ECONOMY
"That
economics is untrue which ignores or disregards moral values."
- M.K. Gandhi
The Indian government supports a mixed economy, most of which is in the control of private enterprise. Under a policy announced in 1956, the government undertook a plan to nationalize entire segments of the economy, while leaving other sectors subject to varying degrees of government planning and control. Nearly 250 corporations were owned by the state in the early 1990s. Financial strains created in part by the Persian Gulf War, which raised oil prices and sharply reduced remittances by Indians working in Gulf states, were the impetus to economic reforms initiated in 1991. The reforms extended earlier economic liberalizations, reducing government controls on production, trade, and investment. Results by the mid-1990s included a reduction in the inflation rate and growth in export earnings. Successive five-year plans, in force since 1951, have achieved a steady rate of economic growth, except for periods of severe drought, such as in 1979 and 1987. In 1994 India's annual gross domestic product (GDP) was $291.1 billion. The economy grew in real terms at an annual average of 4.9 percent during the period from 1965 to 1980 and 7.1 percent during the period from 1980 to 1992. The estimated annual budget in 1993 included revenues of about $30.9 billion and expenditures of $48.5 billion.
