INDIA/Economy

Poverty is fairly widespread in India, but a few Indians have great wealth. India has a large economy in terms of its gross national product (GNP), the value of all goods and services produced in a year. But because of its large population, India has one of the lowest per capita (per person) GNP's. This figure is determined by dividing a nation's GNP by its population. India is considered a developing country because of its low per capita GNP.

Agriculture provides about a third of India's national income. India ranks among the leading nations in total farm area. Farms cover more than half of the country. About 80 percent of the farmland is used to grow India's main foods--grains and pulses, the seeds of various pod vegetables, such as beans, chickpeas, and pigeon peas. The major grain crops include rice, wheat, millet, and sorghum. Rice leads all crops in land area. Only China grows more rice than India. India has more cattle and buffalo than any other country. These animals are not butchered for meat, but are important to the economy because the females provide milk.

India grows more than half of the world's mangoes and leads all countries in the production of cashews, millet, peanuts, pulses, sesame seeds, and tea. The nation ranks second in the production of cauliflower's, jute, onions, rice, sorghum, and sugar cane, and is a major producer of apples, bananas, coconuts, coffee, cotton, eggplants, oranges, potatoes, rapeseeds, rubber, tobacco, and wheat. India is also the world's largest grower of betel nuts, which are palm nuts chewed as a stimulant by many people in tropical Asia. It is also a leading producer of such spices as cardamom, ginger, pepper, and turmeric.

In the past, India had to import much food. But improved farming techniques and the use of irrigation and high-yield grains have greatly increased agricultural production. The government sponsors programs to teach farmers scientific farming methods. It also provides credit to allow farmers to buy improved varieties of seeds and fertilizers. The government encourages increased food production by paying farmers higher prices for their crops. Despite a rapidly growing population, India now produces enough food to meet most of its needs. But such disasters as droughts and floods still sometimes cause food shortages in some areas.

Nearly 60 percent of India's workers earn a living by farming. The farmers and their families use most of their crops. Half of all Indian farms are less than 2 1/2 acres (1 hectare) in area. Only 4 percent cover more than 25 acres (10 hectares). About two-thirds of the farmers in India own their own land. Most of their farms become smaller and smaller with each generation because of inheritance customs. When a man dies, his farm is usually divided equally among his sons. In many cases, the share of each son may be too small to provide a living. Some Indian states have laws that set a minimum size for a farm below which the land cannot be divided.

India has the world's largest cattle population. But because cattle are sacred to Hindus, the animals are rarely used for meat, except by Muslims and Christians. Farmers keep cattle and water buffaloes for plowing and for milk. Most commercial milk production comes from water buffaloes. Hides from cattle and water buffaloes are used for leather after the animals have died. Sheep are raised mostly for wool and sheepskin. The production of chickens and eggs is increasing.

Service Industries are those economic activities that produce services, not goods. Service industries are less important in India than they are in other large countries because its population is mostly rural and its economy is agriculturally oriented. Service industries are most important in large urban areas.

India's leading service industries are (1) community, government, and personal services and (2) trade. Community, government, and personal services include such activities as education, health care, public administration, and national defense. This group of services employs nearly a fifth of India's people. Bombay is India's major center for retail trade and for the wholesale trade of cotton. Calcutta is a world leader in the wholesale trade of jute. International trade is discussed later in this section.

Other service industries include finance, insurance, and real estate, and business services; and transportation, communication, and utilities. Transportation and communication are discussed later in this section.

Manufacturing has expanded rapidly in India since the nation became independent. Total industrial production today is six times as great as in 1950. Petroleum refining and the manufacture of machinery and transportation equipment have grown especially fast.

The privately owned Tata steel mills at Jamshedpur were constructed in the early 1900's. Since 1950, the government has built, with foreign aid, major iron and steel mills at Bhilai, Bokaro, Durgapur, and Raurkela. Indian factories use the iron and steel to make automobiles, bicycles, diesel engines, appliances, military equipment, pumps, railway cars, sewing machines, tractors, and many kinds of industrial machinery. Factories in Bombay and Delhi assemble electronic products.

Indian plants refine petroleum and produce many industrial chemicals, dyes, medicines, fertilizers, and pesticides. Other plants make cement, food products, paper, sugar, and wood products. India imports rough diamonds, cuts them, and exports the finished gems.

The clothing and textile industries employ more workers than any other industries. Cotton mills are concentrated in Bombay and Ahmadabad. Punjab has woolen mills, and Calcutta has jute factories. Millions of Indians work at home, weaving fine fabrics of cotton, rayon, and silk by hand. They make beautifully designed carpets and rugs, and spin fine laces of gold and silver threads. People throughout the world buy embroideries and shawls made by these home weavers. Other articles sometimes produced at home include brassware, jewelry, leather goods, and woodcarvings.

Forestry and Fishing. Forests cover about 10 percent of India. Large quantities of deodar cedar, rosewood, sal, and teak are cut for timber. In addition, villagers chop down many trees for fuel. India's forest land shrinks each year because people cut more trees than they plant. The government encourages planting, mostly of fast-growing eucalyptus or pine trees.

India is a major fishing nation. Croakers, mackerel, sardines, sharks, and shrimp are caught in the surrounding seas. People also catch Bombay duck, a small fish that is dried and used as a relish with curried food. Rivers yield carp and catfish.

Mining. India's great deposits of valuable ores include a variety of raw materials suitable for industrial development. India produces about 7 percent of the world's iron ore. The iron ore deposits lie along the Bihar-Orissa state borders, near several of the country's major iron and steel works. India also has a good supply of coal. Petroleum accounts for about 50 percent of the yearly value of all the minerals mined in India, and coal accounts for about 40 percent. Most of the country's coal comes from the states of Bihar and West Bengal. Petroleum is produced from wells in the Indian Ocean off the coast from Bombay and from inland deposits in Assam. Indian mines supply much of the world's mica, a mineral necessary for the manufacture of electrical devices. The country exports much manganese ore to the United States for use in steelmaking.

Other mineral resources include large deposits of bauxite, beryllium, chromite, gypsum, limestone, magnesite, natural gas, salt, and titanium. There are smaller deposits of copper, lead, sulfur, and zinc. India also has deposits of two radioactive metals, thorium and uranium; as well as diamonds, emeralds, gold, and silver. The Kolar gold mines in Karnataka, among the world's deepest, go down more than 2 miles (3.2 kilometers).

Energy Supply. India imports large amounts of petroleum because it uses more than it produces. Plants that burn petroleum or coal generate about three-fourths of India's electricity. Most of the rest comes from hydroelectric plants. Nuclear plants provide a small amount of the country's electricity.