General Studies: Indian Economy
Economy is framework, within which economic activities are carried out, which could be investment, production and consumption etc.
The economy of India is the 10th largest in the world by nominal GDP and the 3rd largest by Purchasing Power Parity (PPP). On a per capita income basis, India ranked 140th by nominal GDP and 133rd by GDP (PPP) in 2013, according to the IMF. India is the 17th largest exporter and the 10th largest importer in the world.
Definition of Economy
An economy consists of the production, trade of distribution and consumption of limited goods and services by different agents in a given geographical location. The economic agents can be individual, businesses, organisations or governments.
Types of Economy
i ) Traditional Economy:
In this type of economy, there is very little government involvement. Allocation of resources here is based on ritual, habits or customs.
ii ) Free Market Economy:
This type of economy also has very little governmental interference or control. Economic decisions here are made based on market principles.
iii ) Capital Economy:
In this type of economy, the central problems of economy. That is there is no interference by the government and price mechanism operate through demand and supply. In the USA, the role of the government is minimal, it is the best example of Capital Economy.
iv) Socialist Economy:
All important decisions regarding production, exchange and consumption of goods and services are made by the government. The closest example of a centrally planned economy is the Soviet Union for the major part of the 20th century.
v) Mixed Economy:
This type of economy consists of a combination of public sector and private sector units. It basically incorporate governmental involvement in market based economy.
vi ) Welfare Economy:
Welfare Economy analysis the total good or welfare i.e, achieve at a current state as well as how it is distributed. Amastya Sen received the Nobel Prize in economic science for his work in welfare economics.
vii )Green Economy:
It is one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. Green economy is an economy or economic development model based on sustainable development and a knowledge of ecological economics.
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