Pest Analysis of India

The Indian economy is diverse and embraces a huge area including agriculture, mining, textile industry, manufacturer and a vast area of other services. There is an enormous shift from what the economy used to be in the distant past.

Indian economy is the third largest in the world, as measured by 'Purchasing Power Parity' (PPP). Till today, two thirds of the population depends on agriculture directly or indirectly. Indian economy is somewhat socialistic in its approach but presently India is running with other capitalist country.

Pre - Colonial History

Pre - colonial implies to the period before the advent of the British. Indus Valley Civilisation is considered to be the first of the permanent settlements in the urban areas.

They usually practiced varieties of traders, which include agriculture, domestication of animals, making sharp weapons from copper, bronze and tin and inter-city trading.

Barter system was commonly use in these times although many kings issued coins and revenues were also paid to the rulers. Spices were exported to the Europe, Middle East and south East Asia in exchange of gold and silver.

The rise of the Maratha Empire after the falls of Mughals marked the decline of political stability affecting Indian economy.

Colonial History

Colonial rule brought along with its change in the economic structure of the country. The whole process of taxation was revised, with effect on the farmers, a single currency system with fixed exchanged rates, standardised weights and measures, free trade was encouraged and a kind of capitalist structure in the economy introduced.

They exported the raw materials and manpower and the finished goods were brought back to India and sold at high rates.

These polices were not favourable to Indian Economy. But other developments in transport and communication like introduction of railways, telegraphs and so on were made which affected the economy.

Towards the end of the colonial rule it was seen that development in the Indian Economy was hampered and it was reduced down from its glorious strong economic background.

Post - independence History

There was a basic stress on few things like industrialisation, large public sector, and business regulation, state intervention in labour and financial markets and central planning during this period.

The economy of the country shifted from agricultural, forestry, fishing and textile manufacturing to heavy industries, telecommunications and transformation industries during late 1970s.

In the 1950s the Indian government had undertaken a chain of plans for the economic development. These plans functioned profitably for a while but then again in the long run they showed lese development.

Economic doldrums were a result of structural inadequacies, wars with China in 1962, with Pakistan in 1965 and 71, currency devaluation in 1966, first world oil crisis and few natural calamities.

Contemporary Economy

Major reforms were being made by Rajiv Gandhi in 1980s by restrictions on capacity expansion for incumbents, removal of price control and reduced co-operate taxes.

The year 1991 marked the economic liberalisation initiated by the Indian Prime Minister PV Narashima Rao and his Finance Minister Man Mohan Singh which was in response to a balance-in- payments crises.

Other changes, like abolition of the License Raj, direct investments in many sectors, affected economy. More private sector initiatives were taken up during 1980s and 1990s. 1990 onward, India is enjoying constant growth in economy.

At present, India has a modern stock exchange instead of an outdated one. There has been a rise in the growth in many sectors.

State planning and the mixed economy: Indian economy works on the basis of 5-year plans, which enables an effective and equal distribution of national resources for a balanced economic development.

Mixed economy is the merger of the socialist and capitalist economy. India's mixed economy has switched roles embracing capitalist economy to greater extent over the past decade.

In India, the public sector covers the railways and postal services. Nationalisation