or Free Market Economy
2.3 Centrally Planned Economy
2.3.1 Socialism
2.3.2 Communism
2.4 Mixed Economy
2.5 Transitioning from a Centrally Planned System to a Market-Based System:
2.6 Social Democracy
3 National Income
3.1 Introduction
3.1.1 Importance of Measuring National Income Accounting
3.1.2 Measures of National Income Accounting
3.2 Gross Domestic Product
3.2.1 Value-Added Method
3.2.2 Expenditure Method
3.2.3 Income Method
3.3 Current versus Constant Prices
3.3.1 Calculation of Real GDP from Nominal GDP
3.4 Factor Cost versus Market Prices
3.5 Gross National Product
3.6 Gross National Income
3.7 GNI per Capita
3.8 GNP versus GDP
3.9 NNP
3.10 Criticism of Gross Domestic Product
3.11 Suggestions for Improving the Measurement of National Income
3.12 Issues with GDP in India
3.12.1 Role of Agriculture and Allied Activities
3.12.2 Issues with Trade Deficit
3.13 India’s GDP versus China and Brazil
Annexure 3A
4 Micro, Small, and Medium Enterprises (MSMEs) in India
4.1 Introduction
4.2 Definition of MSMEs
4.3 Performance of MSMEs in India
4.4 Characteristics of MSMEs
4.5 Importance of MSMEs
4.5.1 Promoting Entrepreneurship
4.5.2 Generating Employment
4.5.3 Supporting the Growth of Large Industries
4.5.4 Promoting Inclusive Growth
4.5.5 Providing Alternative Employment/Supplemental Income
4.5.6 Driving Export Growth
4.6 Challenges Faced by MSMEs
4.6.1 Lack of Sufficient Credit
4.6.2 Infrastructure Bottlenecks
4.6.3 Shortage of Skilled Manpower
4.6.4 Lack of Market Access
4.6.5 Delayed Payments
4.7 Central Government Schemes for MSMEs
4.7.1 Credit/Financial Assistance Schemes
4.7.2 Skill Development and Training Schemes
4.7.3 Infrastructure Development Schemes
5 India’s Manufacturing and Service Industries
5.1 Introduction
5.2 Importance of Industries
5.3 Structure of the Industrial Sector
5.3.1 Primary Industry
5.3.2 Secondary Industry/Manufacturing
5.3.3 Tertiary Industry
5.4 Manufacturing in India: Growth, Employment, and Structure
5.5 Growth of Industrial Sector
5.6 Manufacturing versus Services
5.7 “Make in India” Initiative
Annexure 5A
6 Fiscal Policy
6.1 Introduction
6.2 Objectives of Fiscal Policy
6.2.1 Price Stability
6.2.2 Reduction of Income Inequality
6.2.3 Full Employment
6.2.4 Sustainable Economic Growth
6.3 Types of Fiscal Policy
6.3.1 Expansionary Fiscal Policy
6.3.2 Contractionary Fiscal Policy
6.4 Consequences of Pursuing an Expansionary Fiscal Policy
6.4.1 Financing the Fiscal Deficit Through Borrowings
6.4.2 Higher Interest Rates Offset Aggregate Demand
6.4.3 Loss in the Value of Currency
6.5 Recent Changes in India’s Fiscal Policy
6.6 Fiscal Policy versus Monetary Policy
6.7 Instruments of Fiscal Policy
6.7.1 Taxation
6.7.2 Expenditure
6.7.3 Transfer Payments
6.8 Sources of Revenue
6.8.1 Tax Revenue
6.8.2 Non-Tax Revenue
6.9 Fiscal Responsibility and Budget Management Act, 2003
Annexure 6A
7 Public Revenue
7.1 Introduction
7.1.1 Principal Categories of Public Revenue
7.2 Revenue Receipts
7.2.1 Tax Revenue
7.2.2 Importance of Taxation
7.2.3 Qualities of a Good Tax System
7.2.4 Tax Elasticity
7.2.5 Tax Buoyancy
7.2.6 Tax-to-GDP Ratio
7.2.7 Trends in Central Government’s Tax Revenue
7.2.8 Direct and Indirect Taxes
7.2.9 Non-Tax Revenue
7.2.10 Tax Reforms in India and Impending Issues
7.2.11 Issues with Taxation in India
7.3 Capital Receipts
Annexure 7A
8 Public Expenditure
8.1 Introduction
8.2 Objectives of Public Spending
8.2.1 Provision of Public Goods
8.2.2 Supporting Specific Sectors
8.2.3 Redistribution of Income
8.2.4 Employment Generation
8.3 Categories of Expenditures
8.3.1 Revenue versus Capital Expenditure
8.3.2 Developmental Expenditure versus Non-Development Expenditure
8.3.3 Plan versus Non-Plan Expenditure
8.3.4 Fiscal Deficit versus Primary Deficit
8.4 Trends in Major Components of Public Expenditure in India
8.4.1 Defense Expenditure
8.4.2 Interest Payments
8.5 Major Social Welfare Schemes
8.5.1 MGNREGA
8.5.2 Pradhan Mantri Awas Yojana (Gramin)
8.5.3 Pradhan Mantri Gram Sadak Yojana (PMGSY)
8.6 Highlights of Recent Union Budgets
8.7 Pension Schemes in India
8.7.1 Old Pension Scheme
8.7.2 New Pension Scheme
8.7.3 Unified Pension Scheme
Annexure 8A
9 Monetary Policy
9.1 Introduction
9.2 Objectives of Monetary Policy
9.2.1 Maintaining Price Stability
9.2.2 Promoting Economic Growth
9.2.3 Regulating Money Supply
9.2.4 Stabilizing Exchange Rates
9.2.5 Stability of Financial Markets
9.2.6 Stability of Interest Rates
9.3 Types of Monetary Policy
9.3.1 Expansionary Monetary Policy
9.3.2 Contractionary Monetary Policy
9.4 Measures of Money Supply
9.4.1 Reserve Money/Monetary Base (M0)
9.4.2 Narrow Money (M1)
9.4.3 M2
9.4.4 Broad Money (M3)
9.4.5 M4
9.5 Instruments of Monetary Policy
9.5.1 Quantitative Methods
9.5.2 Qualitative Measures
9.6 Money Creation Process
9.6.1 Numerical Example
9.6.2 Realistic Balance Sheet
9.6.3 Leverage Ratio
9.6.4 Capital Adequacy Ratio
Annexure 9A
Annexure 9B
10 Inflation
10.1 Introduction
10.2 Impact of Inflation on Business
10.3 Expected versus Unexpected Inflation
10.4 Causes of Inflation
10.4.1 Cost-Push Inflation
10.4.2 Demand-Pull Inflation
10.5 Types of Inflation
10.5.1 On the Basis of Coverage
10.5.2 On the Basis of Degree of Control
10.5.3 On the Basis of Rate of Inflation
10.5.4 On the Basis of Expectation/Predictability
10.5.5 On the Basis of Causes
10.6 Measures of Inflation/Types of Price Indices
10.6.1 Consumer Price Index
10.6.2 Wholesale Price Index
10.7 Wholesale Price Index versus Consumer Price Index
10.8 Divergence Between WPI and CPI
10.8.1 Weightage Pattern
10.8.2 Composition Differences
10.9 Headline versus Core Inflation
10.10 Other Measures of Inflation
10.11 Measures to Control Inflation
10.11.1 Monetary Policy
10.11.2 Fiscal Policy
10.12 Inflation in India and Around the World
Annexure 10A
11 Financial Markets
11.1 Introduction
11.2 Role of Financial Markets
11.3 Composition of Financial Markets
11.3.1 Money Market
11.3.2 Capital Market
11.4 Stock Exchanges in India
11.4.1 Bombay Stock Exchange
11.4.2 National Stock Exchange
11.5 Securities Exchange Board of India (SEBI)
11.5.1 Objectives of SEBI
11.5.2 Functions of SEBI
11.6 Equity Market
11.6.1 Significance of Equity Market
11.6.2 Issues with India’s Equity Market
11.7 Debt/Bond Market
11.7.1 Issues with India’s Bond Market
11.8 Banking
11.8.1 Functions of Banks
11.8.2 Issues in the Banking Sector
11.8.3 First Crisis Post-Reforms
11.8.4 Growth of NPAs
11.9 Insurance Sector
11.9.1 General Insurance
11.9.2 Life Insurance
11.10 Future Reforms in the Financial Sector
11.10.1 Better Management of Non-Performing Assets
11.10.2 Improving Financial Inclusion
Annexure 11A
12 Human Development and Labor Market
12.1 Introduction
12.2 Importance of Human Resources in India
12.3 Characteristics of the Indian Labor Market
12.3.1 Large Workforce
12.3.2 Dominance of Medium-Skilled Labor Force
12.3.3 Unorganized/Informal Employment
12.3.4 Low Productivity
12.3.5 Gender Differentials
12.4 Indicators of the Labor Market
12.4.1 Labor Force Participation Rate (LFPR)
12.4.2 Employment-to-Population Ratio/Worker Population Ratio
12.4.3 Unemployment Rate
12.5 Types of Unemployment
12.6 Underemployment in India
12.7 Human Development in India
12.7.1 Human Development Index
12.7.2 Gender Development Index
12.7.3 Gender Inequality Index
12.7.4 Human Capital Index
Annexure 12A
13 Infrastructure in India
13.1 Introduction
13.2 Categories of Infrastructure
13.3 Infrastructure and Growth
13.4 Infrastructure in India: Historical Perspectives
13.5 Energy Infrastructure
13.5.1 Significance
13.5.2 Challenges in the Power Sector
13.5.3 Trends in Capacity and Power Generation
13.5.4 Government Initiatives for Renewable Energy
13.6 Transportation Infrastructure
13.6.1 Roadways
13.6.2 Railways
13.6.3 Aviation Sector in India
13.6.4 Port and Waterway Infrastructure
13.6.5 Telecommunication Sector in India
Annexure 13A
14 Indian Agriculture
14.1 Introduction
14.2 Role of Agriculture in the Indian Economy
14.2.1 Contributor to GDP
14.2.2 Sustains Rural Life
14.2.3 Source of Employment
14.2.4 Supports Industrialization
14.2.5 Increases Foreign Exchange Earnings
14.2.6 Macroeconomic Stability
14.3 Challenges in Agriculture
14.4 India’s Agricultural Land
14.5 Pattern of Land Use and Cropping Intensity
14.6 Pattern of Landholdings
14.7 Recent Trends in Ownership of Landholdings
14.8 State-Wise Production of Select Crops
14.9 Top Crop-Producing States in India
14.9.1 Food Grains
14.9.2 Oilseeds
14.9.3 Sugarcane
14.10 Area Cropped, Production, and Yield of Some Major Crops in India
14.11 Yield of Selected Crops
14.12 International Trade in Agricultural Goods
14.13 Need for Government Support in Agriculture
14.14 Government Initiatives for Welfare of Farmers
14.14.1 Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
14.14.2 Pradhan Mantri Kisan Maandhan Yojna (PMKMY)
14.14.3 Pradhan Mantri Fasal Bima Yojana (PMFBY)
14.14.4 Paramparagat Krishi Vikas Yojana (PKVY)
14.14.5 Agriculture Infrastructure Fund (AIF)
14.14.6 Public Food Distribution System
14.15 Agricultural Productivity in India
14.15.1 Factors Affecting Agricultural Productivity
14.16 Major Agricultural Revolutions in India
Annexure 14A
15 Balance of Payments
15.1 Introduction
15.2 Components of Balance of Payments
15.2.1 Current Account
15.2.2 Capital Account
15.2.3 Errors and Omissions
15.2.4 Official Reserves
15.3 Current Account and Capital Account Balance
15.4 Developments in India’s Balance of Payments
Annexure 15A
16 Foreign Capital
16.1 Introduction
16.2 Foreign Capital
16.3 Need for Foreign Capital
16.4 Foreign Direct Investment
16.5 Motives for FDI
16.6 Horizontal FDI versus Vertical FDI
16.7 Components of FDI
16.8 Sectoral and Country-Wise Distribution of Equity Inflows
16.9 Advantages of FDI
16.10 Foreign Direct Investment versus Foreign Portfolio Investment
16.11 Multinational Corporations
16.11.1 Meaning
16.11.2 Types of Multinationals
16.11.3 Characteristics of MNCs
16.11.4 Challenges Faced by MNCs
16.12 Multinational Entry and Exit
16.13 Management Styles Around the World
16.13.1 Collective Decision-Making or the Ringi System
16.13.2 Lifetime Employment
16.13.3 Kaizen
16.13.4 Notable Management Styles in Other Countries
16.13.5 Leading Indian and Foreign Multinationals
17 International Trade
17.1 Introduction
17.2 Importance of International Trade
17.3 Direction and Composition of India’s Foreign Trade
17.3.1 Composition of Exports
17.3.2 Direction of India’s Exports
17.3.3 Composition of Imports
17.3.4 Direction of Imports
17.4 Trade Policy Instruments
17.4.1 Tariff Barriers
17.4.2 Non-Tariff Barriers
17.5 Issues in Foreign Trade
17.5.1 Currency Fluctuations
17.5.2 Protectionist Measures
17.5.3 Regulatory Issues
17.5.4 Infrastructure Bottlenecks
17.5.5 Persistent Trade Deficit
17.5.6 Non-Tariff Barriers Faced by Indian Exporters
17.5.7 Low-Quality Imports
17.6 Highlights of Recent Trade Policies
17.6.1 Foreign Trade Policy 2015–2020
17.6.2 Foreign Trade Policy 2023–2028
17.7 India’s Trade Balance with Major Trading Partners
Annexure 17A
18 International Institutions and India
18.1 Introduction
18.2 International Monetary Fund
18.2.1 Objectives of the IMF
18.2.2 India and the IMF
18.3 World Bank
18.3.1 Objectives of World Bank
18.3.2 India and the World Bank
Key Aspects of the Partnership
18.4 World Trade Organization
18.4.1 Functions of the WTO
18.4.2 Structure of the WTO
18.4.3 Key WTO Agreements
18.4.4 India and the WTO
Annexure 18A
19 Sustainable Development
19.1 Introduction
19.2 Sustainability in India
19.2.1 Measures Taken to Reduce Carbon Emissions
19.2.2 Sustainable Development Goals
19.2.3 Sustainable Development Report
19.3 United Nations Sustainable Development Goals
19.3.1 GOAL 1: No Poverty
19.3.2 GOAL 2: Zero Hunger
19.3.3 GOAL 3: Good Health and Well-Being
19.3.4 GOAL 4: Quality Education
19.3.5 GOAL 5: Gender Equality
19.3.6 GOAL 6: Clean Water and Sanitation
19.3.7 GOAL 7: Affordable and Clean Energy
19.3.8 GOAL 8: Decent Work and Economic Growth
19.3.9 GOAL 9: Industry, Innovation, and Infrastructure
19.3.10 GOAL 10: Reduced Inequalities
19.3.11 GOAL 11: Sustainable Cities and Communities
19.3.12 GOAL 12: Responsible Consumption and Production
19.3.13 GOAL 13: Climate Action
19.3.14 GOAL 14: Life Below Water
19.3.15 GOAL 15: Life on Land
19.3.16 GOAL 16: Peace, Justice, and Strong Institutions
19.3.17 GOAL 17: Partnerships (for the Goals)
19.4 ESG Framework
19.4.1 ESG Reporting in India
19.5 Alternative Sustainability Indices: Dow Jones Sustainability Index
19.6 Sustainability Practices of an Indian Company
19.6.1 Dr. Reddy’s Laboratories
19.7 Need for Environmental Protection
19.8 Importance of Mandatory CSR
Annexure 19A
Appendix
Index